BPL rate reduction bond will be ‘very low’, minister says

Interest rates on Bahamas Power and Light’s (BPL) rate reduction bond are likely to be “very, very low”, Minister of Public Works Desmond Bannister said yesterday.

“The bond is a placement process,” Bannister told reporters.

“The first stage that they go through is called a rating stage. So, they’ve been in the United States. They’ve met with all the ratings companies and then they have what is called a quiet period.

“During that quiet period, the ratings companies are making decisions about the kinds of ratings that they’re going to give BPL. 

“From everything I’ve heard, BPL is going to get top ratings, almost like a sovereign rating that a country can get. That’s going to mean that the interest rates are going to be very, very low.”

The Electricity Rate Reduction Bond Bill, 2019 aims to establish a legislative framework for BPL to raise $650 million through a rate reduction bond.

In November, Bannister said that $321.1 million of the funds raised from the bond will be used to refinance BPL’s debt, $28 million for solar installations on the Family Islands, $70 million for the expansion of the Wartsila plant at Clifton Pier, $15 million to convert Family Island generation facilities to liquefied natural gas, $15 million for fiberglass cooling pipe replacement, $30 million for an advanced metering infrastructure project and $6 million for system reinforcement and customer connections.

He has also said that $48.1 million will be used for a 132-kilovolt transmission and substation upgrades, $34.9 million for line upgrades and extensions, $24.7 million for other substation upgrades and $14.3 million for 34.5-kilovolt line upgrades.

Yesterday, Bannister said once the bond is introduced and “we look at the kind of interest rates that we’ll be able to get for BPL then it’s going to be an opportunity for Bahamians”.

He said the bond will allow Bahamians to invest in the power company.

Bannister said that utility stocks rarely “go down”.

“So, it’s going to be a wonderful opportunity in this country for Bahamians to take some of their funds and invest in that utility to invest in the future of power generation in this country and that’s going to be a really, really good opportunity,” he said.

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Jasper Ward

Jasper Ward started at The Nassau Guardian in September 2018. Ward covers a wide range of national and social issues. Education: Goldsmiths, University of London, MA in Race, Media and Social Justice

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