In 1991, the Government of Anguilla decided that to enhance the delivery of electricity services it would be necessary to transition its Electricity Department from a Government run operation to a public company managed along commercial lines. As a consequence The Anguilla Electricity Company Limited, abbreviated ANGLEC, was born. It was tasked with improving the quality and reliability of electricity, the development of staff and the expansion of its facilities and capacity.
As is the case with any changes to the status quo, this decision likewise met with strong opposition. I must confess that I also expressed some reservations about the timing — given the fact that the island wide distribution network was not yet complete. It was felt that at that stage of the development of the service the compassionate approach by Government was necessary to absorb some of the high cost of providing electricity to citizens in remote areas in particular.
In addition, there was a culture of delinquency in the payment of electricity bills that needed to be addressed before exposing customers to the harsh consequences of disconnection. In hindsight, the corporatization of the electricity services was the best solution to the very concerns being expressed at the time. And I want to take this opportunity to commend the Government of that period and in particular, the Honourable Kenneth Harrigan and his Permanent Secretary, Mr Fabian Marcel Fahie for their leadership in that process.
The period after the transition was not a smooth one but there were many useful lessons learned over the years. First and foremost is the fact that monopolies need to be properly regulated and that this is not always achievable when Government is the sole shareholder or when Management neglects its duty of care as a sole provider.
The strategic partnership between the Government of Anguilla and the Commonwealth Development Corporation (CDC) (a UK Government owned entity) included a management contract and financial investment that was never consummated in the manner in which it was agreed. Eventually Government was brought back into the equation after some unfortunate circumstances that necessitated the departure of CDC. That is a story that may not be helpful to recount on this occasion.
The current business model of ANGLEC has developed and has benefited from a diversification of energy sources to better match demand within a stable regulatory environment that affords it a low risk profile. And Anguilla is leading the pack in the Eastern Caribbean in terms of the share of energy generated using renewable energy after the installation of a 1MW solar farm in September, 2016.
Our one electricity company model, along with island-wide electrification, means that ANGLEC provides critical energy to the population, both household and commercial with streamlined operations, delivering reliable energy. The company is robust, having low debt and high-retained earnings. And it is noteworthy that ANGLEC has regularly paid dividends to its shareholders, even in a depressed economic environment.
Based on these very general comments alone, an astute investor, even without further research, may readily consider ANGLEC to be a great entity to add to his/her portfolio of investment. However, we believe that the prospectus being launched this afternoon is a professionally developed document that provides a transparent presentation of the information you will require to determine whether you will seize this limited opportunity to acquire shares in a transformative institution with an upward trending growth trajectory.
As ANGLEC advances and explores alternative sources of energy, likewise the role of Government must transition from direct control of the operation of ANGLEC towards a focus on its regulatory role. This will be accomplished through the sale of a portion of the Government of Anguilla’s shareholdings in this attractive electricity company.
In 2003, the Government first sought to reduce its shareholding in ANGLEC by selling sixty (60.0) per cent of its shares to the Anguillian resident community. Following the success of that initial public offering, the Government is now seeking to continue the transition of ANGLEC into private sector hands in the best interest of ANGLEC, taxpayers and the country as whole. The additional introduction of private capital will further subject ANGLEC to innovative and productive forces.
It is important for me to make the point here that though this sale is in the best interest of ANGLEC’s future success as a commercial entity, Government’s decision, on every occasion that it has decided to divest its shareholding also realizes an additional benefit to the people of Anguilla. For example, the sale of ANGLEC shares in 2003 was to raise capital to meet Government’s contribution to facilitate the expansion of the Clayton J. Lloyd International Airport. And that also created the incentive/catalyst for over 1 billion US dollars of investment our economy during the glory years of 2004 to 2008.
Today the present divestment also comes at a critical time in our strategy to resolve the banking crisis and to energize our depressed economic situation. The sale is intended to raise in excess of 20 million EC dollars in funding to support the resolution as well as other Government debt obligations. This will reduce the need for burdensome tax measures to the residents and businesses of Anguilla to meet these important obligations. The proceeds from this share offer will be used to assist with the Government with its debt amortisation payments.
This launching met with many delays for the kind of technical issues that pop up from time to time during an undertaking of this nature. So I would like to take this opportunity to thank all Government officials on the committee that guided this process; the Management and Board of ANGLEC; and BDO for its professional management of the research; analysis; and coordination necessary to deliver this excellent prospectus that will inform prospective investors. I must also thank The Eastern Caribbean Securities and Regulatory Commission (ECSRC) for signing off on the prospectus and the Bank of St. Lucia for accepting the role as our brokers.
And while I am on my feet I need to make the point that Anguillian companies and individuals are among the investors who will have special consideration in this process.
I thank all interested parties here present and via the various media for taking the time to be a part of this launch. And I look for to the earliest communication of your decision to participate in this exciting investment opportunity.
I thank you all for your kind attention.
