The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The developer seeking to provide clean energy to vessels docked at Nassau Cruise Port has “surpassed” its initial target by raising “close to $60m” in equity capital as its eyes a January 2025 construction start.

Anthony Ferguson, CFAL’s principal, told Tribune Business that Island Power Producers has already beaten the $50m it sought from a private placement targeting specific institutional and high net-worth investors even it has extended the offering by a week from the planned end-October close to allow all interested parties time to make a decision.

Asserting that the Arawak Cay-based power plant’s development is on schedule, he revealed it is forecast to generate up to $40m in revenues per year along with earnings before interest, taxation, depreciation and amortisation (EBITDA) of around $5m-$7.5m once Island Power Producers takes on the debt portion of its total $150m capital investment.

Given Arawak Cay’s industrial and maritime nature, Mr Ferguson told this newspaper he foresees no environmental-related obstacles to beginning the facility’s construction in early January 2025 with the ambition to begin delivering up to 60 mega watts (MW) of power to the docked cruise ships by the end of next year or the 2026 first quarter.

The CFAL chief also disclosed that Island Power Producers also plans to sell its liquefied natural gas (LNG) fuelled electricity to Bahamas Power & Light (BPL) at night when it has no cruise ship customer base in port, thereby lowering this nation’s carbon footprint while also allowing Bahamian businesses and households to benefit from significantly lower electricity costs than they presently enjoy.

Confirming that Island Power Producers’ project is forecast to generate 30 full-time, “high paying” jobs when fully operational, Mr Ferguson added that the construction phase may create work for “200-plus”. He added that the developer was targeting an 80/20 construction workforce mix weighted to Bahamians, but in certain areas - such as gasification and engineering - this was unlikely to be achieved.

“It’s going pretty well,” the CFAL president said of Island Power Producers’ capital raise, “but we have extended it to accommodate some of the broker/dealers because they did not get it [the offering document] in time. We extended it to next [this] Friday because some of them got it late and we wanted to give them time to do research, analysis and speak to their clients.

“But we have already exceeded our objective. We have surpassed it with $60m. We could have closed that today [Friday].” Of the $150m capital investment balance, Mr Ferguson previously told this newspaper that Island Power Producers wanted to raise up to an additional $20m in equity from small Bahamian retail investors in a separate offering likely to take place in early 2025 when the project has been further de-risked.

The remainder of the financing will come from a combination of bond and bank financing, with Mr Ferguson explaining that the debt component will give the likes of pensioners and retirees on fixed income a chance to participate in the Island Power Producers project and earn “a very attractive rate of return”. The debt raising, too, will take place in early 2025.

“We would like for construction to begin at the latest in January,” Mr Ferguson said. “We’re working on the environmental studies right now. Given what is on Arawak Cay we don’t think we should have a problem. We want to start construction by January and start producing power by the end of 2025 or the 2026 first quarter.

“Everything’s looking very good. When it is up and running there will be around 30 high-paying jobs; technicians, engineers. It will be all automated in the data room, the control room. It’s going to be very impressive. We visited a couple of these plants in Malta and Sweden, and we will do the exact same thing in Malta here.”

On the construction side, Mr Ferguson said Island Power Producers’ target is for an 80 percent Bahamian workforce. However, he conceded that in specialist areas such as engineering and gasification some expatriate skills would be necessary, so the ratio could fall to 60/40 especially “given the tight timeline. We want people working 24/7”.

Pointing to the project’s benefits, the CFAL principal added that it will help to lower The Bahamas’ carbon footprint and said: “It will reduce the cost to import our fuel because we’re using a new fuel source, LNG, which is in abundance right now.

“We expect that, once we put it back into the grid, there will be much improved prices for BPL customers. That’s the intent. It will be significantly less” than what it presently costs BPL to produce electricity and bills customers for.

Tribune Business, which previously revealed that both Nassau Cruise Port and BISX-listed Arawak Port Development Company (APD) are part of the Island Power Producers, can also disclose that the remaining partners are all overseas and international firms.

Crowley, the shipping company, will be responsible for transporting the LNG fuel to Arawak Cay and its subsequent offloading. Siemens will supply the generation equipment and manage/operate the plant, while Watts Marine, a specialist in shore power solutions, will deal with the hook-ups for all cruise vessels capable of connecting to it. An Indian company, Intertec, is providing engineering services.

“Watts Marine probably do about 80 percent of all cruise terminals in North America,” Mr Ferguson added. “We intentionally chose partners that are world-class and have an excellent reputation because we cannot afford to get it wrong.”

The power plant facility will “abut” Arawak Port Development Company’s (APD) Nassau Container Port. The LNG will be offloaded at Nassau Container Port and transported to Island Power Producers’ generation plant via a pipeline running underneath the port’s property. Mr Ferguson, together with Mike Maura, Nassau Cruise Port’s chief executive, sits on Island Power Producers’ advisory Board.

Island Power Producers’ main Board includes Charles Farquharson, the former Morton Salt general manager, as well as Angelo Butler, CFAL’s manager of corporate advisory services. Apart from Erold Farquharson, a contractor, who is the company’s managing director, all other members of the executive and management team appear to expatriates.

Mr Ferguson, though, told Tribune Business that the Board’s composition was likely to change once the equity raises were completed so that it is more representative of investors and their interests. Island Power Producers, on its website confirmed that it aims to develop a 60 MW natural gas combined cycle power plant.

“Island Power Producers was established to build and operate a state-of-the-art natural gas power plant to provide shore power to cruise ships docked at the Nassau Cruise Port and to supply any excess power to Bahamas Power & Light,” it added.