The government is seeking approval to borrow $80 million to progress solarization on the Family Islands in the upcoming fiscal year, Deputy Prime Minister and Minister of Finance Peter Turnquest revealed yesterday.
“Mr. Speaker, an essential pillar to our transformational socio-economic agenda is to achieve and optimize energy efficiency by incorporating the use of renewable resources,” Turnquest said in the 2020/2021 budget communication.
“The imperative of this objective was reinforced by the passing of Hurricane Dorian, which left Abaco and Grand Bahama without electricity for weeks.
“To support the introduction of transformative measures to modernize the energy sector, the government is seeking in its 2020/2021 borrowing resolution approval for an $80 million loan with the Inter-American Development Bank (IDB) to progress the solarization in the Family Islands.
“This is a part of the $170 million Contingent Credit Line for Investment Projects (CCLIP) facility over eight to 10 years that was foreshadowed in last year’s budget communication.”
Turnquest said it will improve The Bahamas’ energy infrastructure’s reliability and resilience to natural disasters invoked by climate change.
He said it will also help to rehabilitate critical infrastructure.
“A key element of phase one of the CCLIP program will be the introduction of rooftop solar installations in public buildings as well as the start of commercial solar installations across the Family Islands,” the finance minister said.
“Once completed, this will achieve fiscal savings for the government by lowering the monthly electric bill for public buildings as well as decreasing the level of subsidization required by New Providence to power the Family Islands.
“Of course, the ultimate goal is to reduce the country’s reliance on fossil fuels, thus eliminating greenhouse gas emissions and reducing our national fuel import bill.”
He said that in the aftermath of Hurricane Dorian and now in the midst of COVID-19, the government has had to make sizable investments and interventions in the energy sector.
“Firstly, we committed to covering the cost of electricity restoration in Abaco, which included the conversion of a portion of Abaco to underground lines, thereby increasing reliability of electricity restoration in the aftermath of a natural disaster.
“To date, Bahamas Power & Light (BPL) has spent and committed some $27 million to this initiative. When done, the restoration of electricity in Abaco is expected to cost some $90 million.”
He also noted that the government intends to begin a $17.1 million street light retrofitting project “shortly”.
The project will be spearheaded by BPL, according to Turnquest.
“This will also support our green energy efforts with its use of LED lighting, ultimately resulting in cash savings to the government and a lower fuel import bill as well,” he said.
Turnquest said BPL, in collaboration with the government, is “actively pursuing” a hedging arrangement with the assistance of the IDB.
“This facility will bring fuel price certainty to BPL, allowing it to lock in reduced fuel surcharges, even when oil prices inevitably rebound,” he said.
“This will mean lower average electricity bills for all BPL consumers.
“All told, the government will have invested over $200 million toward energy reform through its support to BPL, and loans from multilateral institutions toward this initiative.
“We are intent on transforming the energy sector in The Bahamas from its existing antiquated and vulnerable state, to a more sustainable and efficient sector through the use of renewable resources.”