Officials from the Department of Housing and Urban Development (HUD) exhibited a positive outlook regarding the discussions about the potential use of federal grant money to support the Water and Power Authority’s (WAPA) procurement of propane infrastructure from energy provider Vitol.
This information comes from Governor Albert Bryan Jr., who shared insights during the weekly Government House media briefing on Monday. The governor disclosed that during his recent visit to Washington D.C., he engaged with the Deputy Secretary of HUD to ascertain the ongoing alignment towards resolving the contract disagreements between WAPA and Vitol. This resolution encompasses WAPA’s acquisition of the propane terminal from Vitol.
Governor Bryan, reiterating to the audience that the Senate had approved a credit line which was employed to cover the initial $45 million of the settlement agreement between WAPA and Vitol, mentioned that local authorities are presently coordinating with HUD grants to progress this operation and enhance WAPA’s management.
Finalizing the deal with Vitol is seen as a crucial phase in Governor Bryan’s commitment to amend the energy predicament in the Virgin Islands. Although WAPA represents a segment of the solution, Governor Bryan acknowledged that multiple other components are essential to render energy more affordable and foster novel opportunities within the Virgin Islands.
Initially, there was some uncertainty about HUD’s willingness to fund this initiative due to ambiguities surrounding the nature of the transaction, as per Governor Bryan. The concern from HUD was an assumption that this was a debt settlement, while in reality, it’s an asset acquisition, he clarified.
Indeed, the asset is being obtained at a substantial markdown, highlighted by Governor Bryan, who mentioned that appraisals had approximated the propane infrastructure’s worth to be “in the vicinity of” $300 million. The sole debt linked with this arrangement, he noted, is the government’s obligation to the bank following the previous $45 million disbursement.