By Belize Live News Staff: Government is stepping in with a $73 million financial lifeline for Belize Electricity Limited, which owes tens of millions of dollars to Mexico’s CFE and Hydro Belize.
Through the BEL Investment Bill, government will purchase preference shares in the utility. Officials say the injection will strengthen BEL’s finances without immediately driving up electricity rates.
Dr. Leroy Almendarez, CEO in the Ministry of Public Utilities, said there were three ways to address BEL’s $75 million in costs it has been unable to recover.
The first option was raising tariffs. Almendarez said with rates already at about 42 to 43 cents per kilowatt hour, recovering that amount would require an increase of at least 5 cents.
“That is option A, it is out,” he said.
The second option was going to BEL’s shareholders, the Government of Belize and the Social Security Board. The third was borrowing from banks, but Almendarez said that door is closed.
“BEL is so indebted that what a bank will do when it assesses your viability, your ability to repay a loan, the ratios do not allow them to go into the debt market. They don’t have the leverage,” he explained.
Instead, BEL approached government to purchase 8,138,020 preference shares at $9 each, which adds up to the $73 million.
The move has raised questions over why public funds should cover the company’s mounting obligations.
