St. George’s: March 10, 2020: The International Centre for Settlement of Investment Disputes (ICSID) on March 4th, 2020 advised the parties – Government of Grenada and WRB – that the International Arbitration Tribunal set up to rule on the matter of whether Government should repurchase WRB’s shares in Grenlec, and if so, how much Government should pay, expects to issue its pending decision during this week of the 8th March, 2020.
The public will recall that in the year 2016 the Government in undertaking its constitutional duties with the help of the World Bank through the ECERA project, passed a new Electricity Supply Act and a new Public Utilities Regulatory Commission Act. These provisions were made for the purpose of regulating the cost of electricity to consumers and for the purpose of encouraging the use of alternative means of generating less costly electricity, including households generating and using their own electricity while selling any excess to Grenlec at prices set by the Commission which the company has vehemently resisted, among other things.
The substantial owners of Grenlec, that is, Grenada Private Power Limited and WRB Enterprises Inc. who own 50% of the company took issue with government’s initiatives claiming that government was in breach of the Share Purchase Agreement (SPA) which was executed by the past Nicholas Brathwaite administration in 1994, and which agreement required the Government of Grenada to buy back WRB shares if certain events occurred including the passage of certain laws, a natural disaster, or the fall in the value of the EC Dollar. WRB then demanded that the government repurchase all WRB’s shares in Grenlec within a stated time period.
Government has denied that it was in breach of the SPA, and in any event refused to repurchase the said shares at the exorbitant price which was called. Moreover, the SPA which was signed in 1994 made any repurchase of Grenlec a penalty on the citizens, as it made the repurchase price more than twice the real market value.
As a consequence, the substantial owners took the matter to the International Arbitration Tribunal in Washington DC in the year 2017 in accordance with the provisions of the Share Purchase Agreement. The matter was heard in June 2019 and its pending decision is due to be delivered this week.
The decision will in one way or the other pave the way for the quick implementation of the Laws and regulations which are expected to bring tremendous benefits to the people of Grenada, Carriacou and Petite Martinique as the cost of electricity is expected to be reduced with homes and businesses being able to produce and use their own electricity. Unfortunately, these benefits for our people are now being delayed by Grenlec’s actions in the local court.
“While WRB may have forced majority shares in Grenlec into Government’s hands,” Public Utilities Minister Hon. Gregory Bowen said, “the Government maintains that it has no intention to run Grenlec, but will ensure that the policies and laws are followed to reduce the cost of electricity for individuals and businesses, as well as to meet Grenada’s commitment to renewable energy use – a requirement for Grenada to access the hundreds of millions of dollars already earmarked – and more.