WASHINGTON -- Enron Corp. has asked a federal agency to pay a huge insurance claim on an idled power plant in India, a project financed in part by a still-outstanding government-backed loan.
The relationship between Enron and the little-known Overseas Private Investment Corp. demonstrates the company's two-prong government-relations strategy.
In the United States, the energy giant has sought to free power companies from regulation. But internationally, Enron has embraced government help in the form of loans and insurance protection.
OPIC is still owed $453 million in payments for Enron-related projects. Another U.S. agency, the Export-Import Bank, is due $512 million. The two agencies made $1.2 billion in loans on Enron-related projects overseas.
"They're definitely among our top 10 borrowers," OPIC spokesman Larry Spinelli said.
Although Enron has filed for bankruptcy protection, four of its projects financed by OPIC are making payments on time. Enron and two other U.S. corporations are trying to get OPIC to pay off a $200 million insurance policy on a fifth project, the financially troubled India power plant.
OPIC provided $160 million to Enron and two other corporations to help build the $2.9 billion Dabhol, India, plant, which isn't producing any power because prospective customers don't want it.
In December, the same month it filed for bankruptcy, Enron and the other two companies filed a claim on their "political risk insurance" policy asking OPIC to pay $200 million.
The companies say the Indian government has broken promises to stand behind the project, in effect denying the U.S. corporations their asset and therefore requiring OPIC to pay the insurance policy.
The claims process will take months to resolve.
Ex-Im Bank says it is still owed $203 million on the India project, but that it can call on guarantees from five Indian financial institutions for repayment if necessary.
The four Enron-related power plants that are operating now are in the Philippines, Turkey, Venezuela and Guatemala. The payback comes from revenue from power sales. Ex-Im Bank's Enron-related projects are in Colombia and at the same plants that OPIC is helping in Turkey and Venezuela.
Enron's bankruptcy stopped two OPIC applications in their tracks: a pair of power projects in Brazil that would have received $390 million in OPIC loans. Those applications have been abandoned.
OPIC "gave hundreds of millions of dollars in loans and other support to Enron-related projects during the Clinton administration," said Sen. Charles Grassley of Iowa, the ranking Republican on the Senate Finance Committee.
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