Puerto Rico gets $300M loan as officials say more blackouts ‘not an option’

By FeaturesFOXBusiness

Puerto Rico’s recovery: $300M loan granted to prevent more blackouts

Five months after Hurricane Maria devastated Puerto Rico, 20% of residents still remain in the dark, but hopefully not for long. Sec. Manuel Laboy Rivera of the Department of Economic Development and Commerce (DEDC) shares the status of the island’s recovery efforts and why more blackouts are “not an option.”

A judge granted Puerto Rico’s power authority, also known as Prepa, access to a $300 million loan late Monday, preventing the government-run utility from being forced to ration power.

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Prepa, which is $9 billion in debt, said without additional funding, parts of the island would be plunged back into darkness within days.

The cash will come from the government’s general fund, which requires court-approval to access since the island is undergoing a Title III debt-restructuring process.

Puerto Rico’s Governor, Ricardo Rossello, reiterated this week that Prepa will eventually require $1 billion in order to keep the power utility running over the longer-term. The $300 million loan is expected to maintain operations until the end of next month.

During an interview with FOX Business last week, Secretary Manuel Laboy Rivera of Puerto Rico’s Department of Economic Development and Commerce (DEDC), expressed confidence that Prepa would receive additional funding.

“The blackouts [are] not an option, at this point it would be completely unacceptable,” he said. “So we are working very hard at this point to ensure that doesn’t happen, so the citizens and commerce and industries will not be affected. So we’re very positive they will not get to that point.”

Last week, a New York District Court rejected a federal control board’s, which oversees Puerto Rico’s finances, request for a $1 billion loan. The judge ruled at the time that the U.S. territory had not sufficiently proven the money was necessary.

Laboy Rivera told FOX Business that 20% of island residents remain without power, five months after Hurricane Maria devastated all corners of the island.

Earlier this month, some residents were sent back into blackout conditions after a fire erupted at a substation. That situation has been resolved.

Laboy Rivera told FOX Business that these events highlight the “fragility” of the power grid, and the fact that “the system is still vulnerable.”

“We knew that we needed to address the electrical system, the electrical grid, but it was not until [Hurricane] Maria that it was fully exposed and we’re still managing,” he said.

Gov. Rossello recently announced plans to privatize Prepa, which has been struggling for years.