The Tribune

A Cabinet minister yesterday said The Bahamas is packaging infrastructure projects across multiple Family Islands to make them more attractive to private investors and thus raise the necessary financing.

JoBeth Coleby-Davis, minister of energy, utilities and aviation, speaking at the 10th annual Caribbean Infrastructure Forum (CARIF), said this strategy is designed to create greater scale, strengthen project viability and make key investments more attractive to private capital.

Speaking at an event sponsored by CIBC Caribbean alongside the KPMG accounting firm, Mrs Coleby-Davis said this approach recognises that infrastructure is needed regardless of whether an individual Family Island has sufficient demand and population size to make a standalone project commercially attractive.

“On the Family Islands, we don't have as great as the demand as some other countries, but we still are required to provide that sort of infrastructure,” Mrs Coleby-Davis said.

Rather than treating each project in isolation, she explained that The Bahamas has combined projects to create investment packages capable of achieving greater scale.

“Putting projects together, instead of isolating them, allows us to expand our relationship with investors, and for them to be able to reach financial close,” Mrs Coleby-Davis said.

The strategy forms part of a wider effort to make critical infrastructure projects bankable while balancing The Bahamas’ development needs with the commercial realities facing investors.

During a discussion with Aldo Malpartida, head of infrastructure and energy for the Caribbean at IDB Invest, Mrs Coleby-Davis said creating projects to attract investors begins well before they are presented to the private sector.

The Government, she said, has focused on updating legislation, strengthening regulatory frameworks and using technical support from multilateral agencies to help structure projects in ways that are familiar to financing institutions and private investors. Recent reforms have included updates to the Electricity Act, the introduction of a Natural Gas Act and a revamp of the country's energy policy.

“Investors want predictability. They want to know the start. They want to know how we're going to get to the finish line, and they want that stability. But they also want to see their returns,” Mrs Coleby-Davis said.

She added that The Bahamas’ energy overhaul is expected to require more than $500m, while around $200m is expected to be spent on waterworks across the Family Islands. Airport redevelopment is also progressing through the Family Island Airport Renaissance programme.

Mrs Coleby-Davis said the scale of required investment makes private sector and multilateral participation essential. She added that blended approaches can be particularly important for projects that deliver significant social and economic benefits, but which may not initially meet all the requirements of a conventional private investor.

“What we did in our public-private partnerships(PPPs) was ensure that, in the negotiation stage, we remove as many risks as we can,” the minister added, including potential administrative barriers early.

Mrs Coleby-Davis said steering groups for projects have been structured to include representatives from relevant government agencies, allowing regulatory and permitting matters to be addressed as projects move forward. The Government has also taken on portions of infrastructure development where appropriate to reduce the requirements subsequently placed on private investors.

She added that the Government has undertaken some preparatory and airside works associated with airport projects, leaving investors to focus on other components, including terminal infrastructure.

“Finding ways to de-risk but also reduce the financial burden when the Government is able to partner helps out with getting those projects across the finish line,” Mrs Coleby-Davis said.

She added that concessional funding, guarantees, technical assistance and multilateral financing can be combined with private capital to make projects viable while limiting the strain on government finances. The Bahamas and wider Caribbean face the challenge of modernising ageing infrastructure and making new investments capable of withstanding severe climate events.

“Resiliency is not because of an abstract policy objective, it's actually an economic necessity,” Mrs Coleby-Davis said. To achieve this, The Bahamas is pursuing micro-hybrid projects incorporating liquefied natural gas (LNG), solar and battery energy storage to create more diversified generation systems on islands that have traditionally depended heavily on diesel fuel.

“Investors, we're open for business and looking for great strategic partners that will continue to help us build the framework for our country and grow in places where we can continue to meet the economic demand, but also build with a resilient approach so that we can remain to be sustainable,” Mrs Coleby-Davis said.

“Investors, The Bahamas is working. We have a busy agenda, and we're looking for continued friendship and partners along the way.”