Just as Jamaica’s rating in the World Bank’s bi-annual global logistics ranking, the government has announced that financial closure has now been attained for the concession agreement between the Port Authority of Jamaica and Kingston Freeport Terminal Ltd (KFTL).

Prime Minister Andrew Holness made the announcement during a press conference held at Jamaica House on Friday.

“The upfront and other fees required under the terms of the Concession Agreement were paid over to the PAJ on June 30, 2016, thus allowing for the transfer of the Kingston Container Terminal to the concessionaire. Kingston Freeport Terminal Limited therefore assumes operations of the Kingston Container Terminal effective today, July 1st, 2016,” said the prime minister, according to a Jamaica Information Service news release.

“This development is timely, coming on the heels of the opening of the expanded Panama Canal,” Holness said.

The news comes at a time when Jamaica has plunged in its global logistics ranking according to an index created by the World Bank. It was reported last week that Jamaica now ranks at 119 out of 180 countries for its logistics readiness, compared to 70 in the last publication of the index in 2014.

KFTL is a local company established by the Terminal Link/CMA CGM Consortium for the sole purpose of acting as the signatory to the KCT Concession.

The KCT Concession is an agreement between PAJ and KFTL for the financing, development and expansion of Jamaica’s main transshipment port, the Kingston Container Terminal.

The agreement gives KFTL a 30-year term concession with the right to finance, expand, operate, maintain and transfer the Kingston Container Terminal at the end of the concession period.

KFTL has secured the funding required for the Phase 1 Capital Works. The concessionaire and lenders have signed the loan agreements and are working to complete all conditions precedent to disbursement.

All 834 employees of the KCT were made redundant and redundancy payments made, also on June 30, 2016. The concessionaire has since offered employment to most KCT employees as well as to additional technical staff who were previously employed by the Shipping Association of Jamaica.

In saluting the former employees, the prime minister thanked them for their contribution to the development of the terminal.

“I encourage them to take advantage of the new opportunities to become world leaders and in the process creating new prosperity for themselves, their families and for our country,” he said.

IDB Financing

Meanwhile, the Inter-American Investment Corporation (IIC), acting on behalf of the Inter-American Development Bank (IDB) Group, has signed a US$265 million financing package with Kingston Freeport Terminal Ltd, according to an IDB news release.

The project will optimise and expand Kingston’s container terminal capacity in Jamaica, as the port must stay competitive to handle larger ships now passing through the expanded Panama Canal.

The upgraded terminal will soon manage increased vessel volume, expanding capacity from 2.8 to 3.2 million Twenty-Foot Equivalent Units (TEUs) per year within the next six years, the IDB said.

The project will contribute to strengthen Jamaican’s relevancy in global trade and foster private sector activity and foreign direct investment, the IDB said..

The financing includes a US$205 million IDB loan, comprised of an A-loan of US$94 million and B-loans of US$111 million from Cordiant, FMO, CIBC First Caribbean and CIFI.

The package also includes co-loans from Proparco and DEG for US$30 million each.

The loans offer a tenor of up to 15 years.

Total project cost is US$452 million, and it is the largest infrastructure project funded by the IIC in Jamaica. In addition to long-term financing, the IIC provided assessments to optimise dredging and mitigation measures with the aim of protecting local biodiversity and cultural heritage.

The IIC, a member of the Inter-American Development Bank (IDB) Group, is a multilateral development bank committed to supporting the private sector in Latin America and the Caribbean. The IIC finances sustainable enterprises and projects to achieve financial results that maximise social and environmental development for the region.

With a current portfolio of US$7 billion under management and 330 clients in 20 countries, the IIC works across sectors to provide innovative financial solutions and advisory services that meet the evolving demands of its clients.