The way is clear for further investment opportunities in Barbados’ energy grid.
During a signing ceremony yesterday between Government and the Barbados Light & Power Co. Ltd (BL&P), approving new operating licences, Minister of Energy Senator Lisa Cummins said the arrangement will benefit Barbadians.
“I think that all of Barbados knows that the grid in the country has had what we have been describing as gridlock. We have a number of projects that have been awaiting connection to the grid [but] it is important for projects to not just have connections to the grid, but to have signed power purchase agreements that establish the relationship between independent power producers as part of the democratisation of the energy process and the off-taker, namely [BL&P].
“We have completed negotiation of the licences for the operations of [BL&P] in Barbados. It allows for those power purchase agreements to be signed because there is clarity and there’s predictability in the relationship between the utility and the Government of Barbados,” she said.
Cummins, speaking at the Warrens Office Complex, St Michael, where the signing took place, said this was great news for the banking sector, renewable energy sector and private investors, adding the negotiation paved the way for more than $500 million in renewable energy investments.
Managing director of BL&P, Roger Blackman, said new licences represented a modern framework to support their work regulating stakeholders in advancing the island’s national energy policy.
“They cover all aspects of our operations, from generation and storage to transmission, distribution, sale and dispatch of electricity. That’s important because it sets a framework for us to be able to operate and create certainty for us and investments that are being made in the sector, not just by us, but by independent power producers and the bankers who are financing them and so on.
“So this really is an important milestone, and it also sets up a strong partnership
between the utility and the several stakeholders in the sector as we move forward to achieve the island’s energy policy goals,” he added.
Blackman said the existing licensing franchise expires in 2028, but shortterm licensing frameworks were not suitable for long-term investment strategies.
“We are among the largest, if not the largest, private sector entity to invest in the island on a consistent annual basis. Significant investments are made not just in new assets, but in maintaining the existing assets that we have.
Long-life assets “These are significant investments with long lives, typically 20 to 30 years. Similarly, persons entering the market to provide electricity will be investing in similar long-life assets, 20 to 30 years. And so, having a franchise that expires in three years when you’re making investments makes it complicated, difficult and uncertain for investors,” he said.
Cummins said renewing the licences with a new framework removed the challenge of failing infrastructure and blackouts occurring due to a lack of new investment.
“What we’ve done is we’ve removed that 2028 hurdle, having already intended to do so since 2021, 2018, and even before then, and now made sure that we have finalised once and for all the new licences for the [BL&P] to allow for that financing to take place, and to allow for the investment in infrastructure and new investment in infrastructure that we, as Barbadians, all want to be able to see and benefit from,” she said.
However, the minister said the new framework will not come into fruition until the old one expired in 2028.
Blackman said the new framework consisted of two licences: one which covered generation and storage, and the other which covered “everything else”, such as transmission, distribution, sales and dispatch. (CA)
