The Tribune

By DENISE MAYCOCK

Tribune Freeport Reporter

dmaycock@tribunemedia.net

THE government is moving to take control of the Grand Bahama Power Company through a state-owned entity, backed by $280 million in guaranteed loans, a plan it says will ease electricity costs.

Grand Bahama Minister Ginger Moxey tabled two resolutions in the House of Assembly yesterday to support the borrowing, which would finance the acquisition of all ordinary voting shares in the power company and provide additional funding for its operations.

The proposals would see Grand Bahama Energy Company Ltd., a government-owned entity, borrow $200 million through a consortium of banks led by Standard Chartered Bank to acquire all ordinary voting shares in the Grand Bahama Power Company — effectively giving the state control of the utility.

A second resolution seeks an additional $80 million loan from Royal Bank (Bahamas) Limited to fund capital expenditure and working capital.

“The people of Grand Bahama have carried an energy burden for far too long,” Ms Moxey said, pointing to the strain high electricity bills place on households, businesses and economic growth.

She said the plan forms part of a broader strategy to address longstanding issues in the island’s energy sector, improve affordability and strengthen reliability.

“High power costs distort every calculation,” she said, explaining that they influence whether families can save, businesses can hire, and investors choose to commit to Grand Bahama.

Ms Moxey said the resolutions are intended to increase public oversight and accountability while fostering economic expansion. She noted the measures are being brought under the Public Debt Management Act, 2021, which requires parliamentary approval for government-backed guarantees.

However, the proposal drew concern yesterday from Ralph Hepburn, president of the Grand Bahama Chamber of Commerce, who questioned the lack of consultation ahead of a decision of this scale.

“The first concern is the level of engagement with stakeholders in Grand Bahama before a decision of this magnitude was made,” he said. “This impacts not only the business environment, but residents as well, and there was no clear discussion as to whether we would support the government acquiring the island’s power company.”

He also warned that the financial risks could ultimately fall on taxpayers.

“Our concern is that the government generates most of its revenue from the people through taxation,” he said. “If there are shortfalls, it is ultimately the Bahamian people who will have to make up that difference.”

Mr Hepburn pointed to existing debt in the energy sector, including at Bahamas Power and Light, and questioned whether further borrowing is sustainable.

“They already have substantial debt in the energy sector, and now there is a proposal to borrow an additional $200 million-plus to acquire GB Power, while also aiming to reduce electricity costs,” he said. “That raises questions about whether sufficient revenue can be generated to maintain and improve the system.”

He also raised concerns about service reliability.

“Grand Bahama Power currently has less downtime over a year than what is experienced in Nassau over a shorter period,” he said. “We have to ask who will ensure that reliability is maintained or improved.”

Mr Hepburn said reliable and modern energy infrastructure will be critical as new investments come on stream.

“We have a number of developments in the pipeline that will require a sophisticated and reliable generation system,” he said. “We cannot afford to be in a position where we are unable to meet the needs of new businesses while maintaining what we already have.”

He further questioned the government’s track record in managing state-owned enterprises.

“At the end of the day, the government’s record in managing profit-driven entities is limited,” he said. “Outside of BTC in its earlier form, there are few examples that demonstrate consistent success in this area.”

Mr Hepburn added that uncertainty remains over whether the acquisition could deliver both profitability and lower electricity costs.w

Meanwhile, the opposition said it supports energy reform but warned the government’s plan risks placing a heavy burden on taxpayers without clear answers on cost and long-term impact.

In a statement, Free National Movement leader Michael Pintard said the proposal asks Bahamians to stand behind $280 million in new borrowing to acquire and operate Grand Bahama Power, despite existing debt challenges in the electricity sector.

“Before adding hundreds of millions more in guarantees, the government needs to explain why it still struggles to deliver affordable, reliable power $800 million later,” he said.

He also questioned key aspects of the deal, including how the purchase price was determined, what liabilities are attached to the company, and whether electricity costs will actually fall.

The Opposition further argued that the structure excludes Bahamians from ownership while exposing them to financial risk.

“Instead, all the risk is being placed on taxpayers, with no opportunity for citizens to participate,” Mr Pintard said.

He said while the party supports improving reliability and reducing costs, it “will not endorse piling new debt onto an already broken system” and “cannot support blank cheques backed by taxpayers.”