Grenada’s new government has signaled its intention to seek a strategic partner to help finance the operations of the country’s only electricity company, GRENLEC, which has continued to operate independently even though the utility’s majority shares public had been bought out by the previous administration last year.
Prime Minister Dickon Mitchell, in an exclusive interview with WPG TV, said the strategic partner could be on board within a year.
“You would want a partner who is already in the energy business and also has a strong renewable footprint and I think that could happen between six and 12 months,” he said, noting that no company is still on the radar of his new administration.
In January 2021, the previous government led by Keith Mitchell announced that it had taken over control of GRENLEC from the American company WRB Enterprise, the operator of a renewable energy development company in the Caribbean and Latin America called WRB Energy.
With a US$63 million settlement, US$12 million less than an arbitration award surrounding the takeover, the government regained control of the 50% stake sold to WRB Enterprises in 1994. Besides, the government also acquired an 11.6% stake in Grenada Private Power Limited, an affiliate of WRB.
In 2017, WRB initiated legal action following the passage of laws by the Parliament of Grenada to liberalize the electricity sector under a World Bank-funded OECS project.
St George’s then said it had already approached the World Bank and the International Renewable Energy Agency to secure the services of a world-class management company to operate the utility and facilitate the disposal of shares through a public offer.
Mitchell, 44, a lawyer, who led the Democratic National Congress to victory over the New National Party in the June 23 general election, said GRENLEC’s board would be changed “and then we have to make a in-depth and in-depth analysis of what we would like to do with GRENLEC”.
Regarding the reacquisition of the shares “in my opinion, it has not been in the best interest of Grenada”, he said.
“Obviously it was a rash approach,” he added, noting that the previous government had taken a “hostile approach to WRB at least from 2013.”
“So if you look closely at what happened to a large extent from 2013 to when the government bought out the majority shares, there was no real capital investment in GRENLEC, which was basically the owners of the company, acknowledging that they are at war… with the government or there is a cold war and therefore they are not going to fatten the calf you want to take from them,” added the new Prime Minister.
He said a review of the engines will show they have been around “for a very long time” and that in the same year the shares were bought back the government had to spend around EC$16 million on a new engine for the plant. . serve electricity customers.
“There are five more engines that need to be replaced or will need to be replaced over the next five years,” he said. “So you’ve just spent EC$16 million to acquire majority shares and you need to find an additional EC$100 million over the next five years to keep the entity operating to the same standards as before.”
“It doesn’t make any sense. So we’re facing a situation where we’re going to be dealing with heavily depreciated and heavily aged engines. You’re going to have to find the capital to recapitalize the business and that’s why when you have the opportunity negotiate, you sit down and negotiate,” Mitchell said.
He said at this point he could not provide a “definitive answer” on how his administration would handle the situation, only that he did not believe the state should continue to be the majority owner.
“It’s energy, it’s a very complex and capital intensive industry and so for me what we have to look at is finding a strategic partner or a strategic shareholder in conjunction with the Grenadian shareholders …which will allow the business to continue on the previous path of being well-run, profitable…and where we have a reliable supply of energy and at the same time begin the process of transitioning to renewables,” Mitchell said.