The World Bank has sounded the alarm in the energy sector, the organization has described the losses in the energy sector as a threat to the economy.
The World Bank said in its report that if energy reforms are not done, electricity will have to become more expensive, and the poor will have to be protected from the rising electricity rates.
While the ongoing report by the institution stated that the electricity debt has reached 2.4 percent of the GDP, the revolving debt of the power sector has reached 2635 billion rupees by January 2024.
Expressing concern, the organization has described the losses in the energy sector as a threat to the economy.
While the report states that the circular debt in the gas sector has reached 2866 billion rupees, the debt of the gas sector has reached 2.7 percent of the economy.
The Spanish firm with Saudi capital Fotowatio Renewable Ventures has filed an arbitration claim before the International Center for Settlement of Investment Disputes (ICSID), the arbitration body dependent on the World Bank based in Washington, according to the website of the mentioned organization. It is one more chapter in the confrontation of the Government of Andrés Manuel López Obrador with energy companies, particularly in the renewable energy sector.
The Fotowatio group presents its claim through three companies: Fotowatio Renewable Ventures SLU, FRV Solar Holdings III, SLU and FRV Solar Holdings VI, SLU The first is the head of the group, while the other two are holding companies. The companies allege that the bilateral agreement for reciprocal investment protection signed between Spain and Mexico in 2006 has been violated in relation to an investment by the group in a renewable energy generation company.
The arbitration demand was presented this Wednesday and in it the companies are represented by the Paris and Washington offices of the Freshfields Bruckhaus Deringer law firm as well as by the lawyers of the Mexican firm Galicia Abogados. For its part, the representation of Mexico corresponds to the General Directorate of Legal Consulting for International Trade of the Ministry of Economy.
The information available does not reveal the amount claimed or the specific reason for the arbitration demand. The Energy Regulatory Commission (CRE) of Mexico has denied permits for the generation of solar energy to several companies in the group, such as FRV Duna Solar and FRV San Isidro, but in addition, the group is in litigation over the San Luis de Potosí, a 342 MW project in the San Luis de Potosí region.
Paralyzed project
The project came into operation in May 2019, but might not dispatch energy since December 14, 2021, due to network restrictions established by the National Energy Control Center (Cenace), a situation that remained as of the date of formulation of the group’s accounts for 2022, the latest available.
In these accounts, Fotowatio Renewable Ventures indicated that the operation of the plant had been stopped and that the decision to reconnect it depended on Cenace. The group’s subsidiary filed a claim with the CRE challenging Cenace’s instructions to suspend operations and resorted to external legal advice on the dispute, which indicated that the subsidiary has all the permits and authorizations necessary to manage and exploit the San Juan solar park. Luis de Potosí.
To “neutralize the unfair measure” adopted by Cenace, FRV management took legal action, but despite some favorable rulings from the courts, the organization continued to deny daily operating licenses. The company’s lawyers hoped to obtain a favorable ruling in the protection once morest Cenace to reconnect the San Luis de Potosí solar plant to the National Transmission Grid.
On May 8, 2023, Fotowatio Renewable Ventures SLU, FRV Solar Holdings VI, SLU and FRV Solar Holdings III, SLU submitted a notice of intent to the Government of Mexico under the Agreement for the Promotion and Reciprocal Protection of Investments between Mexico and Spain. The purpose, according to the company, was “to seek communications and negotiations with the Mexican Government before, if FRV deems it necessary, referring the dispute to international arbitration.” The filing of the arbitration claim indicates that the negotiations did not fail.
The company FRV Solar Holdings VI reported impairments amounting to approximately 70 million dollars for its Mexican subsidiaries, as recorded in its 2022 annual accounts filed with the Commercial Registry.
In August 2022, FRV signed an agreement with the Mexican company Zuma Energía to sell the Potrero solar plant, a 342 MW project in the Aguascalientes region (Mexico). Said agreement was subject to suspensive conditions that were met in December 2022.
At the end of 2022, the FRV Group had consolidated assets of 2,117 million euros and accounting net worth of 639 million, according to its annual report. In the growth phase, its turnover was 174 million euros and it suffered losses of 54 million. Through a Dutch firm, it is owned by the Saudi group
The Mexican Government has been in confrontation for years with companies in the renewable energy sector over regulatory changes and restrictions on the operation of plants. In 2019, several multinationals launched litigation once morest the Executive following it changed the rules of the Clean Energy Certificates (CEL), an instrument designed to boost private investment in the sector.
López Obrador announced last month a new reform to the Electrical Industry Law that aims to give more powers to the CFE following the Supreme Court ruling that invalidated his first reform by declaring it unconstitutional.
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As part of a major humanitarian initiative, the First Lady of Gabon, Zita Oligui Nguema, is staying from February 25 to March 4, 2024 in the province of Ngounié (south), notably in Lebamba on the “lands of her fathers”, to supervise a series of actions in favor of local populations.
This campaign, indicates the First Lady’s communication, aims to provide urgent medical and social assistance to those in need. It will take place in two distinct phases, the first taking place from February 25 to 26 and the second from February 28 to March 4. In addition to Lebamba, other towns, including Mbigou, Malinga and Makongonio, will also benefit from these humanitarian actions.
At the heart of this initiative is a comprehensive medical component, including consultations in general medicine, diabetology, ophthalmology, infectious diseases, pediatrics, surgery, cardiology, and many others. This will allow populations to have access to quality health care, which is often inaccessible in these remote regions.
In addition to medical services, the campaign also includes an important social component. Distributions of clothing, free meals and toiletries will be organized to meet the essential needs of local communities.
Note that the First Lady benefits from the support of certain members of the government, in particular Ministers Flavien Nziengui Nzondou, Adrien Mougougou and Carmelia Ntoutoume Leclercq, nationals of the cities to visit. Without forgetting the support of certain international organizations such as the ADB, the FAO, UNESCO and the World Bank
Source : CPD
2024-02-27 16:44:29
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2023-12-09 22:33:43
Nearly 600 million people on the African continent do not yet have access to electricity, and to remedy this, the President of the World Bank, Ajay Banga, announced Wednesday, December 6 in Tanzania to allocate an envelope of five billion dollars. Objective: for 100 million more people to have access to electricity by 2030. By extending electricity networks, he wants to reduce poverty.
Published on: 09/12/2023 – 23:33
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Through the International Development Association (IDA), dedicated to the poorest countries, the world Bank wants to invest five billion dollars, notably in the form of donations or loans at very favorable rates, for the development of electrification. It also hopes to raise 10 billion in additional financing via public-private partnerships.
The RwandaSão-Tomé-et-Principe, la Somalia and the Tanzania – considered to be the countries leading the way in the field – are the first four countries which will benefit from this envelope. Six projects have already been approved for a sum of approximately one billion dollars.
This financing is particularly dedicated to infrastructure: the construction or renovation of electrical lines, or the development of renewable energy sources, particularly in areas located outside the central networks. The rest of the sum, almost three billion dollars, must still be raised during the next IDA fundraising, to ultimately support 20 countries.
However, this financing system is not sustainable, warns the President of the World Bank. He assures that more funds are needed, but also to reform the system to go faster and be more efficient.
The president of the World Bank wants to expand electricity networks in Africa to reduce poverty, by promoting the development of trade and agriculture, but also improve food security and health systems.
Also listen In Africa, the innovation of start-ups in the service of electrification
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