The country of Belize underwent a recession in 2009, but the Belize Electricity Limited (BEL), the country’s premier distributor, turned an $8.9 million profit. That is according to a press release from the company, announcing that it had held its Annual General Meeting today, Thursday, at the Best Western Belize Biltmore Plaza.
Still, BEL claims that its financial situation is not good, as it had only generated a 4.9% Rate of Return on net fixed assets, versus the 12% to which it has claimed entitlement.
“This is well below levels necessary to be able to secure financing and consequently, the Company remains in breach of loan covenants with two of its main lenders,” BEL comments.
In 2007, BEL turned a $30 million profit, and it registered a loss of $10 million in 2008.
“Understanding the importance of this essential service, BEL has been engaging the Government of Belize, the PUC, and all other stakeholders in efforts to resolve the regulatory issues affecting the industry” said BEL CEO Lynn Young.
The company claims that despite its challenges, it has invested heavily in 2009.
“The company aggressively resumed critical initiatives to reduce outages that had to be put on hold in 2008, following adverse regulatory decisions. Distribution systems were upgraded and about 12 miles of power lines constructed in various parts of the country. Equipment were replaced on power lines to minimize system faults, and linemen continued to be trained to carry out maintenance on energized power lines,” BEL added.
The company also noted, “Under the Banana Belt Electrification Project, which is financed by the European Union and the Government of Belize, two more villages, Santa Cruz and Monkey River, received power supply for the first time as they were connected to the National Grid. By mid 2010, BEL will have connected a total of seven communities in the Banana Belt area to the National Grid.”
A number of other important developments took place in 2009: “The cogeneration facility at Belize Cogeneration Energy Limited [at the Belize Sugar Industries in Orange Walk] came on line in December 2009; Belize Aquaculture Limited’s heavy fuel oil-fired generating plant came online in April 2009; and most recently in March 2010, the Vaca hydroelectric facility.”
BEL claims that BAL, Belcogen and Vaca will collectively supply up to 48 MW to boost Belize’s generation capacity to 117 MW, well above the peak demand of 76 MW.
The company serves almost 80,000 customers. While BEL has announced a profit on its books, PUC had noted back in February that the company, BEL, owes consumers over $30 million due to the fact that since fuel prices had plummeted off their 2008 peaks, rates have not been adjusted accordingly. This is because the parties, PUC and BEL, are in a protracted dispute in the Supreme Court over rates and the regulation of the sector.
Government is a minority shareholder in BEL (with holdings by the Social Security Board), while Fortis Inc., of Canada, is the majority shareholder with 68% shareholding in the company. BEL did not reveal how the profits will be shared.