“To the extent that BPL needs capital, it is going to impact the company and ultimately the consumer at the end of the day”
NASSAU, BAHAMAS — A former finance minister said yesterday it was “unfortunate” that Bahamas Power & Light (BPL) has been unable to go to market with its rate reduction bond (RRB), noting that it lacks the resources to undertake critical upgrades and tackle its legacy debt.
K Peter Turnquest told Eyewitness News: “It is very unfortunate that they were not able to get the bond off. The money raised from that bond would have been used to not only help pay legacy debt but invest in the company’s transmission and distribution system.
“These were necessary for the upgrades to ensure reliance in the system. Given our exposure to hurricanes and the rest, those things are critical.”
Turnquest added: “The reality is BPL has legacy bills. It also owes the government a sum of money due to loans to loans to pay some of these bills over the last couples of years.
“To the extent that BPL needs capital, it is going to impact the company and ultimately the consumer at the end of the day.”
Economic Affairs Minister Michael Halkitis said last week that the RRB is effectively “dead in the water” given Prime Minister Philip Brave Davis’ scathing criticism of the process during an address in Parliament last Wednesday.
Speaking on the issue at a press briefing at the Office of the Prime Minister last week, Halkitis explained: “There is a loan related to the rate reduction bond that comes due very soon. When you have a loan or any debt obligation with less than one year in maturity, it becomes a current liability, meaning it’s due.
“We have to find a way to deal with it. The rate reduction bond is supposed to retire the loan. We have to find a way to deal with the loan that is becoming due. That becomes a current obligation of the government.
“Either you have to go out and refinance it, or you have to find the money to pay the people back.”
This, Halkitis said, is reflected in the budget.
Davis on Wednesday slammed as “totally disgraceful” BPL’s “floundering attempt” to secure the RRB.
While delivering a 2021/2022 supplementary budget statement in Parliament, he noted that more than $20 million has been spent with still no bond placement after four years.
“I am advised that, due to the delays in the offering, issuing the bond now would increase electricity costs by as much as 20 percent,” Davis said, adding that such an increase “simply cannot be justified” during the current economic hardship brought on by the COVID-19 pandemic.
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