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Grenada Private Power and WRB Enterprises vs Government of Grenada: Part 4.3


Compiled by Sandra CA Ferguson

Timelines re Grenlec and the Electricity Sector, February 2013 – March 2020

Part 4 is an attempt to map key events in the evolution of Grenlec and the electricity sector in Grenada in order to be aware of the political and economic context of the various periods and therefore, assist we the people in putting in perspective the actions and decisions taken by our various political administrations. The writer apologises for any inadvertent errors.

Part 4.1 mapped the period 1960–2007. Part 4.2 looked at the period July 2008–January 2013. Part 4.3 will look at the period February 2013 to March 2020.

 

TIMELINE/EVENT REMARKS
19 February 2013: General elections; “clean sweep” by the New National Party; no Parliamentary Opposition
  • Announcement of a default on debt repayments; requests debt re-scheduling with bondholders;
  • Enters into negotiations with IMF for support re a structural adjustment programme
September 2013: Repurchase Offer by WRB to Government of Grenada
  • A media report[1] advised PM Mitchell’s Response: “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. He noted that his major concern was to ensure that his government attracted a third party buyer that “understands the needs of the nation, and ensures that electricity is at a cost that everyone can afford”
  • Refusal of Request for Increased Rates: “The notification to repurchase the shares coincides with 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.”
The Award Document[2] notes as follows:

  • Government Offer: Via letter of 23 October 2013, the Government made WRB an offer of EC $5.49 per share.
  • WRB’s Response: WRB rejected the offer, “but offered “to enter into exclusive negotiations with the GOG if the government [was] prepared to increase its offer to EC $8.27 per share”.
  • Government did not raise its offer; negotiations died; WRB did not pursue the sale of shares to any other interested party at that time.
March 2014: Grenlec commissions solar farm at Citern in Petite Martinique[3]able to generate 31.59 kW or 20% of the island’s peak electricity demand
Remarks from Grenlec’s Interim Manager:

  • this launch in Petite Martinique is a significant step in Grenlec’s aggressive drive to diversify our energy portfolio”;
  • “Grenlec has set a target to achieve 100% renewable energy penetration over the next few years for Petite Martinique which has a population of less than 1,000”.
  • “Renewable energy offers the advantage of reducing the price volatility associated with fuel importation”
June 2014: Government of Grenada enters into agreement with IMF re the implementation of a Structural Adjustment Programme
As part of the conditionalities of the Structural Adjustment Programme undertaken over the period of 2014-2017, the Government of the New National Party administration committed to the liberalisation of the electricity sector. Under World Bank financing, Grenada received support towards “Strengthening the Policy and Regulatory Environment for the Energy Sector” to contribute to improved investment climate and competitiveness.
February 2015, ECERA Project restructured on request from Grenada and St Lucia[4]
  • ECERA to be established as a “regulatory advising agency” instead of a “regulatory authority” – to provide regulatory advisory service to the national regulators, PURC in Grenada and NURC in St Lucia
  • Part B, Operationalising ECERA, to be implemented by the Project Co-ordinating Units in Grenada and St Lucia instead of ECERA.
February 2015: Draft ESA and PURC Acts circulated
July 2015, ECERA Project Outputs re Electricity Sector Reforms in Grenada[5]
  • Consultant contracted October 2014 – July 2015; outputs include:
  • New Electricity Supply Act
  • New Public Utilities Regulatory Commission Act
  • Advisory Memorandum on the implications of the reforms vis-à-vis the Share Purchase Agreement and Strategies to avert Arbitration
  • Grenlec Network and Generation Licences
March 2016, ECERA Project: Rocky Mountain Institute contracted to facilitate dialogue between Government of Grenada and WRB, Grenlec’s majority shareholders[6]
RMI facilitated discussions between GoG and WRB Enterprises “with a view to developing a working relationship, a mutually satisfactory framework with major areas of alignment and process to reach a win-win solution”
2015, Project G-RESCP. Reform of the Electricity Sector in Support of Grenada’s Climate Policy[7]
  • GIZ supporting the Government of Grenada in evaluating the technical, economic and legal details of the draft law re Electricity Supply Act proposed by “the advisors to the Eastern Caribbean Energy Regulatory Authority founded in 2013”.
2016, World Bank Policy Loan:
May 2016: 2016 Electricity Supply Act and 2016 Public Utilities Regulatory Commission Act passed in Parliament
March 2017: WRB claims the new Acts constitute Repurchase Events and “put” their shares to the Government for purchase – as provided by the SPA 1994
2 May 2017: Government responded that there was a good-faith dispute as to whether the passage of the 2016 Acts gave rise to any obligation to repurchase the Grenlec shares from WRB and requested negotiations to “resolve the matter”.
5 May 2017: WRB filed a Request for Arbitration with ICSID.
November 2017: Parliamentary Approval re Act 33 of 2017, Amendment to ESA 2016
  • Corporate Social Responsibility aspect of ESA 2016 was repealed.
  • The amendment provided for all network licencees[8] to pay 5% of their pre-tax profits into a Social Fund established by the Minister, the use of which to be determined by a committee appointed by the Minister
12 February 2018: Grenlec takes legal action to challenge the legality of the Amendment, Act 33 of 2017
April/July 2019: Appointment of the PURC Commissioners[9] and launch of PURC[10]
3 March 2020: Start of PURC Consultations on various PURC regulations[11];
Announcements by Minister Bowen:

  • Government was awaiting the decision of the international dispute tribunal re the valuation of the price of the shares of Grenlec.
  • Government could then purchase the shares and WRB would depart the scene.
  • Four (4) Chinese companies and a local group are interested in purchasing the shares of Grenlec.
19 March: ICSID Award in Favour of WRB

[1]  https://www.nowgrenada.com/2013/09/government-opportunity-buy-shares-grenlec/

[2] ICSID Tribunal Award, para 88

[3] http://grenadaadvocate.blogspot.com/2014/03/grenlec-undertakes-petite-martinique.html

[4] The World Bank Eastern Caribbean Energy Regulatory Authority (ECERA) (P101414)ICR, June 2019, Project Manager’s Exit Report, ECERA

[5] The World Bank Eastern Caribbean Energy Regulatory Authority (ECERA) (P101414)ICR, June 2019, Project Manager’s Exit Report, ECERA – Part A

[6] Ibid

[7] https://www.gis.de/en/worldwide/37595.html

[8] Grenlec the only licencee at time of passage of the Act.

[9] https://www.nowgrenada.com/2019/04/government-appoints-3-member-public-utilities-regulatory-commission/

[10] https://gbn.gd/public-utilities-regulatory-commission-launched/

[11] Consultations put on hold as a result of Covid-19 measures

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