Bloomberg: Venezuela hires Siemens to rebuild power grid

The repairs might boost power generation by around 1,000 megawatts for Caracas, helping it overcome regular blackouts and years of rationing.

Courtesy | The German company received licenses from the United States Treasury to work with PDVSA

Venezuela hired the world energy giant Siemens Energy AG to repair power plants as part of a government plan to rebuild the national electricity system, according to the Bloomberg agency on Tuesday.

Siemens signed contracts with the National Executive to work on the gas and diesel generation facilities that serve Caracas, as well as those that supply electricity to the infrastructure used by the oil industry, said the company’s commercial manager in the country, Eric Soto.

The German company received licenses from the US Treasury to work with state-owned Petroleos de Venezuela SA, which owns the plants, through third parties and with power company Corpoelec, Soto said.

The repairs might boost power generation by around 1,000 megawatts for Caracas, helping it overcome regular blackouts and years of rationing, as well as improve power supply in oil-producing areas hit by blackouts.

The President of the Republic, Nicolás Maduro, seeks to rebuild the country’s generation system with a plan to invest around $1.5 billion to recover some 9,000 megawatts of production by 2025, according to a Corpoelec document seen by Bloomberg.

The network, which depends largely on the Simón Bolívar Hydroelectric Power Plant in Guri, Bolívar state, which produces up to 80% of the energy, is in deplorable condition.

Although Guri and other hydroelectric and thermoelectric plants have the capacity to produce some 32,000 megawatts of electricity, the system is having trouble meeting current demand of some 10,500 megawatts, according to Nelson Hernández, an energy consultant in Caracas.

One of the US licenses, granted in June, allows Siemens to work with Corpoelec on thermoelectric plants in Miranda state, but prevents it from increasing capacity, Soto said. A second license, which expires in October, authorizes Siemens to sell and repair components at power plants owned by PDVSA. It carries similar limitations.

The German company has had a presence in Venezuela for 60 years and approximately half of the country’s thermoelectric plants use technology owned by Siemens, while the other half use General Electric technology. Siemens also produces many of the components in electrical substations, which need repairs.

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