By FAY SIMMONS
TRIBUNE Business Reporter
jsimmons@tribunemedia.net
ALL three Grand Bahama Opposition MPs have challenged the Government to justify its proposed $331.82m refinancing of debt linked to the Grand Bahama Power Company.
The trio argued that Parliament has not been given the financial information needed to assess the acquisition or its long-term cost to taxpayers.
Michael Pintard, the FNM leader, Central Grand Bahama MP, Frazette Gibson, and East Grand Bahama MP, Kwasi Thompson, all opposed last week’s resolution giving the Government permission to undertake the refinancing, questioning why the Government is seeking to move from guaranteeing debt by its Grand Bahama Energy Company (GBEC) acquisition vehicle to taking on the debt directly as sovereign borrowing.
Mr Pintard said the Government had failed to provide a comprehensive business case for the transaction, including the financial due diligence and valuation supporting its purchase of GB Power.
“If the Government did not know, as they would have us believe about this debt, then they are incompetent. If they knew and did not disclose, they are deceitful,” he argued.
The resolution seeks authority to borrow or refinance $331.82m in obligations associated with the acquisition, including $200m in borrowing for the purchase of GB Power’s ordinary shares, and $131.82m in legacy company debt.
The original financing arrangements presented to Parliament in March involved $280m in Government-guaranteed borrowing through the Grand Bahama Energy Company, comprising the $200m acquisition financing and a separate $80m facility for capital expenditure and working capital.
The Opposition MPs questioned why the legacy GB Power debvt liabilities were not fully explained when the original resolutions were presented, and why the Government was now seeking to assume the borrowing directly.
Mr Thompson said Parliament had still not been given the company’s valuation or sufficient details about the liabilities being assumed, despite the Government returning just months after the acquisition to seek approval for the new financing arrangement.
He said the Government must explain what changed between the original approval and the current resolution, including whether the existing debt was known before the acquisition and whether refinancing had always been intended.
“If this was the plan, why you didn't tell us that to begin with?” he asked. Mr Thompson also questioned whether the Government has completed the risk assessment required under its framework for guarantees, arguing that proper scrutiny of the original arrangement could have identified whether a different financing structure would have been more appropriate.
The Government has defended the refinancing as a means of replacing commercial borrowing with longer-term financing and reducing annual debt servicing costs. However, Mr Thompson said those anticipated savings should be supported by documents showing the existing and proposed interest rates, repayment terms and total cost over the life of the new debt.
Ms Gibson said refinancing did not eliminate the underlying debt or, by itself, demonstrate that the original acquisition was financially justified. “A cheaper loan can improve the financing of a transaction, but it cannot by itself justify the transaction,” she said.
She called for the Government to disclose the independent valuation and due diligence supporting the purchase, alongside financial projections showing how GB Power will cover its operating expenses, capital investment and debt repayments while providing electricity at lower rates.
Ms Gibson also questioned whether the reduced electricity rates will be supported by genuine operating savings, a government subsidy or additional borrowing, warning that costs could ultimately be shifted from customers’ bills to the national debt.
“One cannot make the cost of electricity disappear simply by moving it from the customer's bill to the national debt,” she said.
The MPs also raised questions about the separate $80m facility approved for working capital, including how much had been drawn down, what it had financed and whether it remained a separate obligation.
Mr Pintard said Parliament needed a reconciliation of the full cost of the transaction, including existing liabilities, accrued interest, fees and the status of the separate facility.
He also questioned why the proposed refinancing had not been clearly identified in the Government’s annual borrowing plan for the 2026-2027 fiscal year.
The Opposition leader said the Government should table the full financial due diligence report, a list of liabilities identified before the purchase, the terms of the existing and proposed borrowing, projected interest savings and the total exposure facing taxpayers.
Mr Thompson further argued that GB Power’s financial statements and corporate intent statement should be made public following the Government’s acquisition, stressing the information was necessary for Parliament and the public to assess the company’s financial position and the risks to the public purse.
He also called for the Government to explain its longer-term ownership plans for the utility, including whether it will retain the company permanently or eventually sell shares to private investors.
Mr Thompson proposed reserving a portion of GB Power for Bahamian ownership through a public share offering or professionally managed investment trust, with smaller investments to allow ordinary Bahamians to participate.
The three MPs said they supported lower electricity costs and more reliable power for Grand Bahama, but argued that the Government had not provided sufficient evidence to justify the financial commitments associated with the acquisition.
They said the Government should demonstrate how GB Power will sustain lower electricity rates, maintain its infrastructure and service its debt without creating a continuing burden for taxpayers throughout The Bahamas.