Santo Domingan pension fund profits to go into DR’s energy sector

The Superintendence of Pensions is considering using part of the pension funds for infrastructure for the energy sector, such as taking on debt for funding the construction of electricity generation plants.

Superintendent of Pensions Joaquin Geronimo, speaking before a meeting organized by the Confederations of Small and Medium-sized Construction Companies (Copymecon), said that for the last three years there have been investments in energy through the San Pedro de Macoris Electricity Company (CESPM).

Superintendent of Pensions Joaquin Geronimo, speaking before a meeting organized by the Confederations of Small and Medium-sized Construction Companies (Copymecon), said that for the last three years there have been investments in energy through the San Pedro de Macoris Electricity Company (CESPM).

He told reporters that the requisites for the investments include a guarantee for repaying the investment, a controlled risk and good profitability. He added that the funds have invested nearly RD$26 billion in state certificates.

His statements follow revelations earlier in the week, that part of the accumulated funds would be used to fund the construction of electricity plants through a system of trusts. In response, Geronimo said that the mechanism used, if the state takes charge of the construction, would be through the emission of debt, or they could also form a trust, which would be another step, he said. “If an electricity company does an emission on the market, and the funds invest in this emission, they are then in the electric sector. What they would not do directly is finance an investment.

Financial analyst Alejandro Fernandez Whipple told Diario Libre that financing electricity plants by using pension funds would only lead to more public debt emissions, the difference being that they would have a specific target.

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