The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Small Bahamian retail investors will have the chance in early 2025 to invest up to $20m in the facility that will supply vessels at Nassau Cruise Port with 60 mega watts (MW) of power, it was revealed yesterday.

Anthony Ferguson, CFAL’s principal, told Tribune Business that the planned offering’s structure will likely be similar to that employed for the cruise port where individual Bahamian investors will be able to invest a minimum $1,000 in an entity called the Bahamas Energy Fund.

This vehicle, an investment fund, will hold the collective equity ownership that the retail investors will acquire in the shore power project. Mr Ferguson, who sits on the advisory Board for Island Power Producers, the entity that won the bid to supply liquefied natural gas (LNG) fuelled energy to the docked cruise ships, said the offering is presently being targeted for the 2025 first quarter.

Explaining that the retail investor offering’s timing is connected to Island Power Producers’ efforts to sufficiently de-risk the project, the CFAL chief also confirmed that the consortium is presently “in the market” with a private placement aiming to raise a further $50m in equity capital from targeted institutional investors and high net worth individuals.

Revealing that the total capital investment required for the Arawak Cay-based shore power facility is $150m, Mr Ferguson said the non-equity balance of around $80m or slightly higher will be obtained in debt financing through the likes of bank loans and preference shares.

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 three 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.

“We are in the market,” Mr Ferguson confirmed to Tribune Business. “We are looking to raise in equity at this point in time around $50m. Then we are looking to do a Bahamas Energy Fund. That will be similar to the Bahamas Investment Fund, where investors will be able to invest a minimum of $1,000 in it. We hope to do that in January when we have done most of the heavy lifting.” 

The Bahamas Investment Fund was the vehicle created to hold the collective 49 percent local equity ownership in Nassau Cruise Port. Small retail investors directly acquired an interest in that investment fund, not the Nassau Cruise Port, and a similar structure and terms appear to be being contemplated for the cruise shore power facility.

Mr Ferguson said work is beginning at the proposed generation facility’s site, which is understood to “abut” APD’s container port property. He added that an Environmental Impact Assessment (EIA), and the necessary environmental studies, are underway as is the “final design of the system” while the generation engines are already on order.

“We wanted to take out the risk for the smaller investor, and because of the risk of a retail fund here and the Securities Commission needing time to review it, we felt it better to do [the retail offering] in January; the first quarter of 2025,” the CFAL principal said, explaining why the private placement has gone first.

“It’s going very well so far,” he said of the $50m raise. “I think institutional investors see good opportunities to participate in the Government’s energy sector reform. It’s out in the market and we’re hoping to close it at the end of the month.

“The total capital raise is $150m for the facility, and that includes the gasification plant. They are dual, combined cycle engines and we are getting those from Siemens.” Asked how much Island Power Producers anticipates raising from its retail offering, Mr Ferguson replied: “We’re thinking between $12m and $20m depending on the demand.

“A lot of times people suggest going to the small investor, but a lot of times the appetite is not as robust as the demand for debt because persons like the certainty of a 7-8 percent return that you don’t always get with equity. The goal will be between $12m and $20m for retail investors.” If the latter figure is hit, that would take the total equity raise to $70m.

Mike Maura, Nassau Cruise Port’s chief executive and APD’s chairman, who is also on Island Power Producers’ advisory Board alongside Mr Ferguson, confirmed the respective roles that Crowley, Siemens and Watts Marine will play in the shore power project.

Watts provides shore power in ports such as San Diego, Seattle, Brooklyn, Long Beach, Vancouver and San Francisco, and Mr Maura said: “Watts will be at the slips interface with the cruise port. Their systems and hardware will plug into the ships. It will be the same for ships that have shore power capability at the Nassau Container Port. Watts operates within 30 feet of the bulkhead.”

He reiterated that the shore power project, which will not only involve offloading LNG at Nassau Container Port but transporting it to the generation plant via a pipeline running underneath the port’s property, will create a new revenue stream for APD that will help to reduce the need for any tariff increases to be imposed on imported goods and services.

“It’s a new cargo source type for APD,” Mr Maura explained. “The beauty of it is, in my view, that it doesn’t have an operational cost for APD. You have LNG moving off the ship, running on a pipeline underneath and moving through APD’s property. APD will collect a toll on that.”

Confirming that the capital raising effort has started, he added: “There have been meetings with institutional investors. We have an ongoing discussion in terms of what the equity raise is going to contribute. Those discussions are well underway. There’s been meetings with pension fund managers, there’s been meetings with other investors. Those talks are ongoing.”

Island Power Producers’ 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.