Loan to Puerto Rico power utility won’t impact government’s liquidity, governor says
SAN JUAN – Gov. Ricardo Rosselló assured Wednesday that the Puerto Rican government’s liquidity will not be negatively affected by its $300 million loan to the Electric Power Authority (Prepa) because it can be repaid with federal funds.
During the Puerto Rico EXPO event, Rosselló said the deficiency, or liquidity problem, in the Treasury Single Account would put the government in a position to qualify for a loan from the U.S. Treasury Department and correct the deficiency.
“I believe we are at between $1.5 billion and $1.3 billion, subtracting $300 million puts you close to $ 1.1 billion in Puerto Rico’s liquidity,” Rosselló said. “To the extent that we lower the Treasury Single Account, it will reach that threshold that will allow us access to that capital…. The important thing is we have been able to somewhat capitalize the Electric Power Authority so we don’t have to take extreme measures, which was our concern.”
When told the local Treasury has said the cash flow is of about $1.8 billion and the U.S. Treasury establishes a maximum of $800 million to qualify for the loan, Rosselló said the loan is necessary because the estimate of Puerto Rico operations for one month is about $1.3 billion after having taken numerous liquidity measures.
The government recently announced plans to sell the power utility’s assets, a process in charge of Citigroup Global, which in the past was a creditor of that public corporation.
Although Rosselló said he was approached by investors interested in doing business on the island during a recent stateside event, he did not recall whether anyone expressed interest in investing or acquiring Prepa.
“I always direct the process toward the entities that are going to be running [those endeavours], whether it is infrastructure…. When those requests come, they are sent to the relevant authorities so they can carry out that effort,” he said.
Rosselló said he has not made Prepa’s nor the Aqueduct & Sewer Authority’s fiscal plans public because he expects these to end up being draft plans and not working documents. He stressed that the changes, unlike the fiscal plans of those entities that were made public on Jan. 24, are “in magnitude but not in scale.”