Jamaica Pubic Service Co.

completed

Until 2001, JPSCo was a state-owned enterprise and the sole provider of electricity in Jamaica. In April 2001, Mirant Corporation acquired majority ownership (80%) and operating control of the company through a competitive bidding process. On March 30, 2001, JPSCo was granted a 20-year exclusive license to provide electricity transmission and distribution services to customers throughout Jamaica. Since early 2001, the company has been forced to curtail load to customers due to limited generation reserves, and problems with a number of company owned power plants and independent power producers (IPPs). As a result, the company has decided to build a new generation plant at a cost of US$127.5 MM, and has requested IFC to provide US$45 million in debt financing for the project.IFC’s involvement in the deal will help mobilize long-term financing from commercial lenders in a difficult market. IFC''s long term financing is critical since, such financing is otherwise not available for Jamaica. Moreover, IFC''s financial support to this newly privatized company could serve as a positive example in support of private participation in the infrastructure sector and catalyze further investments into the sector.The proposed project is of vital importance to Jamaica in terms of electricity supply as this plant will serve to meet current demand. Capacity challenges led to a drop in the company’s availability level to 79.7%, resulting in significant load shedding during February-September 2001. At the peak of load shedding, over 50% of the island was affected. Load shedding is still continuing throughout the country according to a rolling black-out schedule published by JPSCo. With the new capacity added by this project, JPSCo will have sufficient generating capacity to meet the growing demand and the reliability requirements of the system for the next few years. Moreover, the proposed project is the first combined cycle power plant in Jamaica which has a higher thermal efficiency and a lower generation cost than simple cycle plants. By locating the plant in the north, where the demand is growing rapidly, the company has estimated to save approximately US$10 million, which is the cost of building a new transmission line from South to North that otherwise would have been required to meet the demand.