Rate reduction bond funding to close by mid-February

Rate reduction bond funding to close by mid-February

NASSAU, BAHAMAS- The Bahamas Power and Light (BPL) rate reduction bond funding is expected to close by mid-February, the utility’s chairman Dr Donovan Moxey said yesterday.

BPL has announced average household will see a $27 per month increase in their electricity bill, which represents 15 percent of the average bill of $180 per month.

“I can’t say much as it is still in the quiet period,” Moxey said during remarks at the Bahamas Business Outlook conference.

“We can’t say much about it because if we do we violate SEC rules, get downgraded by the ratings agencies and all of a sudden we cant get the kind of rating we need.”

He noted that the bond is expected to close by mid-February and would be for a period of 20-25 years.

The Bahamas Rate Reduction Bond Ltd is the special purpose vehicle that will be responsible for issuing the bonds and making investor interest payments.

The legislation makes clear that BPL’s customer base will be relied upon to service the bond issue.

The legislation, which will replace a similar Act passed previously by the former Christie administration, provides that the bond fee paid by consumers can be adjusted  at a minimum semi-annually to ensure that the collection of such fee will produce sufficient revenues to pay all ongoing financing costs as the same become due and payable.

Apart from paying out BPL’s $321m legacy debt, the RRB will also provide $350m in new financing to enable BPL to invest in its generation and transmission and distribution network.

Yesterday, Moxey maintained a 2003 rate cut was at the genesis of BPL’s woes, citing that it had suffered a loss of revenue of nearly $1 billion as a result.

Moxey also told the outlook that by the end of March electricity should be fully restored to Abaco.

“All of Abaco electrified by the end of March. At BPL we are committed to bringing Abaco back.

Commenting on the Ragged Island solar project, Moxey said: “The project was due to be completed by the end of December but because of Hurricane Dorian was pushed back by 30 days.

“Ragged Island will be up and running pushing solar power to the grid by the end of January.”