During his Contribution to the Debate on the Special Resolutions for Banco Santander & Bahamas LNG Partner Ltd., on February 4, 2026, Prime Minister and Minister of Finance the Hon. Philip Davis stated that his Government made “a deliberate decision” to move away from short-term fixes and toward comprehensive structural reform.
“Managing decline through rentals and emergency interventions was not a viable strategy for a growing economy,” he said in the House of Assembly. “Passing unresolved risk forward to future administrations and future generations was neither responsible nor acceptable.”
Prime Minister Davis added: “Instead, we committed to rebuilding the energy sector on a foundation of modern governance, clear policy direction, and disciplined execution. That commitment is reflected in the passage of a new Electricity Act, the introduction of a Natural Gas Act, and the development of the first comprehensive National Energy Policy to guide the sector in this country, which was laid today.”
He pointed out that those measures were not adopted in isolation.
“They were sequenced deliberately, beginning with law and policy, followed by carefully structured investments,” Prime Minister Davis said. “This approach ensures that every project proceeds within a stable regulatory framework, with defined responsibilities, transparency, and accountability.”
He added: “Energy reform of this scale cannot succeed without coherence across government, which is why this effort has been driven from the centre of my administration, with sustained Cabinet oversight, leadership by the Ministry, and active engagement with regulators and stakeholders. This New Energy Era is not defined by a single project or a single fuel choice. It is an integrated strategy designed to strengthen the entire energy value chain while reducing vulnerability to external shocks.”
Prime Minister Davis noted that liquefied natural gas (LNG) ws being introduced as a stabilizing fuel to reduce exposure to oil price volatility and improve cost predictability.
“It is not a replacement for renewable energy, but a partner fuel that allows the system to transition responsibly while maintaining reliability,” he stated.
Prime Minister Davis added that utility-scale solar was being deployed to “harness our natural advantages, lower long-term generation costs, and reduce dependence on imported fuels”.
“Battery storage and modern grid management technologies are also being integrated to support these changes,” he stated. “Across New Providence and the Family Islands, solar and hybrid microgrids are being developed with Bahamian partners to improve reliability, reduce diesel dependence, and enhance resilience in communities that have historically borne the brunt of outages.”
Prime Minister Davis added: “At the same time, rental generation is being phased out, with full elimination targeted by fiscal year 2028. In two years, we will say goodbye to the rentals and replace them with permanent solutions, saving tens of millions of dollars each year.
“Each component of this strategy reinforces the others, creating a system that is more reliable, more affordable, and better equipped to meet the demands of a changing climate and economy.”
He pointed out that structural reform required disciplined governance.
“Strengthening oversight at BPL, improving collections, enhancing operational controls, and aligning incentives with performance are essential to ensuring that the benefits of reform are sustained over time,” Prime Minister Davis said. “This administration has focused not only on new infrastructure, but on the systems and institutions responsible for managing it.”
He added: “Consumer protection also remains a central priority. Regulatory mechanisms such as the Equity Rate Adjustment have been used to deliver targeted relief to those most in need. In 2025, this adjustment provided approximately 11 million dollars in savings to consumers, with roughly 20 percent of residential customers paying no base rate during that year.
“This was the result of deliberate policy choices aimed at balancing financial sustainability with providing relief for Bahamian households.”
Prime Minister Davis stated that, as LNG was integrated into the nation’s fuel mix, his Government was projecting approximately 190 megawatts of natural gas generation capacity by late 2027.
“At the same time, 23 microgrid and solar projects are being developed across the Family Islands, delivering close to 200 megawatts of new generation capacity by 2027, including 97 megawatts of solar power paired with battery storage,” he noted.
Prime Minister Davis added: “In New Providence, foundational grid upgrades delivered a 45-percent reduction in outage frequency and a 35-percent reduction in outage duration in 2025 compared to historic averages, with smart grid devices preventing tens of thousands of customer interruptions. These are not projections. They are recorded outcomes that demonstrate what disciplined investment and system reform can achieve.”
He noted that, from a financial standpoint, the transformation underway was restorative.
“A fuel hedging strategy executed in December 2025 now provides three hundred and 65 days of protection against fuel price volatility, covering approximately two and a half million barrels of fuel oil as the transition to LNG and new generation assets proceeds,” Prime Minister Davis said.
“This is what it looks like when you execute a hedge correctly, and fix the foundational issues before you implement it,” he added. “Five-year forecasts put Bahamas Power and Light on track to eliminate its debt within six years and close the long-standing current account imbalance between the Government and the utility.”
Prime Minister Davis pointed out that international institutions had taken note of the transformation, with independent studies projecting that energy sector reform could lift long-term economic growth while reducing fossil fuel imports and external vulnerabilities
“Fuel hedging strategies are now aligned with operational capacity, providing protection against price volatility while new generation assets come online,” he said. “Grid upgrades are underway to reduce losses and improve reliability.”
“And other big changes, including a big change in ownership of the Grand Bahama Power Company, are underway,” Prime Minister Davis added. “This ensures that the savings can be passed on to all Bahamians.”
He pointed out that the resolutions before them that day played a role in moving his Government’s transformation forward.
“Now that we have a solid plan in place, we must finalize the financial arrangements,” Prime Minister Davis said.
He added: “With these resolutions, we are securing funding without authorizing new spending. Instead, the resolutions before us provide limited, transaction-specific guarantees required to support fuel procurement and infrastructure development within a framework of parliamentary oversight.”
Prime Minister pointed out that those guarantees were capped and clearly defined.
“They are brought forward precisely because this Government believes that transparency and accountability strengthen public trust and protect our national interests,” he said. “They ensure that essential energy arrangements can function reliably, while preserving the role of this House in scrutinizing commitments that carry contingent risk.”
Prime Minister Davis stated that, in practical terms, his Government seeked the approval of the House for the Government to provide limited guarantees so that a commercial bank, Banco Santander, S.A., could issue a revolving line of credit and performance letters of credit on behalf of Bahamas LNG Partner Ltd., a special-purpose vehicle “wholly owned by the Government”.
“This funding is a part of the over one billion dollars in funding moving our New Energy Era forward,” he said.
“When this transformation is complete, Bahamians will live in a country where outages will be the exception rather than the rule, electricity costs will be more predictable and more affordable, businesses will be able to plan and invest with confidence, and families will be able to budget without fear of sudden shocks,” Prime Minister Davis added.
He pointed out that energy reform was “foundational work”.
“It is complex, expensive, demanding, and often invisible when done well, but it determines the success of everything that follows,” he said.
Prime Minister Davis thanked the Minister of Energy and Transport the Hon. JoBeth Coleby-Davis, her team, the board of BPL, and the Energy Committee that had met at his office “every Monday at 8 am since we took office in 2021, to ensure that we get this right”.
“This New Energy Era is really about resilience and opportunity,” he said. “It is about doing the hard work now so that future generations inherit a stronger, more secure Bahamas.”
Prime Minister Davies added: “That is the vision guiding this Administration. That is the work before this House. And that is why the resolutions before us have my complete unbridled support.”
