2020/21 Budget Communication 2020-21 Budget Communication - Final (1)-compresse | Page 25

To support the introduction of transformative measures to modernize the energy sector, the
Government is seeking in its 2020/21 borrowing resolution approval for an $80 million loan with
the Inter-American Development Bank (IDB) to progress the solarization in the Family Islands.
This is a part of the $170 million Contingent Credit Line for Investment Projects (CCLIP) facility
over eight to ten years that was foreshadowed in last year’s Budget Communication. Not only will
this improve our energy infrastructure’s reliability and resilience to natural disasters invoked by
climate change, but it will also help to rehabilitate critical infrastructure.
A key element of Phase 1 of the CCLIP program will be the introduction of rooftop solar
installations in public buildings, as well as the start of commercial solar installations across the
Family Islands. Once completed, this will achieve fiscal savings for the Government by lowering
the monthly electric bill for public buildings, as well as decreasing the level of subsidization
required by New Providence to power the Family Islands. Of course, the ultimate goal is to reduce
the country’s reliance on fossil fuels, thus eliminating greenhouse gas emissions and reducing our
national fuel import bill.
Mr. Speaker,
In the aftermath of Hurricane Dorian and now in the midst of COVID-19, the Government has had
to make sizable investments and interventions in the energy sector. Firstly, we committed to
covering the cost of electricity restoration in Abaco, which included the conversion of a portion of
Abaco to underground lines, thereby increasing reliability of electricity restoration in the aftermath
of a natural disaster. To date, Bahamas Power & Light (BPL) has spent and committed some $27
million to this initiative. When done, the restoration of electricity in Abaco is expected to cost
some $90 million.
In addition, as detailed in the last Budget Communication, we will begin the $17.1 million Street
Light Retrofitting project shortly, which is being spearheaded by BPL. This will also support our
green energy efforts with its use of LED lighting, ultimately resulting in cash savings to the
Government and a lower fuel import bill as well.
Mr. Speaker,
Although these initiatives toward solarization and renewable energy will certainly help to
modernize the existing energy mix and lead to a gradual decline in domestic energy prices, this
Government is also minded to capitalize on the opportunity to lock-in a number of benefits
occasioned to the current environment of low international oil prices. Specifically, BPL, in
collaboration with the Government, is actively pursuing a hedging arrangement with the assistance
of the IDB. This facility will bring fuel price certainty to BPL allowing it to lock in reduced fuel
surcharges even when oil prices inevitably rebound. This will mean lower average electricity bills
for all BPL consumers.
All told, the Government will have invested over $200 million toward energy reform through its
support to BPL, and loans from multilateral institutions toward this initiative. We are intent on
transforming the energy sector in The Bahamas from its existing antiquated and vulnerable state,
to a more sustainable and efficient sector through the use of renewable resources.
25