ICE Says Its Finances Are in Great Shape

IN 2003, the Costa Rican Electricity and Telecom Institute (ICE) reported ¢3.35 billion ($78.7 million) in revenues – 18.2% more than in 2002.

The increase in revenues was attributed to three main reasons – sales from second-generation GSM cellular telephones, an increased demand for electrical services and better control over expenses, according to ICE.

At the end of last year and the start of this year, ICE issued $100 million in bonds that will be used to finance future electricity generation and telecom infrastructure development projects.

The first bonds, totaling $40 million, were issued on Dec. 10, 2003 and quickly sold out after being released on the international market. The bonds were negotiated at 7.10% interest over 10 years.

The second set of bonds, totaling $60 million, were issued Feb. 3 of this year and also sold out shortly after their release. The bonds were negotiated at 6.45% interest – a lower rate than the latest series of foreign-debt bonds issued by the Costa Rican government – over 10 years.

The bonds sparked controversy because in May 2003, the Central Bank had refused to allow ICE to issue them, fearing they would negatively compete with government bonds and could lead to an increase in interest rates. In response, ICE workers’ unions went on a threeweek strike.

Eventually, the government agreed to allow the bond issue (TT, Dec. 24, 2003).