The government intends to assume responsibility for nearly $250 million of Bahamas Power and Light’s (BPL) debt that was supposed to be settled as a part of the rate reduction bond (RRB) facility, which has yet to be finalized.
Prime Minister Dr. Hubert Minnis tabled a resolution to this effect in the House of Assembly last week Thursday, authorizing the minister of finance to raise by means of a loan $246 million in order to discharge obligations under BPL’s loan facility agreements.
BPL originally entered into a facility agreement for $211 million between lenders Bank of The Bahamas, Credit Suisse, FirstCaribbean International Bank, Royal Bank, Scotiabank and the National Insurance Board on October 2, 2009, amending it on December 14, 2014 and again on March 8, 2018.
A separate facility agreement was entered into on August 24, 2012 with FirstCaribbean International Bank for $35 million and reinstated in December 2014 and March 2018.
Both facilities were expected to reach their extended maturity dates on June 11, 2020, where they were due payable in full.
However, with the RRB delayed due to global economic instability as a result of the COVID-19 pandemic, it is unlikely that BPL would have reached that deadline.
The resolution tabled by the prime minister on Thursday stated that the lenders have agreed to extend the maturity date to July 24, 2020 provided that, “the obligations and commitments under both the $211 million credit agreement and the $35 million credit agreement shall on the new maturity date be assumed by and transferred to the government of The Bahamas.
“And, all principal sums and interest due under the $211 million credit agreement and $35 million credit agreement shall on the new maturity date be discharges from the proceeds of the government’s entry into and drawdown of a separate credit facility authorized by this resolution for up to the aggregate principal amount of $246 million.”
Last year the government passed the Electricity Rate Reduction Bond Bill, 2019 in Parliament, which is expected to help Bahamas Power and Light (BPL) refinance its $321 million legacy debt and raise another $350 million in new funding for BPL to invest in new power generation.