Rurelec is a plc listed on the London Stock Exchange, a private power and its business is all focussed on Bolivia and Argentina, but hoping to expand into Chile and Peru. Rurelec is a good example of a parasite on public finance and aid, using political leverage of the UK, the IFIs, and former right-wing local politicians.
Its main shareholder is IPC Group (with 16.1%), which is also the main shareholder (11%) of IPSA plc, a similar company to Rurelec but focussed on South Africa. IPC Group itself is now privately owned by Peter Earl, who is CEO of all 3 companies, and states that as a British company: "it has accordingly received support from the United Kingdom's DTI for expansion into new territories." IPC was originally founded in 1995 by Earl, together with Lord Moynihan, who was an energy minister in the government of Mrs Thatcher.
http://www.indpow.co.uk/partners.htm
Rurelec itself "was established to develop, own and operate power generation capacity in Latin America and to supervise rural electrification projects."
The first part of their business - owning and operating power stations - included ownership of the largest power generator in Bolivia, the 238MW gas CCGT plant Guaracachi, which was nationalised by Evo Morales' government in May 2010. Rurelec was disappointed: it had hoped to negotiate "a new form of public- private partnership" for the plants in Bolivia. An extra 96MW capacity was added to Guaracachi in 2009, but all of this was financed by loans from Bolivians (or other south Americans) themselves: "its 96 MW combined cycle expansion project in Bolivia was successfully financed from project loans and bond issues placed exclusively with local and regional banks and bondholders." Rurelec also plans to get Argentinians to invest their money in the same way: "Rurelec now intends to adopt the same regional funding strategy in Argentina"
http://www.rurelec.com/images/stories/30.06.2009_Rurelec_Interim_Web.pdf
'Fair value' compensation is guaranteed by the nationalisation decree itself, which invites the company to propose its view of fair value; but Rurelec prefers to emphasise that it is prepared to threaten commercial arbitration under a 1988 bilateral investment treaty between the UK and Bolivia.
http://www.rurelec.com/news-and-publications
The second part of the business - 'supervising rural electrification projects' - is dependent on profiting from public investment by IFIs and donors: "Management of rural electrification projects which connect outlying communities to a local electricity distribution system; projects which have been publicly funded by the World Bank, donor countries or multi-lateral development agencies."
http://www.rurelec.com/investors
The board of directors shows the importance of political connections. The CEO, Peter Earl, has a track record of playing a big role in inciting privatisations - through the World bank in Latam, and then through UNECE - and then profiting from them for himself.
"Peter Earl - Chief Executive. Peter began his career at the Boston Consulting Group Inc. advising state-owned companies. In 1994 he acted on secondment to the World Bank and UNDP in Bolivia. He has advised governments on privatisations in Latin America and Eastern Europe having served as Deputy Chairman for the United Nations Economic Commission for Europe infrastructure finance group. He became a director of Fieldstone Private Capital Group in London in 1994, where he advised on cross-border power sector acquisitions and bids totalling approximately US $6 billion, involving 5,000 MW of installed generating capacity. In 1995 he founded IPC and is also a director of IPSA and a non-executive director of Strategic Natural Resources PLC."
To increase the political weight, they also have on the board Sir Robin Christopher KBE CMG - "Sir Robin was a VSO volunteer in Bolivia in 1963/4 and British Ambassador to Argentina from 2000 to 2004. He is also a Hon. Fellow of the Institute for the Study of the Americas (ISA) at London University."; and also a Bolivian ex-junior-minister of energy, Marcelo Blanco: "Mr Blanco has extensive financial advisory experience and has also held appointments in the Bolivian Embassy in Argentina and as a consultant to the World Bank and the United Nations Development Programme. Over the last ten years, Mr Blanco has focused on the energy sector, including a two year appointment as Vice Minister of Electricity and Alternative Energies at the Bolivian Ministry of Public Works, before being re-appointed as Finance Director at Empresa Guaracachi, S.A. in 2004."
http://www.rurelec.com/rurelec/board
The 'sister' company IPSA focuses on the South African power market. It owns power stations in South Africa, but was hit by the recession when demand fell, because it did not have a guaranteed power purchase agreement with the public utility Eskom.
http://www.ipsagroup.co.uk/images/stories/Annual_Reports_pdf/IPSA_Annual_Report_2009_-_final_no_cover.pdf