After years of load shedding, blackouts and generally unreliable electricity service, the Government of Grenada commenced an international privatisation process in 1993 with the aim of identifying a new strategic investor best able to spearhead Grenlec’s transformation from a dysfunctional state-run enterprise into an effective public-private partnership.
Drawing upon financial, technical and legal assistance provided by several international aid organizations, plus extensive energy sector expertise provided by the global consulting firm Price Waterhouse, the Government’s privatisation process elicited proposals from a broad array of foreign energy sector bidders. After reviewing the proposals, the Government determined that WRB’s bid offered the strongest package of (a) remuneration to the Grenadian state, (b) additional financial support for Grenlec, (c) relevant Caribbean utility sector experience, (d) significant technical expertise, and (e) a demonstrated record of dedicated development support for its host communities.
Regrettably, recent remarks by the Minister for Communications Works and Public Utilities to Parliament contain several serious factual misstatements concerning the 1994 privatisation. To set the record straight, following almost 12 months of intensive negotiations with Government and its third-party advisors, WRB’s Grenadian subsidiary Grenada Private Power (GPP) paid $15 million to acquire 50% (7.5m shares) of the State’s 100% shareholding in Grenlec. In addition, to secure an immediate new infusion of capital needed for critical system upgrades and repairs, Grenlec issued and GPP purchased an additional 2 million shares. Per Government’s insistence on limiting GPP to a 50% shareholding in Grenlec, Grenlec simultaneously issued an additional 2 million shares which Government purchased using a portion of the total proceeds it had received from the sale. That brought Grenlec’s total issued shares to 19 million, where it still stands today. Of its 9.5 million shares, Government then elected to retain a 10% stake in Grenlec (1.9 million shares) and sell its remaining 40% stake (7.6 million shares) to various local and regional shareholders. This overall change in Grenlec’s ownership structure is summarized in the following table:
In the ensuing years, Grenlec has transformed our nation’s electricity sector into the world class, highly reliable service enjoyed today by all Grenadians. Contrary to the Minister’s assertions in Parliament, Grenlec has energised economic growth by providing the stable and reliable supply of electricity that was so desperately needed. In fact, Grenada’s GDP per capita has increased by more than 50% since 1995.
This economic growth is further borne out by the fact that Grenlec’s peak demand has more than doubled in the same period (from 14MW to over 30MW) and the annual energy generated has also more than doubled (from 84GWh to 205GWh).
We are proud of our contributions to national development: In addition to the direct capital infusion that the Government received at the time of the sale of shares, Grenlec contributes significantly to Government revenues in the form of income taxes, stamp duty, customs service charge (CSC), etc. For quick reference, we have summarized this information here:
Grenlec has also consistently paid dividends to all its shareholders (including, of course, the Government), apart from the years immediately following Hurricane Ivan. Over the period 1994 to March 2016, Government has received $19.6 million in dividends in return for its 10% shareholding in the company. Over the same period, the National Insurance Scheme has received dividends in excess of $22.7 million, and our other 1,400+ shareholders have together received over $55.6 million, the vast majority of which flowed directly into the Grenadian economy.
Finally, we are privileged through our Community Partnership Initiative to support schools, care institutions for children and the elderly, sport, culture, health, non-Governmental and Government initiatives. This community support program was not required in the 1994 privatisation process, but was instead voluntarily brought to the table by WRB because the Blanchard family has long believed in giving back to the communities in which it does business. To date, the Grenlec Community Partnership Initiative has invested more than $18.2 million in deserving communities throughout Grenada, Carriacou and Petite Martinique.
WRB and Grenlec remain dedicated to working towards a collaborative solution with the Government so that we can continue to deliver superlative electricity service to the people of Grenada.