President and CEO of Ascendant Group Limited Walter M. Higgins
President and CEO of Ascendant Group Limited Walter M. Higgins

Ascendant, the parent company of BELCO, is looking to use liquefied natural gas (LNG) as a possible energy solution.

But in order to raise capital, the company is slashing its dividend to 7.5 cents per share.

The announcement follows a thorough review of Ascendant Group’s dividend policy by the doard of directors, as Ascendant moves to retain more capital within the company to invest in Bermuda’s energy infrastructure.

This will also help Ascendant as it deals with the effects of Bermuda’s sustained economic recession. 

The energy infrastructure investment requires Ascendant Group capital as well as access to capital from world financial markets to provide new, cleaner, more efficient and lower cost energy production to the Bermuda community. 

Ascendent will be formally proposing its Integrated Resource Plan (IRP) soon. The recommended plan calls for a diverse portfolio of energy solutions, including renewable energy deployment, conservation and energy efficiency measures, and a transition to LNG fuel to achieve lower-cost energy.

President and CEO of Ascendant Group Limited Walter M. Higgins said in a release: “We believe that the former dividend level is unsustainable, given Bermuda’s current economic realities, the effect this has had on the company’s financial performance and the strategic energy needs of the Island. By reducing the quarterly dividend to 7.5 cents per share, we will retain some of the much-needed capital to invest in energy infrastructure, while providing a dividend return to investors commensurate with Company earnings in this difficult economy.”

Mr. Higgins said the initial rollout of renewable and energy efficiency measures contained within the IRP could begin within one year, but transitioning to LNG will take longer. “The IRP is complex and requires a year of additional planning and consultation to arrive at a planning and regulatory framework which will work for customers and investors. Renewable pilot projects are already underway and energy efficiency measures could begin once there is regulatory approval. It is estimated it will take three to five years to build the LNG infrastructure, and this, too, will lead to reduced costs, as LNG has lower and less volatile pricing than the fuel oil we presently use. LNG is also cleaner, with fewer emissions entering the environment.”

The Ascendant Group also includes Bermuda Gas.