Senate Debates Government’s Purchase of Fortis Dams and BEL Stake

The Senate convened yesterday to debate the government’s proposed acquisition of three hydroelectric dams from Fortis Inc. and the accompanying 33 % stake in Belize Electricity Limited (BEL). The lead government spokesman, Eamon Courtenay, Senator for Governance Business, laid out the administration’s justification for the move, and the financial implications that Belize will face going forward.  During the debate, Senators asked pointed questions on every aspect of the deal, including the structural and operational condition of the three dams. Senator Courtenay confirmed that the facilities are “in good operational condition, with no immediate structural concerns.”   On the financial side, Courtenay explained two key elements, namely, the foreign reserves impact and the payment terms.

Senator Eamon Courtenay, Leader of Government Business: “The intention of the government is, one, as shown by the bill, to acquire the shares, two,  to sell the shares to the members of the public at a price no lower  than acquisition costs so that there would have to be a  net zero impact or a benefit on the government.  And then, Madam President, in order to achieve that, The Treasury bill and the Treasury notes would have to be – the limit would have to be increased so that government can raise the funds to purchase these shares.  The financial secretary would be authorized to make the payments when they are due to close the transaction and then there was going to be an offer, as has happened before with BTL, as has happened with BEL of a divestment of the shares.  The persons who buy shares will be given the exemptions that are set out in the bill and Madam President, the  main objective here is,  one,  to stem the outflow of foreign exchange by Fortis having  the shares which it wanted to sell to another foreigner.  And secondly, Madam President, quite critically, there is an automatic escalator clause in the underlying instruments under which Fortis supplies energy to Belize Electricity Limited.  It is the intention of the cabinet, as I understand it, to terminate that clause so that there is not an automatic increase in the cost of power to BEL, which is then passed on to consumers.”

Senator Courtenay defended the deal by emphasizing that the government acted in national interest, particularly given the risk that Fortis might sell its assets to a foreign company. He argued that the acquisition ensures national control over critical energy infrastructure.  

Senator Eamon Courtenay, Leader of Government Business: “There is one additional feature which is, as I understand it in the negotiations that took place, Fortis indicated to the government that they wish to sell their interest in Belize Electricity Limited, approximately 22 million shares, which they had gotten back in 2015 post the nationalization. Those shares have now been agreed to be sold to the government of Belize at a significantly discounted price and so Fortis at the end of this transaction would be fully exiting Belize.  It would leave in place, Madam President and members of the Senate, Fortis Belize, which would be Hydro Belize, which is a company currently managed by Belizeans.  Belizeans with experience, Belizeans with expertise, and that management would remain in place. Therefore, Madam President, we commend the bill to the host.  We believe it is in the national interest that the legislation be approved in order to stem approximately $20-odd million every year in foreign exchange revenue going out  and to allow Belizeans to participate in this  venture.”

Senator for the Opposition, Patrick Faber, expressed reservations about the financial wisdom of the acquisition. Faber questioned whether the move was fiscally prudent or genuinely beneficial to the Belizean people in the long run, noting that the Government should proceed cautiously given current economic pressures and competing national priorities.

Patrick Faber, Opposition Senator: “Judgment on full display right here in these chambers when two of these members  are from a law firm that acts on behalf of Fortis. The judgment, the timing, the structure of this government’s latest venture into the energy sector. We are told, Madam President, that this bill is a patriotic act, a historic step that brings the dams, the power, and the profits home. But when the flag-waving fades, Madam President, and we examine the facts, what we see is not vision, but political theater. Not foresight, Madam President, but financial nostalgia. Not planning, Madam President, but sentimentality paid for by the Belizean taxpayer. Madam President, Belize deserves the truth behind the glossy presentation.”

The debate concluded with the Government maintaining its firm stance that the buyout represents a forward-looking, patriotic decision, one that places control of Belize’s natural energy resources squarely in the hands of Belizeans, while laying the foundation for affordable, clean, and locally managed electricity generation for generations to come.