Venezuelan state buys power firm

The nationalization drive is popular with many Venezuelans

The Venezuelan government has bought the country's leading privately-owned power provider, marking a new phase in its nationalisation programme.

The state is to pay $740m (£378m) for the 82% stake in Electricidad de Caracas owned by US company AES Corp.

In private hands since 1885, the firm provides power to the capital, Caracas.

Key resources such as power and oil are being brought under state control to fulfil President Hugo Chavez's vision of a "socialist economy".

Public ownership

The country's leading telecommunications firm is also being nationalised.

The Chavez government argues that public ownership of key industries will enable Venezuela to channel its natural resources better for the benefit of its people and tackle poverty more effectively.

However, the nationalisation drive has worried foreign investors and affected the country's stock market.

Despite taking control of Electricidad, ministers said that minority investors would be permitted to keep their shares if they wanted.

"We are preserving the integrity of the minority shareholders," said Rafael Ramirez, president of state-owned oil firm Petroleos.

In a ceremony in Caracas, AES president and chief executive Paul Hanrahan said the process had been conducted in a "fair" manner, in line with Venezuelan law.

"We strongly believe in Venezuela and in EDC as a company," he said.