The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Nassau Container Port’s BISX-listed operator has near-tripled the value of its investments by injecting $6m into The Bahamas’ energy reform strategy in a bid to “earn returns on surplus cash” holdings.

Dion Bethell, Arawak Port Development Company’s (APD) president and chief financial officer, in e-mailed replies to Tribune Business inquiries said the investments in Bahamas Grid Company and Island Power Producers are part of an “overall financing strategy” that aims to “offset” interest payments on debt with returns from outlays outside its core port operations and management business.

APD’s just-released audited financial statements for the year to end-June 2025 reveal that, apart from the already-known $1m investment in Bahamas Grid Company, which has taken over ownership and control of New Providence’s electricity grid, it has also parted with a further $5m to obtain an equity ownership interest in the entity that will supply 60 mega watts (MW) of liquefied natural gas (LNG) fuelled power to vessels docked at Nassau Cruise Port.

The operator of Arawak Cay’s commercial shipping port acquired 50,000 common, or ordinary shares, in Bahamas Grid Company in July 2024 at a price of $20 per share before purchasing 250,000 shares in Island Power Producers at the same cost in November 2024. The two deals mean APD’s energy-related deals account for almost 60 percent, or $6m of the $10.043m worth of investments on its balance sheet at end-June 2025.

Mr Bethell told this newspaper that the two equity investments in corporate entities which are playing key roles in The Bahamas’ energy reforms are part of a strategy to generate returns on cash holdings which stood at $17.961m at year-end 2025 - a figure that changes little during the 12 months to end-June.

“The investment portfolio is part of APD’s overall financing strategy to lower our effective cost of capital on long-term debt by earning returns on surplus cash.” he affirmed. “We aim to offset borrowing costs through a mix of capital appreciation, dividends and interest income, while keeping ample liquidity for operations, maintenance and approved capital expenditure.”

It is thought that APD has grown frustrated by its inability to-date to expand beyond Arawak Cay and win other port operations/management contracts both in The Bahamas and elsewhere, which is likely another factor behind the decision to deploy surplus cash assets earning no returns into investments outside its core business.

Mr Bethell said the “strategic equity stakes” in Bahamas Grid Company and Island Power Producers “are minority positions in local energy infrastructure that align with our operations -power reliability, potential future energy cost efficiencies - and offer long-term value potential”.

He added that APD’s goal is to “deploy a prudent portion of cash to earn risk-appropriate returns and reduce net financing costs on our long-term debt profile”, while also maintaining “a conservative liquidity buffer”.

The APD chief confirmed: “This is not a shift away from core port operations, but a disciplined treasury approach aligned with shareholder value.” He added that the port operator gains via interest income on these investments during the year, plus “small” unrealized fair-value gains in 2025 plus dividend income.

“Cash & cash equivalents remained strong at $17.7m, long-term debt outstanding reduced during the year,and we continued regular dividend distributions to shareholders, demonstrating that portfolio deployment is complementary to, not a substitute for, our core capital and shareholder return priorities,” Mr Bethell added.

He said APD shareholders - split into the Government and shipping industry, which each hold 40 percent, and the public which owns the remaining 20 percent - benefit from the conversion of “idle cash into earnings that help offset interest expense, supporting stable dividends and balance sheet resilience”.

And the “strategic energy positions support operational reliability and potential cost efficiencies at the port over time”.

APD’s other investments include a stake in the Bahamas Investment Fund, which holds a collective 49 percent interest in the Nassau Cruise Port on behalf of Bahamian investors, valued at $590,410. This comes from its holding of 85,000 shares in the fund that were purchased at a price of $5 apiece.

“Directors intend to use the book value of Bahamas Investment Fund’s ownership stake in Nassau Cruise Port as a base case for the value of the shares. Accordingly, the net asset value will reflect movements in Nassau Cruise Port’s equity and primarily be driven by the performance of the company,” APD’s financial statements confirmed.

The port operator also holds $2.761m worth of Bahamas government bonds, upon which it earned $206,700 in interest income during its 2025, and US Treasury Bills that had a carrying value of $423,769 at the end-June 2025 date. 

“During the year, the company invested in the CFAL Bond Fund, a pooled investment fund managed by Colina Financial Advisors that primarily invests in fixed-income securities,” APD’s financials added.

“The total cost of shares acquired during the year amounted to $263,600. At June 30, 2025, the investment had a market value of $267,717, which included an unrealised gain of $4,118.”

Mr Bethell said APD’s investments in fixed income securities “provide predictable interest income and principal stability”, while the Nassau Cruise Port gives “measured, indirect participation in the cruise segment”.

Island Power Producers, in which APD has invested $5m, this week said it is seeking a further $100m in financing via a bond issue that is set to launch on November 6. 

Mike Maura, Nassau Cruise Port’s chief executive and APD’s chairman, previously told Tribune Business that the 60 MW shore power project, which will not only involve offloading LNG at Nassau Container Port but transporting it to the generation plant via a pipeline running underneath the port’s property, will create a new revenue stream for APD that will help to reduce the need for any tariff increases to be imposed on imported goods and services.

“It’s a new cargo source type for APD,” Mr Maura explained. “The beauty of it is, in my view, that it doesn’t have an operational cost for APD. You have LNG moving off the ship, running on a pipeline underneath and moving through APD’s property. APD will collect a toll on that.”

Besides Nassau Cruise Port and APD, the other investors in the Island Power Producers consortium include Crowley, the shipping company, which will be responsible for transporting the LNG fuel to Arawak Cay and its subsequent offloading. Siemens will supply the generation equipment and manage/operate the plant, while Watts Marine, a specialist in shore power solutions, will deal with the hook-ups for all cruise vessels capable of connecting to it.

Island Power Producers’ Board includes Charles Farquharson, the former Morton Salt general manager, as well as Angelo Butler, CFAL’s manager of corporate advisory services. Apart from Erold Farquharson, a contractor, who is the company’s managing director, all other members of the executive and management team appear to expatriates.

“Island Power Producers was established to build and operate a state-of-the-art natural gas power plant to provide shore power to cruise ships docked at the Nassau Cruise Port and to supply any excess power to Bahamas Power & Light,” the company’s website confirmed.