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May 21, 2004

S.S.B. sells stake in BECOL for $7 million

The original purchase, in 1992, triggered accusations of scandal that have never been fully put to rest…but today with the sale of its five percent stake in BECOL, the Belize Social Security Board has closed the book on one of its most controversial investments, while managing to turn a profit at the same time. The announcement of the sale was made simultaneously by Fortis and the S.S.B. Fortis already owned ninety-five percent of BECOL, which it had bought from Duke Energy in 1991 for sixty-two million U.S. dollars. The purchase of the last five percent, for seven million Belize dollars, completes the deal and makes Fortis the sole owner of the company, which produces electricity on the Macal River from the Mollejon Hydro Plant. A dam and power plant is presently under construction at Chalillo which should more than double the river’s total output to one hundred and seventy gigawatt hours per year. A third facility, similar to Mollejon, is planned for the area of Vaca Falls. In its release today the Social Security Board emphasized its gain of two point three-two million dollars on the sale, a return of forty-nine point six percent. When spread over the twelve years the shares were held, however, the return averages only four point one percent, significantly less than the original four point six-eight million dollar expenditure would have earned as a bank deposit. BECOL paid no dividends at any time since the company’s formation. When asked what Social Security would do with its sudden infusion of cash, both from the BECOL deal and much larger sale of B.T.L. shares, a spokesman said that some has been placed on deposit at the commercial banks at around eight point five percent annual interest with the majority held at Central Bank at an eight percent return. S.S.B. still retains its twenty-five percent ownership of Belize Electricity Ltd. with majority control held by Fortis.

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