The Grenada government says it will not be able to purchase controlling shares in the lone electricity company but is negotiating a possible reacquisition of a portion of the company within a year.
"We cannot buy the shares. We do not have the money to buy them," said Finance Minister Nazim Burke.
US-based WRB Enterprises which owns 61.4 per cent of the Grenada Electricity Company (GRENLEC) recently offered the Tillman Thomas government the option of retaking control of the company for EC$100 million.
Burke said in early January that Barbados-based Light & Power Holdings (LPH), which is a subsidiary of the Canadian firm Emera Inc, had "reached an understanding" with WRB and is close to completing a purchase agreement for the controlling shares in GRENLEC.
Burke said the shares are presently valued at EC$11 but the sale is being negotiated at EC$7.50 per share.
Ownership of the utility is distributed among Grenada Private Power, Belize-based Eastern Caribbean Holdings (ECH), the National Insurance Scheme, the government of Grenada and the general public.
The majority of WRB's stake is held in subsidiary Grenada Private Power, which owns 50 per cent of GRENLEC.
Burke said that under the new agreement, LPH will be allowed to purchase the 61.4 per cent shares.
"However, in keeping with the government's policy that no entity shall own more than 50 per cent of GRENLEC, the new agreement blocks LPH from having any voting rights associated with the Eastern Caribbean Holding shares and allows the government to purchase them at the same price the LPH purchased the shares up to one year after the initial purchase is concluded," Burke said.
Attorney General Rohan Phillip said in anticipation of the LPH takeover, government has been in negotiations with the company and talks are "well advanced".
Phillip and Burke, who have been involved in the negotiations with LPH, said there will be amendment to the Electricity Supply Act to govern an agreement between the Grenada government and the Barbados-based company.
"Some laws are to be passed," said Burke, adding that the government is establishing a "regulatory framework to serve the best long-term interests of the country".
The government has circulated a 20-point document titled 'The New Framework for Grenada's Electricity Sector' which indicates that "an exclusive licence will be granted to GRENLEC to generate electricity from fossil fuels only".
Burke described this as one of the positive outcomes of the negotiations with LPH, saying the government had broken GRENLEC's monopoly on electricity supply.
"Even though government couldn't buy the WRB/ECH shares ... it used it as a historic opportunity to promote renewable energy, including a proposed project for the introduction of electric vehicles and to put policies in place that are fair to all Grenadians. We are very pleased with the outcome of these negotiations," he said.
"The government has moved swiftly and decisively to protect and enhance the interests of its citizens in a sector that is vital to national security. Access to affordable, reliable and clean energy is critical for the sustainable economic development of Grenada," he added.