NASSAU, BAHAMAS — Bahamas Power and Light (BPL) Chairman Dr Donovan Moxey yesterday stressed that despite the expiration of the memorandum of understanding (MoU) signed with Shell two years ago, discussions are still ongoing to secure the best possible deal long-term for the Bahamian people.
Moxey spoke on the sidelines of a groundbreaking ceremony for a solar car park at the Office of the Prime Minister.
He said: “The Shell agreement did expire on November 3 but we are still in communication and discussions with Shell and still focused on getting the best possible deal for the Bahamian people. One of the things we want everyone to know and understand is that we are talking about a 25-year power purchase agreement. You want to make sure that given the long-term commitment that you are doing everything in the interest of the Bahamian people. If that means that we take a little longer to do what we need to do, then that’s our focus. At the end of the day, getting the Bahamian people the best possible deal long-term is extremely important for us.”
In November 2018, the government signed an MoU with Shell North America (Shell NA) for the development of a gas-to-power project.
The project would include the development of a gas-fire 220-plus megawatt power plant; marine infrastructure to receive liquefied natural gas (LNG); a gas pipeline to bring gas to shore; and an onshore LNG re-gasification terminal. BPL has undertaken to cover the costs to construct the entire 220-plus megawatt power plant at the Clifton Pier site and transfer the assets to Shell NA for its gas-to-power facility.
Moxey said: “We have been negotiating with Shell for two years. Because a date is reached doesn’t mean that everyone just picks up and walks away from the table. We have made a lot of progress. We are still in discussions and doing everything we can to move the ball forward. Still, at the end of the day, we have to do the best we can for the Bahamian people because whatever deal we sign, we have to live with for the next 20 to 25 years.”
Moxey also noted that BPL is pushing to close on a rate reduction bond by the end of January 2021.
The bond, which was first announced late last year, is intended to allow the company to restructure more than $320 million in inherited debt and secure more than $350 million in new funding to address longstanding issues.
“With respect to the bond offering, we are still working very hard to get that deal closed. We have a target date of closing the bond by the end of January next year and so we are working hard. All of the teams are really focused on meeting that date. I am very optimistic that we will be able to get that done by the end of January next year,” said Moxey.