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PFA Closes on $100 Million Line of Credit, Makes First Draw for VITOL Payment

After receiving approval from the Senate in April, the Public Finance Authority officially closed Tuesday on a $100 million line of credit with First Bank of Puerto Rico and drew down $45 million to repay money advanced from the General Fund for the acquisition of propane assets for the V.I. Water and Power Authority. 

WAPA needed about $45 million to make a good faith payment to propane supplier Vitol for the storage facilities it built under a 2014 contract that allowed the utility to convert to a predominantly propane operation, which is also a cleaner-burning fuel than diesel.

Senators found out during a session in April that in order to meet Vitol’s deadline, the $45 million was advanced from the General Fund, while WAPA works through the V.I. Housing Finance Authority to get the money reimbursed by federal funding awarded through the U.S. Department of Housing and Urban Development. 

In response to the news, senators during the April session introduced an amendment in the nature of a substitute to the original bill sent down by Gov. Albert Bryan Jr., which initially requested a $150 million line of credit. 

The bill as amended reduced the line of credit to $100 million and mandated that WAPA be placed on a hiring freeze until it enters into a contractual agreement to hire a turnaround management company. The executive branch will be in charge of getting and managing the turnaround company and must submit reports to the Legislature.

During Tuesday’s weekly press briefing, Government House Communications Director Richard Motta said the acquisition of Vitol’s assets — the total dollar figure of which is still in contention — will give WAPA more control of its fuel supply and management of its fuel costs, which will eliminate some large debt so the utility can focus more on “executing its strategic priorities.”

Related Link: https://stthomassource.com/content/2023/04/14/amended-and-approved-wapas-bail-out-makes-its-way-to-gov-bryan/

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