General Manager of AES-Telasi, Ignacio Iribarren, is challenged with the tasks of distributing electricity and collecting for the service.

Carmen Iribarren was widowed in her early thirties and moved to the Maryland suburbs of Washington from her native Caracas, Venezuela with her eight children. Nearly four decades later one of her sons, Ignacio, has perhaps an even tougher assignment than raising a huge family as a single parent.

Mr. Iribarren, 42, General Manager of AES Georgia, is trying to deliver electricity to a million and half people in this nation’s capital city of Tbilisi, an environment characterized by people not much used to paying for utilities and where a high level of poverty and embedded corruption makes wholesale theft and fraud an every day accepted way of life.

Given the corporate culture of AES, one of the globe’s most successful energy companies, Mr. Iribarren is charged with both making a profit and acting in a socially responsible way.

Operating from world-wide headquarters in Arlington, VA, in late 1999, AES bought Telasi, the then state-owned electricity distribution operation. The Georgia business is part of the firm’s “Silk Road Division” which includes operations in parts of the former Soviet Union, including Central Asia, Ukraine and the Caucasus.

Since 1999 the company has sunk $250 million into improving the infrastructure and faces the enormous problem of getting customers to pay for electricity they have consumed. Fighting this straightforward goal is the notion, from socialist times, that utilities come for free, the related problem of a people with a per capital annual income of under $1000 (compared to more than $30,000 in the United States) and the ultimately fatal flaw of a society governed by people who are involved in stealing from the citizens, or at least looking in the other direction when corruption is obviously present.

But Iribarren is cautiously optimistic, “Our biggest problem here is that we are working in a place that has no culture of paying for utilities. Also people of all backgrounds are experts at stealing electricity—including the likes of climbing poles and diverting the flow or simply rigging their meters at home. When we took over this company it was one of the worst electric utility companies in the world, a classic Soviet electrical distribution company with an excessive infrastructure, overbuilt, not well-maintained and widespread with corruption. We are trying to change all this.”

When AES arrived cash collection levels were 10 percent of the electricity being consumed. But through Herculean efforts at getting the city re-metered, getting bills to most consumers and re-engineering much of the infrastructure, AES has brought the billing and collection rates up to 70 percent and beyond. Yet the company has been unable to make profit, still striving to break even.

But the stepped up installation of secure meters and the strenuous collection efforts have made a difference. AES looks to be in Georgia to stay and may even figure out a way to make a profit in this still decaying economic culture.

On the other hand, AES has a policy of cutting off electricity in neighborhoods where the revenues do not meet the projected and expected payments. Residents of Tbilisi sometimes have electricity shut off even when they have paid their electric bill, since AES shuts off a whole area when payments are down in those neighborhoods. This kind of wholesale manipulation of the system has resulted in aggravation against the company.

Asked about this, Iribarren says “These bill-paying citizens are right. I feel terrible, awful really, about those who pay but have service cut off, but we’ve got to get these bills paid. In some neighborhoods the communities are stepping up, going neighbor-to-neighbor and encouraging payment of utility bills. So our efforts are working and we believe the whole city is better off.”

Once AES has gotten new, secure electricity meters in place they will be able to enforce collections on a individual customer basis instead of having to shut down whole neighborhoods where the “percentage of payment” is low.

Iribarren, and his wife and two children, have at least another year in Tbilisi. They are part of the huge population of expatriate private and public sector executives and workers trying to help the Georgians through a very difficult transition. The AES work here is crucial, for as, as one Georgian government official told the Washington Times, electric service is the foundation for the rest of the society.

Iribarren is clearly dedicated to his assignment and recognizes its importance: “This is the most satisfying work I’ve ever done and it is also the hardest. At AES, we are convinced that the future of this country is dependent on what we are doing. If you don’t have a functional electricity sector why would anyone consider moving here or opening a factory here. It is a fundamental for the rest of growth and development in a society.”