Bahamas’ Public-Sector Debt Surges by $1.28Bn Amid Heavy State-Owned Enterprise Borrowing

  • The Bahamas’ total public-sector debt surged by nearly $1.28Bn over the past fiscal year, driven partly by substantial borrowing linked to the government’s acquisition of the Grand Bahama Power Company and increased financing across state-owned enterprises.
  • According to the Ministry of Finance’s Public Debt Statistical Bulletin for the 2025/2026 fiscal year, total public-sector debt stood at an estimated $14.70Bn at the end of June 2026. This represented an increase of $1.276Bn, or 9.5%, compared with the $13.42Bn recorded at the end of June 2025.
  • Central government’s net financing activities accounted for 54.6% of the increase, while government agencies and government business enterprises accounted for the remaining 45.4%. The report revealed that the outstanding debt of agencies and government business enterprises climbed by $579.1Mn, or 35.1%, to $2.230Bn during the period, with a significant portion of that increase connected to Grand Bahama’s energy-sector overhaul.
  • The Grand Bahama Energy Company (GBEC), the special-purpose vehicle established to acquire the Grand Bahama Power Company (GBPC), obtained $150Mn in external financing towards the purchase. GBEC secured another $50Mn from a domestic financial institution, bringing the financing associated with the share purchase to $200Mn.
  • The company also obtained an $80Mn loan facility to support GBPC’s capital expenditure and working-capital requirements. The debt bulletin further revealed that approximately $131.8Mn represented legacy commercial debt held by GBPC when it was acquired, with some 83.3 % of that debt denominated in Bahamian dollars and the remaining 16.7% in foreign currency.
  • The GBPC-related facilities were among the major factors contributing to the sharp rise in government-guaranteed debt. Total debt guaranteed by the government more than doubled during the fiscal year, increasing by $373.4Mn, or 113.2%, to $703.4Mn at the end of June, and around 98.7% of the government’s guaranteed exposure was tied to government agencies and business enterprises. GBEC accounted for $280.0Mn in newly guaranteed facilities.
  • Meanwhile, central government debt increased by $696.9Mn, or 5.9%, to $12.466 Bn. Despite the increase in the nominal debt stock, the central government’s debt-to-GDP ratio declined marginally to 70.7% from 70.9% a year earlier, a reduction the Ministry of Finance attributed to the pace of economic growth relative to net new borrowing.
  • Public-sector debt-service payments, including refinancing operations, totalled $3.341Bn, a $1.741Bn, or 34.3%, decline from the previous year, when costs were elevated by the government’s external bond liability-management exercise. Interest payments stood at $731.3Mn, while principal repayments amounted to $2.610Bn.

(Source: Tribune 242)