The government of Grenada has been offered an opportunity to buy back majority shareholding in the country’s lone power company, Grenlec.
The government said it has just received notification from GRENLEC’s majority shareholders WRB through its locally registered company, Grenada Private Power Limited, confirming its intention to divest.
Under Grenadian law, the majority shareholders must give the government first bid to reclaim control of the company. The government has 30 days to respond.
If the government decides not to make a purchase offer for WRB’s Grenlec shares within the 30-day period, then the Florida-based company will be notified. WRB can then proceed to seek another buyer.
Well-placed local sources told THE NEW TODAY that the cash-strapped government of Prime Minister Mitchell would be hard-pressed to find the funds that are needed to put GRENLEC back into the hands of the State.
The ruling New National Party (NNP) administration is holding talks with the Washington-based International Monetary Fund (IMF) on a package to assist the island’s ailing economy, which has been dogged by Grenada’s inability to service its national debt of around EC$2.3 billion.
Two weeks ago, a visiting IMF delegation met with members of the Social Society and informed them that the Grenada government has not been paying its bills to creditors and that the fund had to come forward and give assistance.
“The Government of Grenada cannot pay its bill. Therefore it is not creditworthy and cannot borrow any money. Therefore the IMF was lending money to help Grenada to pay its bills. World Bank and the Caribbean Development Bank were supporting the Government of Grenada with its other programmes”, head of the IMF visiting delegation, Aliona Cebotari told members of Civil Society at a briefing session.
Although seeing the possible purchase of GRENLEC as a major “coup” for his administration, Prime Minister Mitchell was, however, quick to clarify that the government’s aim is not to own or manage Grenlec.
The Prime Minister said his administration’s role is to facilitate the process in which the company can be managed by a buyer who understands the needs of the population, and which can ensure that electricity is offered at the most affordable cost to the nation.
“The company’s decision to sell Grenlec shares is probably the best news so far of this government. The electricity company was the birthright of our nation and, as Prime Minister, I believe the previous administration had given away our birthright for almost nothing,” Dr. Mitchell said after receiving the news on Friday.
“I am less concerned with who owns Grenlec. My major concern is to ensure that whatever third party buyer the government attracts understands the needs of the nation, and ensures that electricity is at a cost that everyone can afford,” he added.
The news follows a second request to government in recent months for Grenlec to raise electricity rates.
However, the government has repeatedly indicated that it is not willing to entertain the request for a hike in electricity rates.
Before leaving office following its defeat in the February general elections, the former Tillman Thomas-led Congress administration had been looking at several options to buy the WRB shares including raising the funds from the state-controlled National Insurance Scheme (NIS).