Tuesday, December 7, 2021

Santos’ coalition cracks over planned privatization of Colombia energy giant Isagen

Colombia Reports

(Image credit: Wesley Tomaselli)

Colombia’s Liberal Party has threatened to leave the coalition supporting President Juan Manuel Santos in congress over a surprise announcement to proceed with selling the state’s majority share in Isagen, one of the country’s largest energy producers.

With Congress in recess, the country’s Finance Minister on Monday announced that Canada’s Brookfield Asset Management and Chile’s Colbun will bid for the controlling stake in Colombian power generator Isagen at an auction on January 13.

Brookfield and Colbun to bid for Colombia’s Isagen on January 13

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The sale is controversial because opponents fear both an increase in energy prices if the company is privatized and possible lay-offs of Isagen personnel. Additionally, opponents have claimed that the bidding price was set too low compared to the assumed value of the company.

The Santos administration, already dealing with a considerable budget deficit, has claimed that selling Isagen is crucial not just to close the fiscal gap, but also to generate funds for investment in infrastructure.

Sale of Colombia energy giant Isagen suspended


Liberal Party

The leftist opposition has consistently opposed Isagen’s privatization and on Tuesday were joined by the coalition Liberal Party that said the government’s surprise move during recess undermines the party’s confidence in the government.

“The coalition cannot be maintained when they are undermining one of its main principles, and … the confidence of the party and its congressmen,” said Senator Sofia Gaviria.

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“A government pulling tricks to set up the sale of Isagen does not seem to create a climate of confidence in the coalition,” said Gaviria.

The senator was supported by her bench leader, Senator Horacio Serpa, who said that Isagen is “a solvent, productive company that manages a strategic resource of the country that should not end up in private hands.”

Serpa said that the government’s move to announce the bidding while Congress is on recess and the judicial branch is only restarting after their holiday break was “suspicious.”

The Liberal Party is the largest coalition party in the Senate and the second largest in the House of Representatives.

The party’s abandonment of the coalition would cause a major crisis as the president would no longer have control over the majority in both houses.

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Colombia Reports