But how much will it cost taxpayers, and are the dams worth a rumored 250 million Belize dollars with many future droughts on the horizon?
We had the tough questions for PM today - as he explained that the genesis of the buyout came when Fortis approached government saying a company in Honduras wanted to buy the hydro dams:
John Briceno, Prime Minister
"After that meeting, I, I, called, privately the vice president, and I said that I'm, I'm disappointed that the company would not talk to us first about the ownership before they go and sell to another company, to another group. He did apologize, but also made the point that they there was it is part of their strategy to move out of the Caribbean. You know, they've sold out already, their operations in Cayman and Turks and Caicos. They started the discussion with this group, but they immediately agreed to, to, to meet with us.
And so we've been in earnest negotiations since May."
"And now we're at the point of not going to the National Assembly tomorrow to the House of Representatives, to get approval for the purchase."
Jules Vasquez:
"Maybe it is that Fortis is moving out of hydro because there have been consistently declining output from those dams because, you know, climate change, it's drier than ever. And in the years to come, many droughts are predicted for the years ahead, 2035 and beyond. And their production is declining. Maybe they're selling it because there's not much future in hydro?"
John Briceno, Prime Minister
"I guess you have this talent to be the only man that can take something negative out of something positive, but I will answer you this way. I want to make the point that Fortis, the company, has changed its strategy. They are moving away from production to just distribution to, transmission and distribution. And that's what they've been, they've been sitting on all of their plants in Canada. Then and at the same time, they have decided to move out of the region."
"And now also now their their strategy was to exit Belize because of this, of the change in strategy of the company has nothing to do with climate change or anything whatsoever. But like in everything, you know, a meteorite can hit Belize, you know, I mean, these things exists in business. You know, you make your projections and from the projections that we can see, we believe that it is a safe investment. And more importantly, it's important for Belize to be the true masters of, of their own destiny, of their, of their energy."
"So, for us, our strategy is to be able to see how we can increase Belizean ownership in these very important national assets."
Jules Vasquez:
"Might it be, though, that they were looking at solar, which, as you know, you I've spoken so many times is the future. But successive administrations, UDP and PUP have blocked them from pursuing this ambition that they had."
John Briceno, Prime Minister
"Maybe you need to ask that question, because I can tell you that we have not blocked them from that. It just so happened that between the PUC and BEL, over the years, they could not find a compromise."
Jules Vasquez:
"When one looks at this acquisition, you have to look at the price. What is the government expecting to pay? I know you will announce it at the house tomorrow, but rumors are that it's above $250 million BZD for the whole package of shares and assets."
John Briceno, Prime Minister
"Well, I think, this I think if you allow me to answer that tomorrow. But this is how I put it to you. When the previous government acquired BTL, it was 35 times earnings, the purchase. And, Fortis Belize, the dams, we're getting it up at six times. So it's way way different than what we have here at BTL. So it is a good deal. It is going to be, I think a fairly, a solid investment for Belize and, and, and for Belzieans. And so we are quite confident that, what, what we're doing, is it's in the best interest of everybody, especially for, for our citizens."
"I must add that once we had the discussions with Fortis, then, over the dam, then they said, well, they also they want to sell out BTL, sorry, BEL, their shares at BEL. As you know, the the previous government, signed a $62 million, a put option that comes into place, came into place in 2019. A put option for 62, a little over 62 million USD for those shares. And in this nnow that they're offered to sell. We've managed to have a good negotiations and we got it down, let's put it this way, more than 60% from the price. Tomorrow I'll give the tight numbers."
Jules Vasquez:
"Impressive. But at the same time "
John Briceno, Prime Minister
"It's a company that is losing money. And we recognize that. And that is why I know we're starting to put attention into BEL"
A press release says, quote, "Government will source the funding for the acquisitions by way of a special budgetary appropriation, expecting to complete the transactions no later than November 15, 2025. Subsequently, the Government will pursue a secondary domestic offering of equity and debt so as to recover the initial acquisition costs. The financial details of the transactions will be outlined during the presentation of the Bill ( tomorrow)."End quote. And you can see that house meeting live on Channel 7.
