By Philip Thornton, Economics Correspondent
11 September 2006
Anti-poverty campaigners have accused the Government of using taxpayers' money to support overseas electricity privatisation projects that result in higher power prices for some the world's poorest people.
In a report published today, War on Want says that Globeleq, a wholly owned subsidiary of the Department for International Development's private sector promotion arm, CDC, has paid hundreds of millions of pounds to US power firms that wanted to withdraw from the developing world. Two companies, AES and El Paso, are said to have gained more than $1bn (£536m). Globaleq paid AES $448m for two plants in Bangladesh and a further $337m for a power station in South Africa and stake in a Tanzanian plant. El Paso received $250m for holdings in central America and South Asia.
Since Globeleq took over the national grid in Uganda last year, domestic electricity prices had risen by 70 per cent, War on Want said.
DfID and Globaleq rejected the findings of the report, which they described as poorly researched, although Globeleq acknowledged that electricity prices had risen.
DfID said Globeleq had played a major part in keeping the lights on in poor countries when the rest of the energy market has failed. A spokesman added that while DFID owned CDC, it had agreed as a matter of policy not to interfere in CDC's or Globeleq's decisions about investments or development.
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