By YOURI KEMP
Tribune Business Reporter
ykemp@tribunemedia.net
A Cabinet minister yesterday said no decision has been taken on whether Bahamas Power & Light’s $535m rate reduction bond (RRB) and Shell North America’s LNG plant will proceed.
Alfred Sears QC, minister for works and utilities, said ahead of the weekly Cabinet meeting that he had met with BPL’s board last week for a formal briefing on Shell negotiations. However, he added that the former Minnis Cabinet was presented with a proposal on the same matter that was not granted approval.
Mr Sears said: “The difficulty is that this matter was presented to Cabinet, I understand, right before the general election, and the urgency of the matter had been put to Cabinet I am informed by the Board and Dr Donovan Moxey (BPL’s chairman) that the Cabinet did not grant approval.
“We have come in on September 16, and I’ve been briefed and am bringing myself up to date.” Mr Sears said issues involving “a quarter of a billion dollars” are not easy decisions for the Government to make, with the Shell North America LNG plant set to cost between $270m to $300m - although that will be funded by all-private sector money.
The newly-elected Davis administration is seeking to pivot from reliance on fossil fuels towards the increasing integration of renewable energy into The Bahamas’ generation mix, and Mr Sears said he will consult with the Ministry of Finance on how to proceed with the Shell negotiations if that is the path chosen.
Asked directly if the Shell North America power purchase agreement will now be scrapped, Mr Sears responded: “It would be premature to make a conclusion at this point. But I have spoken with Dr Moxey yesterday and, in fact, I’ve asked for the certain documents so that we can be appraised as to the rationale and feasibility, and also in the context of the commitment and the social contract that now exists between the government and the electorate.”
Confirming that the Shell deal hinged on the previous administration’s $535m BPL bond issue being placed, Mr Sears stated: “That’s exactly what I’m talking about.”
Under the former Minnis administration, the Rate Reduction Bond Act and accompanying legislation needed to be changed by Parliament to make the issuance more attractive to investors and so that the $535m placement could proceed. This never happened before the general election.
Comments
benniesun 3 years ago
From Oxford 1913 Dilemma: def #2. A state of things in which evils or obstacles present themselves on every side, and it is difficult to determine what course to pursue; a vexatious alternative or predicament; a difficult choice or position.
Repost
THE GOVERNMENT OF THE BAHAMAS INTENDED NATIONALLY DETERMINED CONTRIBUTION (INDC) UNDER THE UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE (UNFCCC) Communicated to the UNFCCC November, 2015
From page 11 ...
The Bahamas has set a target of 30 percent emissions reductions, below 2010 levels by 2030. Efforts so far have been unsupported by the international community.
Note the emissions reduction is 30% below our 2010 level (not 2021 level). Any potential power station buyer wants increasing power loads ie increasing emissions to maximize profits. Me thinks it is a dilemma that will bleed us.
Eleven years have gone by since 2010. Over those 11 years the Bahamas' electrical generation has increased and the number of land vehicles and sea vessels have also increased. To satisfy the stated 2030 goal (given our present energy position) means that we must reduce our electrical generation, quantities of our cars and trucks, and our numbers of boats to the 2010 level - then reduce them further by 30%. If I am wrong then please correct and enlighten me to the correct interpretation.
End of Repost
So called "green and sustainable" options are costly and not sustainable; nor are they carbon neutral as being claimed. Time for Mr. Sears to scratch away any hair he has left on his noggin. Or he can engage with out of the box thinkers who are quick learners and who promptly recognize, evaluate, accept and put forth solutions to challenges.
Maximilianotto 3 years ago
What’s a Rate Reduction Bond? Biggest nonsense. It is a hefty price increase for consumers without any restructuring of BPL. Congratulations to the minister he doesn’t believe this nonsense. Restructure or sell BPL and then issue a bond with default conditions depending on restructuring milestones achieved by BPL. Appoint professional management and tender the new power plant. Let the process being handled by international experts.
Hoda 3 years ago
Is this the same bond the former opposition described as an insidious and ill intended attack on the Bahamian ppl? What changed about the details or terms that their opinion on it has changed, if it has?
Hoda 3 years ago
Or rather that would lead their opinion to change?
Maximilianotto 3 years ago
It would be interested to see the term sheet and pledges requested by investment bank. If it’s Goldman they definitely will be tough against inexperienced local politicians who know New York restaurants but don’t have and capital market experience. They should appoint international advisers this is beyond our league.
DiverBelow 3 years ago
From reading pre-election newspapers, it appears the Public knows more about Other Proposals for BPL than their own Board & Former Cabinet. Ai'nt that convenient!
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