Hinds calls for local investment in GPL
US$30M over five years
Stabroek News
February 28, 2003
Prime Minister Sam Hinds is urging Guyanese entrepreneurs and financial institutions to invest in Guyana Power and Light (GPL) instead of depending on foreign investors to finance the cash-strapped company’s needs.
The Prime Minister raised the issue at a press conference he hosted at his Wight’s Lane office last week Thursday and said he was recommending the investment because it was necessary for the development of the country.
He suggested that Guyanese and their financial institutions could participate in a syndicate to put US$10M into GPL this year and a further US$20M over the next four years.
The Prime Minister said that the money invested in GPL initially as a loan would receive an interest rate of 10 per cent or the average Treasury Bill Rate plus 3 per cent, whichever is lower. The loans could be converted into equity at anytime within five years of the time the loan is made.
He is also urging the financial institutions to make short-term loans to GPL at the Treasury Bill Rate plus 2 per cent.
The proposed syndicate would be given two seats on the GPL board of directors once it converts its loan into equity and this could happen as early as October if it were to convert US$7.7M of its loan by that time.
During the February 1 Parliamentary debate on the issue, Housing Minister Shaik Baksh who is heading talks with AC Power, the government’s 50 per cent partner in GPL, said that without an infusion of new investment there would be no improvement in GPL’s commercial and technical losses. He said if AC Power were to walk the government would have to find the new investment required to reduce the technical and commercial losses as well as US$6.8M, which GPL owes its creditors and the US$600,000 a month operating deficit.
