By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A successful renewable energy bidder yesterday unveiled plans to raise a total $132.5m from Bahamian investors to finance the development of new power plants on Abaco and Eleuthera.

EA Energy, unveiling dual equity and debt capital offerings that will launch tomorrow, said it aims to raise $100m in bond financing as well as solicit $32.5m in equity capital that will give Bahamian investors a collective 25 percent ownership interest in the solar and liquefied natural gas (LNG) driven power provider. The offerings are due to close on April 16, 2025, after some 15 days.

The company’s separate equity and debt private placement documents, which have been released for Bahamian capital markets scrutiny, suggest that the two power plant projects will be de-risked via the signing of a 25-year power purchase agreement with Bahamas Power & Light (BPL).  The latter will be required to purchase a minimal amount from EA Energy and compensate it at “the contract price” if it misses this threshold.

EA Energy is estimating that its Eleuthera and Abaco power plants, which will be constructed on land adjacent to BPL’s existing Hatchet Bay and Wilson City power plants, will supply energy at 25.47 cents and 25.79 cents per kilowatt hour (KWh), respectively, when they begin generating electricity in the 2026 third quarter. Site clearance work was already shown to have begun.

Given that BPL was charging a combined all-in 35 cents per kilowatt hour over 800 KWh in February 2025’s billing, the tariffs proposed by EA Energy would appear to represent between a 26.3 percent and 27.2 percent or just under 10 cent per KWh decrease compared to existing billings.

EA Energy’s equity private placement document showed that, together, the two power plants will create some 38 full-time jobs - 16 in Eleuthera, and 22 in Abaco - with a combined annual payroll of $2.762m. Their combined revenue is forecast to grow from $50.1m during their first full year in operation in 2027 to $131.9m in 2050 - the last year before the 25-year PPA ends.

The renewable energy provider is a joint venture between Consus, a Turkish energy company, and Verdant, a Bahamian entity for whom few details were disclosed. Following the private placement equity raise, both partners will retain a 37.5 percent ownership interest with the remaining 25 percent held by Bahamian investors. Each will thus be selling off 12.5 percent of its existing 50 percent equity stake.

The participants in EA Energy, and the renewable provider itself, were both described as having existing strong Bahamian links. EA Energy was said to have the Nassau Cruise Port as a “sister company”, although the link was not fully explained, while Verdant is a “shareholder in Island Power Producers (IPP)..... the 60 mega watt (MW) LNG-fuelled shore power project development in New Providence”.

That will supply clean energy to ships docked at Nassau Cruise Port. Erold Farquharson, a contractor, who is Island Power Producers’ managing director, is also named as EA Energy’s chief executive, and EA Energy’s Board includes as directors Anthony Ferguson, the CFAL president and founder, and Antoine Bastian, the Genesis Fund Services’ principal.

Island Power Producers’ address, No.3 Bayside Executive Park in western New Providence, is the home of Levant Advisors, whose principals are listed on the company’s website as Mr Ferguson and Mr Bastian. The duo are heavily involved with the Government’s efforts to monetise The Bahamas’ seagrass meadows, mangroves and other so-called ‘carbon sinks’ via the creation of ‘blue carbon credits’.

CFAL, which is acting as placement agent and adviser for both offerings, said the $100m bond issue will have an 8 percent interest coupon that is paid semi-annually. The first payment is scheduled for October 30, 2026, and it represents an attractive rate likely to appeal to institutional and high net worth investors given what is available on bank deposits and a Bahamian Prime rate at 4.25 percent.

This capital raising is targeted at specific investors, so members of the Bahamian public should not seek to apply or become involved. However, CFAL said it will conduct a retail offering for EA Energy at the end of the 2025 second quarter where small individual investors will be able to invest $1,000 or more.

EA Energy, which was awarded the Abaco and Eleuthera contracts through the Government’s competitive renewable energy request for proposal (RFP), said projected total capital spend for both projects is a combined $136.23m. “The forecasted timelines of the projects are identical on the development side,” the EA Energy private placement said. 

“It is expected that design and permitting processes will be finalised in the second quarter of 2025. Upon receiving necessary permits, EA Energy intends to start construction works in the third quarter of 2025. The completion of commissioning and start of operations are expected to take place in the third quarter of 2026 with a 25-year operation period ending in the second quarter of 2025.”

With energy production having reached 79m KWH and 118m KWH in Eleuthera and Abaco, respectively, for 2023-2024, the offering document disclosed that EA Energy is forecasting 2 percent annual growth in electricity demand for both islands with a one-time 15 percent jump in 2029 driven by the completion of new resort developments that will add to the energy load.

“For growth projections, EA Energy, to remain on the conservative side, have opted to forecast a yearly increase of 2 percent in base electricity demand for both islands. It is important to note, however, that the generation facilities are designed to accommodate higher annual demand increases,” the offering document said.

“Additionally, EA Energy has projected a one-time increase of 15 percent in 2029, driven by recent hotel developments on the islands. These developments include, but are not limited to, the Treasure Cay redevelopment and South Abaco Resort developments in Abaco, as well as the Ritz Carlton Reserve Luxury Resort & Residences and Bel Air Luxury Resort & Residences developments in Eleuthera, which are expected to raise electricity demand significantly.

“Another conservative aspect of the 15 percent increase projection is the consideration that some of the hotels being developed will not be connected to the grid and will generate their own electricity.... Over the past six years, Eleuthera, including Harbour Island, has maintained consistent electricity production, leading to a CAGR (compound annual growth rate) of 7.14 percent across the timeline,” EA Energy added.

As for Abaco, it noted: “Hurricane Dorian, the costliest hurricane in the nation’s history, had a devastating impact on Abaco and resulted in the tragic loss of numerous lives and caused severe financial damages.

“Before Dorian’s landfall, the total electricity production in the island was over the 100m kWh per year threshold and had grown a further 6.07 percent during the 2018-2019 period. Since then, with the recovery efforts, electricity production has surged back up to 118.574m kWh and is expected to increase even beyond previous production levels.”

Describing how the project has been de-risked, EA Energy said: “Under the PPA which will be signed with Bahamas Power & Light (BPL), a minimum annual guarantee mechanism has been established to provide revenue stability for the project.

“This mechanism ensures that BPL will compensate for any shortfall in the agreed minimum baseload consumption amount during a contract year through a shortfall energy demand payment, calculated at the applicable contract price. 

“By securing a guaranteed revenue stream, this provision mitigates financial risks associated with demand fluctuations, reinforcing the project’s financial resilience and long-term viability while ensuring a reliable energy supply to the islands.” The minimum amount BPL is required to purchase can be adjusted annually depending on increases and decreases in demand, but any downward movement is limited to 5 percent.

There is also a restriction on BPL’s ability to source energy from other providers. “The ‘limit on third-party purchases of energy’ provision ensures that BPL will exclusively source energy from the project as long as the facility meets 100 percent of the demand requirements for its customers in Eleuthera and Abaco, and remains capable of delivering at least the agreed minimum purchase obligation,” EA Energy said. 

“This exclusivity strengthens the project’s revenue security by preventing BPL from procuring energy from third-party suppliers or its own generating facilities for customers served by the plant. These provisions collectively reinforce the project’s financial resilience, mitigate risks associated with demand fluctuations, and support long-term revenue stability while ensuring a reliable and dedicated energy supply for the Family Islands.”