PHILIPSBURG:--- GEBE is negotiating an additional $28 million in financing as the utility company moves closer to purchasing three new generators, Prime Minister Dr. Luc Mercelina announced Wednesday.
The additional financing would supplement the US $42 million already secured through negotiations between the Government of Sint Maarten and the Netherlands. Mercelina said the original amount is no longer sufficient to cover the generators and other planned investments because prices have increased.
According to the Prime Minister, negotiations with the preferred generator supplier are at an advanced stage. The supplier is now awaiting bank comfort letters from both the Government and GEBE before the proposed transaction can proceed.
“From the side of the bank, we already have our comfort letter ready,” Mercelina said during the Council of Ministers press briefing. “We are just waiting now on the comfort letter of GEBE.”
Once both letters are combined and presented to the preferred supplier, only final details should remain before the Government, and GEBE can proceed with the purchase, he said.
Mercelina described the country as being “very, very ready” to conclude the arrangement.
The Prime Minister said part of the additional $28 million would be added to the original US $42 million to finance the three generators. The remainder is intended for several related energy projects, including preparations at the power plant, the development of a national fuel-storage facility and the start of alternative-energy initiatives.
According to Mercelina, GEBE’s existing generators are between 25 and 30 years old. He acknowledged that successive governments had neglected both the development of renewable energy and the replacement or modernization of the company’s conventional generation equipment.
“We neglected even the fossil-fuel operation of our standard generators,” the Prime Minister said.
Mercelina argued that stabilizing the electricity grid must come before the country can significantly expand its reliance on renewable energy.
“We do not have the alternative green energy yet, and we have no stability of the grid with the old generators,” he said.
The proposed financing would also support infrastructure work at the power plant to prepare the site for the installation of the new engines. A portion is expected to be used for a national fuel farm, which would allow GEBE to maintain its own fuel-storage tanks.
Mercelina said the fuel farm could help reduce expenses associated with electricity production, although he did not provide projected savings or a timetable for its completion.
Another portion of the financing is intended for the development of alternative energy, including a solar-panel project.
The announcement means the generator acquisition could involve at least $70 million in combined financing: the previously secured US $42 million and the additional $28 million now being negotiated by GEBE. However, the Prime Minister did not disclose how much of the new financing would be spent directly on the generators, the fuel farm, solar energy, or plant preparations.
No final purchase date, delivery schedule, interest rate or repayment conditions for the additional financing were announced.
For consumers who continue to face high electricity bills and concerns about the fuel clause, the central questions are now how quickly GEBE can complete the financing, when the new generators will arrive, and whether the investment will ultimately produce a measurable reduction in electricity-generation costs.
