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Massive Puerto Rico loan will be needed to fund LUMA agreement

January 13, 2021

The Weekly Journal:

The Puerto Rico Electric Power Authority (Prepa) needs at least $894 million in funds to execute the agreement with LUMA Energy, according to a report by the Financial Oversight and Management Board (FOMB).

The support is necessary for the funding of operations and maintenance agreement with LUMA, as the public utility’s “cash balances are insufficient to self-fund cash needed for the LUMA conversion,” as per Oversight Board documents filed in December 2020 on “Creditor Mediation and Cash Support Materials.”

Meanwhile, the Institute for Energy Economics and Financial Analysis (IEEFA) said the plan raises questions about the reported savings on the transmission and distribution agreement.

“In theory, the [$894 million] loan will stabilize Prepa’s finances and send a strong signal that the newly privatized Prepa will be able to honor its commitments to vendors,” stated financial analysts Cathy Kunkel and Tom Sanzillo in a recent IEEFA commentary. 

[Rosario Fajardo]

More: Prepa Needs $894 Million to Carry Out LUMA Deal

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