Daily Management Review

Argentine government takes temporary control over Enel's local subsidiary


The energy company Edesur, which is owned by the Italian Enel, will now temporarily be under the authority of the Argentine government.

According to reports, the government's decision was motivated by frequent and severe disruptions in Buenos Aires, the nation's capital, and the area around it. Additionally, according to the country's economy minister, Sergio Massa, the decision was affected by rumors that the Italian owner plans to sell the business.

The minister stated, "We can no longer stand by as circumstances that thousands of Argentines have experienced repeatedly over the past 15 days." Illustrations of stores tossing out spoiled food and homes without water or electricity have dominated the last two weeks. He stated that while the government will check to see if Edesur has complied with its responsibilities under its contract with the state, it does not plan to interfere with the company's operations.

The government will keep an eye on the business for 180 days. Jorge Ferraresi, the current mayor of the Buenos Aires suburb of Avellaneda and a past minister of territorial development of Argentina, will now serve as Edesur's external auditor. He will be providing the authorities with an update on the company's operations and duty fulfillment every ten days.

The summertime heat and drought, which have persisted since late 2022, are to blame for the power disruptions in Argentina. The Ministry of Economy penalized Edesur 1 billion pesos ($5.2 million) for power outages back in February.

source: reuters.com