Jamaica Energy Partners (JEP) is a 74.2 MW barge-mounted power generation plant using medium-speed diesel engines burning heavy fuel oil. Developed as a fast track project in 1995, it was the first Independent Power Producer commissioned on the island of Jamaica. The project sells its capacity and energy to Jamaica Public Service Company (JPSCo), the national integrated public utility and the grid operator, which was publicly-owned at that time, under a twenty-year (20) PPA contract and a thirty-year (30) electrical license. IFC provided financing for JEP in 1997. Jamaica relies almost entirely on imports of fuel oil to power its generation plants. The high cost of fuel and other factors contribute to the high electricity tariff in Jamaica. Under a long-term development plan, the Government of Jamaica is seeking to build larger and more efficient plants and secure cheaper sources of fuel for Jamaica. However, to meet the continuing demand growth on the island, a 50 MW capacity addition was urgently needed by end 2005. In 2004, JEP and JPSCo signed a Memorandum of Understanding (MOU) to deliver additional capacity. As per the MOU, JEP will increase its capacity from the currently installed level of 74.2 MW to 123.6 MW by building a 49.5 MW barge-mounted plant based on updated diesel engine technology burning the same heavy fuel oil. The new barge will be located at a leased site, 200 feet alongshore the existing barge. JPSCo, 80% owned by Mirant Corporation of the US since 2001, will purchase JEP’s aggregate capacity and power under a 20 year Power Purchase Agreement. Petrojam, the current fuel supplier of the existing capacity, will continue to supply fuel oil under a Fuel Supply Agreement. The Project also involves restructuring JEP’s existing debt (which has a final maturity in 2007 and 2009) with debt of longer-maturity (15 years). This will reduce JEP’s debt service burden, allowing it to offer JPSCo a lower charge for the capacity of the whole expanded plant which will benefit Jamaican consumers also. The IFC’s involvement in the financing will not only mobilize financing from commercial lenders in a difficult market but demonstrate as a vote of confidence its support of private participation in the development of the infrastructure to the Jamaican economy thereby boosting investor confidence in the country.