The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition’s leader yesterday demanded that the Government provide “clarity and transparency” over the future of New Providence’s energy grid after the management firm overseeing $130m in upgrades and long-term reforms suddenly exited the deal.

Michael Pintard told Tribune Business that much of the Davis administration’s energy reform plans “rely substantially” on overhauling New Providence’s transmission and distribution (T&D) network as he reacted to confirmation that Island Grid, the management firm for Bahamas Grid Company, has withdrawn from the arrangement with effect from yesterday.

Bahamas Grid Company, which is 40 percent owned by Bahamas Power & Light (BPL), in an official statement also revealed that Eric Pike, Island Grid’s principal, and fellow executive, Mei Shibata, have also “stepped down” from their Board positions and roles. It described Mr Pike as a “former chairman”, with that post now taken by Anthony Ferguson, the CFAL chief who helped devise the financial structuring and capital raising for the Bahamas Grid Company transaction.

The Government, in a statement last night responding to Tribune Business inquiries, sought to reassure that the departures of Island Grid and Mr Pike will have no impact on ongoing investment and upgrades to New Providence T&D infrastructure that fall under Bahamas Grid Company.

“The management agreement has come to an end. The investment is ongoing and continues to progress as planned,” a statement issued by Latrae Rahming, the Prime Minister’s communications director, asserted. “The company is now Bahamian-led, and we have full faith and confidence in its leadership, capacity and ability to deliver on its commitments.”

The Bahamas Grid Company release led on the appointments of Dareo McKenzie and Gladys Fernander as its chief executive and chief financial officer, respectively, hailing this as “marking the company’s transition to a fully independent, all-Bahamian-led operating model”.

However, the way the release was structured appeared designed to draw attention away, and distract from, the departure of Island Grid, Mr Pike and his colleague less than two years after they signed - and are still a party to - the June 3, 2024, Heads of Agreement signed with the Government for the Bahamas Grid Company T&D takeover on New Providence.

Tribune Business had been hearing suggestions for several weeks that the Island Grid deal was in difficulties, and that the company and Mr Pike were considering pulling out. This could not be confirmed prior to yesterday’s announcement, and the Island Grid withdrawal is said to be unconnected to the last month’s shooting death of a Pike Electrical employee, for which Superintendent Berneil Pinder, a senior police officer has been charged.

While around 40 Pike workers left The Bahamas in the shooting’s immediate aftermath, to attend the funeral and support the deceased US worker’s family, this newspaper understands that a similar number are due to return to this country to fulfill the grid upgrade contract.

Pike Electrical, founded by Mr Pike’s family in 1945, has provided the manpower, equipment, supplies, expertise and training for the New Providence electrical grid upgrades that have taken place over the past two years. There were suggestions last night that the private equity consortium which acquired majority ownership of Pike in November 2025, TPG and La Caisse, may be replacing Mr Pike and Island Grid in the Bahamas Grid Company deal but this could not be confirmed before press time.

Island Grid is a separate corporate entity formed by Mr Pike to pursue utilities infrastructure deals and projects in island nations such as The Bahamas. The abrupt “conclusion” to its management deal, though, leaves many unanswered questions - questions no one was willing to answer yesterday, as calls and messages left for Mr Pike, Mr Ferguson and Jobeth Coleby-Davis, minister of energy and transport, were not returned or answered before press time last night.

Among the immediate issues for BPL’s 100,000-plus New Providence customers, both businesses and households, is whether Bahamas Grid Company will have the necessary resources to continue with the electricity grid overhaul, including its future expansion and maintenance, without the support and involvement of a management partner such as Island Grid.

The three-way Heads of Agreement, signed between the Government, Bahamas Grid Company and Island Grid, details just how reliant the grid operator was on the latter’s expertise. “SPV (Bahamas Grid Company) shall appoint the T&D manager (Island Grid) as manager of the project,” the documents state.

“The T&D manager shall select a team of Bahamian and non-Bahamian professionals with the technical, financial, operational, management and legal expertise to properly implement and oversee the project and perform the service.” Island Grid also had “the exclusive right to develop and manage the project….. and perform the responsibilities as manager and operator of the T&D system in implementing the project”.

The Heads of Agreement, as well as the capital-raising documents for Bahamas Grid Company, which saw private investors provide it with $30m in equity plus $111m worth of debt financing, also make clear Island Grid’s involvement was intended to be long-term and cover an initial 25-year agreement with an option to extend for a further ten - not a short-term deal for less than two years.

The prospectus for Bahamas Grid Company’s $30m equity capital raise shows Island Grid as earning an annual $4.359m management fee for each of the deal’s first five years based on $75.161m in total revenues. And this is backed by the Heads of Agreement, which states that “for the first five years” Island Grid’s management fees will be equal to 5.8 percent of total grid revenues before thereafter declining by 0.25 percentage points for every 5 percent jump in annual T&D revenues.

“The fundamental question is why does this whole situation seem to have been decoupled?” one financial source, speaking on condition of anonymity, said of Island Grid’s break from Bahamas Grid Company. “The question is: What went wrong? To get a return on investment, you aren’t taking over the entire grid for a short period of time. Your investment horizon is decades. They cannot claim this is all done and planned. This wasn’t for the short-term.”

The source also questioned whether Bahamas Grid Company would gain the same access to, and preferential pricing on, electrical utility equipment without Island Grid’s presence. “They were plugged into the Pike system, so they were getting preferential rates, they were getting critical supplies. These are massive equipment with long lead times,” the source added.

“They [Bahamas Grid Company] cannot replicate the Pike partnership. They do not have the reach and expertise, and level of people to pull from.” However, while Island Grid’s management contract may have come to an end, it is unclear whether Pike’s involvement has ceased based on reports that its US employees will be returning to The Bahamas.

Meanwhile, the source suggested the absence of Island Grid or any other management firm calls into question Bahamas Grid Company’s reason for being. Set up as a special purpose vehicle (SPV) to hold and own New Providence’s electricity grid, they argued that its existence merely creates another layer of cost for electricity consumers and taxpayers - and that its functions may be better off folded back into BPL.

Bahamas Grid Company’s investors, especially those who invested in its $111m bond issue, and are awaiting interest payments on their outlay as well as the ultimate return of their investment principal, may also have questions about the end of Island Grid’s involvement after less than two years as this was clearly not contemplated by the offering document that convinced them to part with their funds.

Mr Pintard, meanwhile, questioned whether Island Grid’s exit will impact the grid upgrades that are essential to enable utility-scale solar providers on New Providence, known as independent power producers (IPPs), to safely supply electricity to the T&D network. Bahamas Grid Company’s Heads of Agreement commits it to improvements that are able to accommodate an additional 172 mega watts (MW) of energy supply above and beyond present capacity.

“Much of what the Government has forecast depends on the grid,” the Opposition leader told Tribune Business. “If we are talking about solar deals being signed on New Providence, has the grid upgrade work been completed to the extent it can receive power from IPPs? If the T&D system has not been dealt with, how does that impact all the IPPs relying on a stable grid that has the capacity to receive power from them? Everything hinges on this. It’s a fundamental issue.”

Calling on the Government “to finally be completely open and transparent with what’s happening for this particular agreement, and what are the implications for all the energy projections they have made that are tied to the success of the repair and transformation of the grid”, Mr Pintard added: “Their overall strategic plan relies substantially on what happens with the transmission and distribution system.”

Island Grid’s departure also appears to coincide with previous Bahamas Grid Company statements asserting that the $130m initial T&D upgrades would be completed this month - April 2026. The latter added that it was “targeting completion in late April”, with outage frequency and duration having declined by 45 percent and 35 percent, respectively, in 2025 compared to 2024.

“The Government has an obligation to clarify for the public whether or not the grid agreement they put in place, which was supposed to fix deteriorating T&D infrastructure, whether or not they [Bahamas Grid Company] have completed that,” Mr Pintard argued. “If they have not completed that, at what stage are they at in this process, and under what circumstances have Pike and the others transitioned from previous positions they held, and where does that leave Bahamas Grid and the grid contract the Government entered into with them?”

While praising Bahamas Grid Company’s all-Bahamian leadership, Mr Pintard reiterated that Bahamians “want to understand whether or not the terms of engagement have been satisfied”. He added that this needed to come from both Prime Minister Philip Davis KC and Mrs Coleby-Davis, adding that the latter prior to the House of Assembly’s dissolution had “gone to great lengths to say everything’s moving ahead” in the aftermath of the Pike employee’s shooting “but this clearly shows this is not the case”.

“They ought to provide clarity with respect to what the agreement is,” Mr Pintard said. “Exactly where does this leave the agreement? Quite frankly, we remain concerned because it has certainly not been a transparent process all along, particularly when government officials speak on it. Listening to the Prime Minister and minister, we believe they have not provided the public with any clarity before and with this recent development.”

He added that he had spoken to one BPL worker “with significant influence in the union”, who said “uncertainty surrounds” the future of staff at the utility - especially the 123 T&D staff - the “vast majority” of whom opposed being transferred or seconded to BPL.

Mr Pike and Ms Shibata appear regularly as signatories on the New Providence grid deal documents, binding Bahamas Grid Company as well as Island Grid not only in the Heads of Agreement but the likes of shareholder agreements and transition services agreements.

Island Grid’s withdrawal also raises questions over whether the Heads of Agreement’s termination provisions have been triggered - with several clauses appearing to stipulate that one party must buy out the other if this occurs.

“In the event that the management agreement shall terminate at any time and for any reason, the parties hereto undertake and agree to negotiate in good faith, and incorporate into the shareholders' agreement, details of the manner, terms and timing upon which their respective shareholding in the capital of [Bahamas Grid Company] shall be disposed of which may include the Government having a right of first refusal to acquire 100 percent of the shareholding of [Bahamas Grid Company],” the Heads of Agreement asserts. Bahamas Grid Company is currently 60 percent majority owned by the private investors, including the Arawak Cay port, who provided the $30m equity.

As for its new management team, Bahamas Grid Company said Mr McKenzie has more than 30 years’ leadership experience across the energy and infrastructure sectors, including senior operational roles at GE Vernova and Consolidated Edison of New York.

“He has led large-scale grid modernisation and construction programmes, managed billion dollar capital portfolios, and delivered complex energy projects focused on reliability, resilience and operational performance,” Bahamas Grid Company added.

Ms Fernander, a former chief financial officer at Commonwealth Bank, is a certified public accountant with more than two decades of executive financial leadership in regulated environments

“Together, Dareo and Gladys bring the operational and financial leadership required to grow a resilient, high-performing utility,” Mr Ferguson said. “Just as importantly, this transition reflects the strength and capability of Bahamian leadership at every level of the organisation.

“On behalf of the Board, I want to thank Eric, Mei and the entire Island Grid Solutions team for their leadership and expertise in building Bahamas Grid Company into a fully operational utility and strengthening New Providence’s transmission and distribution system. We now move forward as a fully Bahamian-led organisation, focused on delivering long-term performance for our country, our children and our grand-children.”

“We are honoured to have had the opportunity to set up Bahamas Grid Company and conduct the biggest grid upgrade project for New Providence over the past two years,” said Mr Pike. “I would like to recognise the dedicated employees of Island Grid, Pike and Bahamas Grid Company, whose hard work and commitment were instrumental to this achievement, and extend our best wishes for Bahamas Grid Company’ continued success.”

Bahamas Grid Company said that, over the past two years, it has “made meaningful progress in strengthening New Providence’s electricity network, improving reliability by almost 50 percent and updating its critical infrastructure through a $130m grid upgrade project. With the transition to full independence, the company will now be focused on the disciplined management of the system to ensure its long-term system performance”.