3 December 2018

Rwanda: Company Loses Contract to Build Five Power Substations Over Bankruptcy

Rwanda Energy Group Limited (REG) has terminated the contract it had signed with Isolux Ingeniera SA, after the company apparently filed for bankruptcy.

In a public notice published in The New Times on Monday, REG informed the general public that it had ended the contractual relationship with the company and urged whoever with any claim with the embattled firm to settle as soon as possible.

"The management of Rwanda Energy Group wishes to inform the public that Isolux Ingeniera SA that was contracted by REG to construct the substations of Birembo, Shango, Rubavu, Kibiye and Bwishyura is bankrupt and the contractual relationship between the parties has ceased," reads the notice in part.

Subsequently, the utility company called for creditors to the company to urgently reach out the representative of Isolux Ingenieria in Kigali within a month to settle the claims "within from the date of this communiqué to agree on how the debt will be settled."

Isolux Corsán is a subsidiary of Isolux Corsán, which is incorporated in Spain.

Financial woes

Available information online indicate that in July last year, the Board of Directors of Isolux Corsán - the parent company of the firm - agreed to apply for bankruptcy proceedings for the seven companies of the group.

The seven affected companies under the group are: Isolux Corsán Group, Corsán-Corviam Construcción, Isolux Ingeniería, GIC Concesiones, Isolux Corsán Servicios, Isolux Corsán Inmobiliaria and Isolux Energy Investments.

These companies have a workforce of 1,992, of which 1,108 are based in Spain, including 160 expatriates, and 888 to other countries.

The companies, according to the online sources, had accumulated a debt with suppliers of 405 million.

Ambitious target

The country has committed to achieve 100 per cent access to electricity by 2024 and it is currently working on upgrade of existing substations as well as constructing new hydropower stations.

The current electricity distribution stands at 46.4 percent according to figures from REG.

We are working on the detailed story.

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