5 June 2002 – Peru’s privatization board said on Tuesday it will be looking for at least $250m for the two electricity transmission companies it is selling to the private sector.

“The base price for the companies is $229.6m, and the auction winner will be required to pay another $20.4m for… inventoried and repair materials so the total minimum offer will be $250m,” Pro-Investment said in a statement.

Colombia’s state-run Interconexion Electrica SA (ISA), Spain’s Red Electrica and Canada’s Hydro Quebec are in the running for Etecen and Etesur, whose networks link electricity transmission from northern to southern Peru.

Etecen distributes electricity from the Mantaro hydroelectric project in the central Andes to northern Peru, while Etesur, in Peru’s second city Arequipa, distributes energy to the southern part of the country.

The sales are a key part of President Alejandro Toledo’s plan to raise up to $800m this year by selling off and giving concessions for state assets.

Officials say the unpopular privatization plan – which has triggered protests from Peruvians fearing rate hikes or layoffs – will be key in helping the government meet a fiscal deficit goal of 1.9-2.2 per cent of gross domestic product.

More than half of Peru’s 26 million population lives on $1.25 or less a day, while unemployment and underemployment top 50 percent.

However, the plan has stumbled as key sales have been postponed and several bidders have backed out.

Peru, Latin America’s No. 7 economy, has raised $9 billion through state sales since the start of the last decade.