The Tribune

By LEANDRA ROLLE

Tribune Staff Reporter

lrolle@tribunemedia.net

BAHAMAS Power & Light Chairman Dr Donovan Moxey said yesterday that officials are working feverishly to close the power provider’s rate reduction bond by early next year.

“With respect to the bond offering, we’re still working very, very hard to get that deal closed,” he told reporters on the sidelines of an event at the Office of the Prime Minister yesterday.

“As you know, minister spoke about the fact that we have a target date of closing the bond by the end of January of next year and so we’re working hard and all for the teams are really focused on that date and so I’m very optimistic we will be able to get that done by the end of January of next year.”

BPL’s bond offering is a part of the utility provider’s efforts to obtain the required financing to help refinance the company’s debts and also fund major infrastructure upgrades to transform BPL and the energy sector.

Yesterday, Dr Moxey said finances secured via BPL’s bond offering will help replace outdated components at its substations, which was attributed as one of the causes for recent power outages in the capital.

“We have generation, we have transmission and distribution. As we said a while back, with the building of station A, the additional 132 megawatts, we have no issues with generation in New Providence,” he said.

“The challenges that many of us would’ve seen with (recent) outages is really in our transmission and distribution system and in particular we’ve had a lot of incidences at the substation level and obviously, we’re addressing these issues as best as we possibly can.”

He added: “But, one of the things that we did indicate is the number of the components within these substations need to be updated sorely and that bond funding is really what’s needed in order to make those investments.

“And unless we have the investment ball to really make significant infrastructure investments is very tough to maintain a certain level of efficiency if you will as well with these systems over time so these investments really need to be made.”

Last month, Dr Moxey told Tribune Business that Citibank and CIBC First Caribbean will likely act as “joint book runners” and placement agents in finding investors to purchase the bonds, adding that the latter’s expertise in private placements will likely be more suited to the issue’s needs.

Bond repayments will be financed by BPL’s residential and business consumers via a new line item, which was initially equivalent to 15 percent of their current consumption, which will be added to their bills.

The final charge, though, will depend on the interest rate BPL is able to obtain from bond investors. The utility has said electricity cost savings that will result from the upgrades financed by the bonds will offset the extra charge and result in Bahamians paying the same price – or slightly less – for their energy.

Yesterday, Dr Moxey was also asked to give an update on BPL’s agreement with Shell for New Providence’s new power plant, which expired last month.

However, he said: “Yes, the Shell agreement did expire for us on November third but we’re still in communication with Shell. We’re still in discussions with Shell and we are still focused on doing the best possible deal for the Bahamian people.

“One of the things that we want everybody to know and understand is when we talk about a 20 to 25 PPA (power purchase agreement), you want to make sure given that long-term commitment that you’re doing everything in the best interest of the Bahamian people and so that means, if we take a little bit longer to do what we need to then that’s our focus because at the end of the day, getting the Bahamian people the best possible deal long-term is extremely important for us and that’s what we’re doing.”