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OUR gives nod for EWI licence

Tuesday, April 01, 2014    

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THE Office of Utilities Regulation (OUR) yesterday gave the green light for Minister of Science, Technology, Energy and Mining Phillip Paulwell to grant a licence to Energy World International Limited (EWI) for the supply of additional generating capacity to the national grid.

In a release yesterday, the OUR said that the licence would be for the supply of 381 megawatts of generating capacity, using natural gas as the fuel source.

"The OUR is satisfied that there is no adverse trace against the applicant, and so the applicant is eligible to hold the licence for which the application has been made," the OUR said yesterday.

The Office of the Contractor General (OCG) had voiced dissatisfaction, from the onset, with the manner in which the OUR had undertaken certain aspects of the bidding process, specifically with regard to the way in which EWI became included in the process.

The OCG, after reviewing the process undertaken by the OUR, had recommended that EWI be excluded from the bidding process on the basis that its bid was submitted subsequent to the expiration of the deadline of March 15.

Director general of the OUR, Albert Gordon, said that the Government's utility regulator has ensured that mechanisms have been put in place, in terms of the Power Purchase Agreement (PPA) and the recommendations for the licence, to safeguard the interest of Jamaican consumers and minimise the implementation risks associated with the project, paving the way for the start-up of the base load capacity project.

"Should the minister issue the licence, this will immediately make the PPA effective and mark the commencement of the 26-month timeline to commission the facilities in 2016," the OUR said.

Under the proposed licence, EWI has to provide a performance bond of US$37 million within 10 days; a fuel supply plan; a fuel supply agreement; a financing plan, detailing credible sources of equity and debt financing, along with the letters of intent/interest from reputable institutions; an implementation plan and schedules, including but not limited to, all the critical activities and milestones relating to the financing, design construction and operation of the facility within days; and, copies of all permits, licences, approvals and other government authorisation required for implementation of the project, the OUR pointed out.

The OUR explained that it had decided to make the recommendation to the minister from March 26, but delayed the move in order to allow "key stakeholders more time to comment on the draft licence".

Yesterday's release stated that comments were received from the OCG, the Energy Monitoring Committee and other interested stakeholders as well as members of the public.

The OCG in a release on March 27 said that it had informed Gordon that it could not and would not, at this stage, support his decision to recommend to the minister the issuance of the licence to EWI for the supply of electricity.

The OCG explained that its concern was based on the view that, while the EWI has provided the OUR with the audited financial statements of its partner EWC in fulfilling the requirements, it was unsure whether EWC could be categorised as EWI's parent company or equity partner, in relation to this matter.

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