B.S.I., B.E.L. sign power agreement
With demand for electricity increasing between seven and ten percent a year any new sources of power are welcome…and today Belize Electricity Limited and Belize Sugar Industries announced that they have struck a deal. The agreement calls for a company owned by B.S.I., BELCOGEN, to build a cogeneration plant at its Tower Hill factory in Orange Walk. It will supply the BEL grid with thirteen point five megawatts of power annually at a price of around eight cents U.S. per kilowatt hour. The plant, which burns bagasse and a small amount of petroleum, is expected to come on line in late 2007. We asked B.S.I. boss Joey Montalvo for some details.
Joey Montalvo, Managing Director, B.S.I.
?BELCOGEN is–if you might say–the acronym for Belize Cogeneration Energy Limited. It is majority owned by Belize Sugar Industries; majority equity owned by Belize Sugar.?
Stewart Krohn
?And who are your partners??
Joey Montalvo
?We are still in the process of discussing the participation of other minority shareholders, but Belize Sugar will be the majority shareholder. The project will require an investment of forty-two million and Belize Sugar is investing fourteen million of that with a remainder as debt financing. The financing for the project is from a syndicate being led by the First Caribbean Bank and the Caribbean Development Bank.?
Stewart Krohn
?Those are Belize dollars we are talking or U.S.??
Joey Montalvo
?Forty-two million U.S. dollars.?
Stewart Krohn
?How exactly will the presume profits from this generation project help the company and the farmers??
Joey Montalvo
?We see Cogeneration as adding value to our business. B.S.I. will survive. Cogeneration is acknowledged worldwide as a logical opportunity to add value to the business. Regarding your question about farmers, the opportunity for investment by the farmers has always been there. There are opportunities for them to benefit. But the value in the bagasse can only be released through investment and the opportunity will be continuously given and as opposed once the plant is operational and off the ground, there will be ample opportunities for farmers to operate.?
Stewart Krohn
?What you are telling me then is that the bagasse, which is the raw product for the generation plant that will really not figure into any new price formula for cane. Essentially the bagasse belongs to B.S.I. and you are going to deal with it the best you can.?
Joey Montalvo
?Well the position is one where the fundamental principle of investing to release the value in the bagasse has been made. The opportunities for farmers will always be there to participate. But if farmers wish to participate directly then that would require a certain level of investment. That is not to say that later on there could be some accommodation in some way for direct benefits to flow. But for the time being, you know, it?s a project that will entail quite a significant level of financing; forty-two million U.S. dollars. Belize Sugar is putting forward fourteen million. We are borrowing the rest of the money; we are seeking participation of other minority shareholders in the process. That is still yet to be finalized.?
