MercoPress. South Atlantic News Agency

UK company reaches compensation agreement with Bolivian government

President Morales expropriated Rurelec's 50.01% stake in Guaracachi, Bolivia's largest power generation company in 2010

Bolivia has agreed to pay 31.7 million dollars to British electric utility Rurelec as compensation for the 2010 nationalization of its controlling stake in power producer Empresa Electrica Guaracachi, 10 million less than the amount determined by an arbitration tribunal, the Attorney General's Office said.

 Attorney General Hector Arce said at a press conference that the agreement was reached three days earlier at the conclusion of negotiations that followed a Jan. 31 arbitration award handed down by the Permanent Court of Arbitration in The Hague, which set the compensation at 41.8 million.

However London-based Rurelec, following negotiations in Madrid agreed to waive more than 10.2 million of that total, including 5.7 million in declared but unpaid dividends.

Bolivia's president, Evo Morales, expropriated Rurelec's 50.01% stake in Guaracachi, Bolivia's largest power generation company, on May 1, 2010.

Guaracachi, whose installed electricity capacity in Bolivia rose from 369 MW in 2009 to 454 MW in 2014, accounts for 33% of the country's power generating capacity.

Since 2006 Bolivia has managed several compensation agreements with foreign investors from seized companies in areas such as hydrocarbons and communications, but still has other pending demands.

The Investments Bill signed by President Morales in April established that any future controversies with foreign investors must be discusses and resolved before Bolivian courts.