JEP is owned by the Latin Power III funds and controlled by Conduit Capital Partners (“Conduit”), a US-based private equity investment firm focused on infrastructure investment and development in Latin America and the Caribbean. IFC has financed JEP in 2 projects to date in 1996 and 2006.

Project costs are estimated at about $127 million. IFC’s financing will be about $20-30 million, comprising possibly of A and C Loans. Co-financing in the form of parallel long term debt or IFC B loans is expected to come from other international financial organizations and possibly regional commercial banks.

28.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	28.0
Equity

* These investment figures are indicative

The Project is to be located in the Kingston Metropolitan area thus improving voltage and system reliability for the Corporate Area. The site is within 300 meters of the JPS Hunts Bay Substation and one kilometer from Petrojam, on the location of a decommissioned water treatment plant.

The Project is part of a key medium-term process of replacing outdated Jamaican power generation capacity with the most efficient and viable source of generation available in the short term. It should result in a reduction of the cost of energy for the Jamaican ratepayer and improve system reliability, while reducing the country’s fuel bill. The Project is also expected to have significant demonstration effects by showing that a well-structured project in a sector with a sound regulatory regime can attract private sector investment in Jamaica and be successfully syndicated at difficult economic times.

IFC will be providing longer-term financing which is currently not available to Jamaican borrowers in large amounts, both domestically and internationally in the context of the global financial downturn and its impact in Jamaica. IFC’s involvement will also support the mobilization of long term debt co-financing on a parallel basis as well as possibly under the IFC B loan umbrella from regional and international development and export organizations. Finally IFC is demonstrating its support to the Government of Jamaica’s effort to improve the reliability and efficiency as well as the resulting generation costs of the power sector.

This is a Category B project. IFC’s review focused on JEP’s preparation of environmental assessment documentation to meet National Environment and Planning Agency requirements in Jamaica (Performance Standard 1 on social and environmental assessment and management systems). NEPA required that a site Closure Plan be prepared, in addition to the EIA, for the former use of the site as a municipal waste water treatment plant. IFC has recently reviewed the company’s environmental management system (PS 1) and labor policies and practices (PS 2) as part of supervision of JEP’s two existing plants. The plant will utilize current technology Wartsila diesel engines that will be fueled by relatively low sulfur fuel oil from the nearby Petrojam refinery, and the plant is expected to comply with GOJ and WBG environmental requirements, with emphasis on ambient air quality impacts for power plants (PS 3). Major noise producing equipment (e.g., cooling radiators) and oil tanks will be situated to reduce impacts and risks to a nearby (300 meters distant) residential area (PS 4). All immediately surrounding land uses are industrial.