Business

JPS’s big distribution deal

JPS spends US millions to distribute eco energy products to five Caribbean markets

BY STEVEN JACKSON Business Writer jacksons@jamaicaobserver.com

Friday, January 10, 2014    

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LARGE power supplier Jamaica Public Service Company (JPS) will distribute renewable wind and solar solutions from WindStream Technologies following a multimillion-US dollar order.

The move will result in the company distributing these eco-friendly units to Jamaica, Barbados, Trinidad, Grand Cayman and Dominica.

"This renewable energy solution forms part of a broader response to high energy costs which are a direct result of the high cost of oil -- used to generate 95 per cent of the country's electricity. The equipment, which harnesses both wind and solar power to generate energy, complements the other energy efficiency products and services offered through the eStore," stated Winsome Callum, head of corporate communications at JPS, in response to Caribbean Business Report queries.

"While the distribution of power equipment is expected to be a revenue stream for JPS, more importantly, the equipment represents another solution for our customers, and for the country."

WindStream Technologies, a US-based company, began selling its products to the world last June after sorting out a "few remaining technology issues", according to company CEO Dan Bates in his January statement to shareholders.

Its main products include the TurboMill wind powered generator and hybrid wind and solar device, SolarMill. JPS revealed it would sell the hybrid solar mill systems, stand-alone and grid-tied inverters, batteries and battery housing, as well as solar panels.

"JPS is not only purchasing products for its customers in Jamaica but representing our products and making sales all across the Caribbean, including opening new markets in Barbados, Trinidad, Grand Cayman and Dominica," Bates indicated in his statement. "We have already received an initial multimillion-dollar order from JPS, and we believe additional orders and arrangements will follow in 2014."

WindStream's executives include Bates, co-president Claudio Chami, chief scientist Richard Wirz, chief financial officer Ryan Keating, and chief operating officer Travis Campbell.

The wind and solar mills are scaleable, offering low cost per watt usage. The energy potential of each unit is 230 kilowatt hours per year at average windspeeds of five metres per second (roughly 11 miles per hour).

The cost of oil, now hovering at US$100 a barrel, has tripled over the course of a decade. The price hike has made the cost of energy expensive for Jamaica and Caribbean nations using that fuel source.

Last November, JPS secured US$30 million in loans with a possible option for an additional US$15 million from the International Finance Corporation (IFC), the lending arm of the World Bank, in furtherance of its capital needs and its push away from fuel oil.

JPS is owned by Japan-based Marubeni Corporation at 40 per cent; South-Korea-based Korea East-West Power at 40 per cent; the Government of Jamaica at 19.9 per cent; and some 3,000 shareholders holding the remaining 0.1 per cent of the shares.

JPS reported a US$3.4-million net loss for its September quarter 2013 compared with a US$2 million profit a year earlier. The loss was attributed to a US$2-million drop in quarterly revenues to US$280 million and a 24 per cent jump in finance costs to US$14.8 million when compared with year-earlier levels. Despite the drop in profit, JPS ended the quarter with a jump in cash and equivalents at US$12.7 million from US$3.6 million a year earlier due in part to US$24.5 million gained from a preference shares offer recorded in the quarter. JPS has a debt portfolio of some US$400 million with roughly 10 per cent amortised annually.

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