By NEIL HARTNELL
Tribune Business Editor
The New Providence landfill’s incoming manager has moved “in earnest” to close the initial $20m financing it requires with the ink barely dry on its deal with the government.
Kenwood Kerr, principal of Providence Advisors, told Tribune Business that the 100 percent Bahamian-owned group was seeking to rapidly “cement” previous money pledges by investors now that the ten-year agreement was sealed.
Targeted at institutional and “accredited” investors, Mr Kerr said he and the Waste Resources Development Group (WRDG), the group of Bahamian waste services providers who teamed with Providence Advisors to be selected as the landfill’s new manager, were optimistic that the capital raising will be fully subscribed.
“We started yesterday [Thursday] in earnest,” he told this newspaper. “We’re following up. We have some soft commitments and are now going to be cementing those. This first lot is $20m, and we’re confident at the moment.
“We don’t need the $45m in one shot; it’s phased. It’s targeted at local institutional investors, accredited investors. It’s for straight debt; senior debt.” Financings typically close once agreements with the Government are sealed, as investors often wait until this stage is reached to part with their monies and deliver on previous commitments.
The capital is being raised under the banner of New Providence Ecology Park Ltd, the entity created by Providence Advisors and WRDG to operate and manage the Tonique Williams Highway site and oversee its transformation from the health hazard that exists today. The consortium now has 30 days to raise the necessary funding before taking possession of the keys.
“All the scraps and minutiae are being finalised,” Mr Kerr said of the impending landfill takeover. “People are being mobilised so we can hit the ground running in 30 days. We’re aiming to have a staff complement of 40 to 45 people.”
The Providence Advisors/WRDG consortium’s proposal was initially billed as having a $130m price tag when chosen as the preferred bidder in August 2018. This costing was split into around $50m for the landfill’s remediation and operation, with a further $70m earmarked for a small solar and biomass renewable energy power plant that would feed the produced energy into the Bahamas Power & Light (BPL) grid.
However, a $45m figure - relating to just the remediation and operations - was touted at last week’s signing with Romauld Ferreira, minister of the environment and housing. Mr Kerr, though, said the group had not abandoned their renewable energy plans.
“We’re continuing to pursue the renewable energy component of the project as originally envisaged,” he told Tribune Business. This newspaper understands that this was not included in the initial phase due to the need to obtain approvals from both BPL and the Utilities Regulation and Competition Authority (URCA) before selling the energy produced to the former’s grid.
Describing the Providence Advisors/WRDG consortium’s selection and progress to-date as “a monumental achievement”, Mr Kerr added: “I’ve been a part of this process for seven years in terms of time and effort, and two Requests for Proposals. The group brought me in seven years ago, and they’ve been working on it for 15 to 20 years. The mood is very positive.”
He added that a potential initial public offering (IPO) of shares in the landfill manager to the Bahamian public remained “on the table for consideration”.
Providence Advisors/WRDG had previously described the landfill’s transformation as “one of the largest public-private partnership (PPP) infrastructure projects to-date” in The Bahamas, with its proposal featuring a combination of recycling, renewable energy and improved management as the solution to Nassau’s waste woe.
The consortium had intended to recycle and reuse “50 percent or more” of the landfill’s incoming waste streams, while 30 Mega Watts (MW) of renewable energy - split evenly between solar and biomass - was to be sold to BPL through a power purchase agreement (PPA).
The renewable energy and recycling initiatives are designed to extend the landfill’s life by a further 34 years to 2052, as they will consume large quantities of incoming waste, while also providing the necessary breathing room to deal with the site’s present mountains of garbage.
Other goals include the creation of 75 long-term jobs and the reduction of annual greenhouse gas emissions by 220,000 tonnes of carbon dioxide per year - an amount equivalent to 37,000 automobiles’ emissions.
And, adopting the landfill transformation model established in the US, Providence Advisors/WRDG will convert the site into “lush”, green surface vegetation that will facilitate the development of a mini golf course, fitness centre and ecology park that will all be open to the Bahamian public.