by Linda Straker
- Grenlec repurchased from WRB Enterprises in December 2020
- World Bank has provided a cheaper alternative
The Government of Grenada has changed its proposed methodology for the management of Grenlec and instead will hire a consultant instead of a management company to administer the affairs of the company which was repurchased in December 2020.
After repurchasing the company from WRB Enterprises, Government in a news release issued via the Government Information Service (GIS) said, “Having now acquired majority ownership of Grenlec and with the need for serious investment looming to maintain the company’s electricity generation and distribution capacity, Government has already approached the World Bank and the International Renewable Energy Agency (IRENA) to procure the services of a world-class management company.”
The release explained that the management company role will be to operate the utility, facilitate the divestment of the shares through public offering, and to advance the country’s objectives towards greater use of renewable energy and achieving energy security, returned reliability, lower prices, and greater access, including the provision of much-needed renewable energy powered streetlights across the country.
However, during a news conference on 27 October 2021 which is approximately 10 months after the repurchased, Gregory Bowen who is the Minster Energy and Finance Minister said that this approach is no longer the plan because the World Bank has provided an alternative that is cheaper.
“We looked at the professional ones and the price was quite high, but working with the World Bank they agreed that if we conduct a study, they will make recommendations as if they were the managers,” Bowen disclosed. “Ideally, if we get a consultant, they do not want any executive position so as opposed to getting that company that would have charged a significant amount of money, we have tailored it into a consultancy and the consultancy will be working with the management of the company.”
“So it is in that context that we are moving forward as opposed to a professional company coming and taking everything and charging you a sum of money… We can get the same result with the consultant,” Bowen said.
In 1994, the American company called WRB Enterprises was chosen by the Government of Grenada as the strategic partner for the privatisation of Grenada Electricity Services, but the company sold back Grenlec to the Government following its victory in the International Centre for Settlement of Investment Disputes.
The dispute was triggered after the Houses of Parliament approved the 2016 Electricity Supply Act which was the outcome of a World Bank project involving Grenada and St Lucia but which at its conclusion in 2019 is described as “moderately unsatisfactory” according to the World Bank’s Implementation Completion and Results Report published in 2019. The objective of the project was to establish and operationalise a regional approach to the development of the electricity sector.
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