Economy
October 20

Venezuela initials USD 800 million IADB loan to fund hydroelectric plant
The Venezuelan government and the Inter-American Development Bank (IADB) signed on October 20 a USD 800 million loan to finance part of the Manuel Piar hydroelectric power plant, said Alí Rodríguez, the Minister of Economy and Finance.

The instrument, approved by the IADB Board of Directors on July 29, 2009, was initialed at the headquarters of the Ministry of Finance by IADB representatives and officials from the National Electricity Corporation (Corpoelec).

Rodríguez thanked the IADB for the financing. He recalled that this project is part of other loans previously granted for the same project involving a total contribution "above USD 1.75 billion," Efe reported.

"It is the largest loan that the IADB is currently granting to any country," the official stressed.

The Manuel Piar hydroelectric power plant is the last hydroelectric development project in the Lower Caroní River Basin.

October 21

Venezuelan steelmaker halts production to save energy
José Jiménez, the interim director of labor matters, Venezuelan steelmaker Siderúrgica del Orinoco Alfredo Maneiro (Sidor), said that the managers of the steel mill have shut down seven furnaces five hours a day in order to save energy.

The "contingency" measure only affects the areas of slabs and billets, from 6 pm to 11 pm each workday. According to Jiménez, the goal is to reduce the use of the system. Therefore, four furnaces in the melting areas and three furnaces of the metallurgic area will be shut down.

Shutting down operations for five hours a day in seven areas of the steel plant could indirectly hit production activities of the steel mill. However, the source did not elaborate on the scope of the measures that will affect the last shift of the steel maker during their implementation.

The duration of the measure remains unknown. Reduced operation hours in the steel machinery could result in cutting power consumption by 300 megawatts a day, compared to the 1,000 megawatts that are consumed in normal working hours.

The president of Venezuela's National Electric Corporation, Hipólito Izquierdo, said that "since 2004 the demand has been growing at an annual rate of 4.5 percent. This year, growth will be 7.1 percent nationwide; it is one of the highest demands," Izquierdo said.

Chávez announces plan to cut energy use
Venezuelan President Hugo Chávez said late on October 21 at a meeting of his Cabinet that the government will create the Ministry of Electrical Energy. He also announced the implementation of a set of emergency measures aimed at reducing the growing electric power demand in the country.

The Head of State approved in Miraflores a decree with "stringent regulations" designed to curb high electricity consumption in Venezuela. The provision will require government offices to reduce their consumption by 20 percent.

The president highlighted that the official regulations include a ban on imports of electrical appliances and equipments with high power consumption and the establishment of a Strategic Committee that will be headed by Executive Vice President Ramón Carrizález. The committee will be composed of workers of the electricity industry.

The plan of "energy rationalization and saving," Chávez said, "instructs the state's industrial park, state-run core industries, state-owned Petróleos de Venezuela (Pdvsa) and its subsidiaries, to present in 15 working days a program to highly reduce their consumption of energy, by prioritizing and ranking the activities they carry out."

Meanwhile, the president of Corpoelec, General Hipólito Izquierdo, said: "the company is not considering changing the rates. Social and residential rates will remain unchanged because they represent 80 percent of consumers," he stressed.

October 23

Lack of maintenance causes the collapse of powerhouses
Announcements made by President Hugo Chávez in order to deal with electricity problems have sparked divergent views about the implementation of exceptional measures and the expected effect of optimizing the service.

Leaders of Venezuela's National Federation of Electrical Workers (Fetraelec) expressed, at least "for now" their support to government decisions, which have been characterized for making a public recognition to worker proposals.

Ángel Navas, the president of Fetraelec, is satisfied because the Head of State addressed in his speech on October 21 "the main topics" of the document that his union prepared and handed to the Vice Presidency and the Office of the President on September 25th. In the text, the federation expressed their concern over the deterioration of the sector and demanded a greater participation of workers in the decision making process.

However, Navas said that (electric plants) have been affected by thermal failure problems, the weakness of transmission lines and especially by "the lack of maintenance of existing plants."

Meanwhile, Víctor Poleo, an analyst and professor of the Graduate School of Oil Economics at the Central University of Venezuela, thinks that these measures "are useless." "Neither the Ministry of Energy and Petroleum nor the National Electric Corporation (Corpoelec) can solve a crisis that has been caused by them. The political class that is currently ruling the country must be removed."

"Media tricks and gimmicks are less and less useful to hide the energy crisis," Poleo added.

Chávez appoints lawmaker Ángel Rodríguez as Minister of Electric Energy
President Hugo Chávez announced early on October 23 that he appointed legislator Ángel Rodríguez as Minister of Electric Energy.

Chávez said in a telephone interview with state-run TV network Venezolana de Televisión (VTV) that Rodríguez is a social activist, and is also the president of the Committee on Energy and Mines, National Assembly.

Rodríguez will also be the president of the National Electric Corporation (Corpoelec), replacing former president Hipólito Izquierdo. Chávez would not elaborate on Izquierdo's new role in his government.

"Ángel is a worker; he comes from the working class. He worked many years in (state-run oil company Petróleos de Venezuela) Pdvsa.

The Venezuelan ruler added that he decided to appoint Rodríguez as the new minister because "the problem (of the electricity sector) is not only technical, but political."