The Jamaica Public Service Company Ltd (JPS), in collaboration with the South Jamaica Power Company Ltd (SJPC), broke ground on Friday for the high-profile liquefied natural gas (LNG)-powered Old Harbour Independent Power Plant (IPP) to be erected in St Catherine.

The project, funded by syndicated loan and bond facilities, represents the largest financing project of its kind with a dollar value of more than US$330 million. The large-scale project resulted in a funding partnership between local and regional financial institutions, making it a significant milestone in the local investment landscape.

The NCB Group was selected lead arranger by JPS and its subsidiary SJPC to identify and structure the most efficient financing model for the power plant. The TSK Group has been contracted to carry out construction.

According to NCB, the chosen financing structure is expected to offer the highest levels of economic value to JPS by allocating bonds and term loans with durations of 15 and 12 years respectively.

The structure also provides JPS with cash flow relief during construction and initial years of operation of the plant by delaying payments on principal during the earlier years of the facilities.

Following an assessment of this ‘Green-field Investment’ project, which is reliant on large amounts of capital, NCB saw the viability of the initiative in the early stages and was confident of its potential for long-term positive economic impact. The bank also funded New Fortress Energy (NFE), the entity that brought LNG to Jamaica’s shores,

“We came on board as we recognise the value the project will bring to further developing the region’s financial markets. It demonstrates to multilateral lending agencies and international finance houses NCB’s capacity to lead the financing of capital-intensive initiatives across the Caribbean. Also, it is important to us that JPS and its major shareholders, Marubeni Corporation and Korea East West Power, after shopping around the financial markets around the world for the most attractive financing deal to build this new power plant facility, chose NCB. We accepted and today, as their financial partner, we delivered,” explained Brian Boothe, general manager, corporate banking division at NCB.

Back in 2004, the NCB Group also provided the strategic loan solution for the then Government of Jamaica’s move to bring wind energy to the island and diversify energy production. The introduction of LNG takes place in similar faith, aiming for benefits that trickle down to private consumers. This step furthers the vision for economic development, improving efforts to lift the standard of living while making the region an even more attractive destination for inward investment.

“NCB stands ready to work hand in hand with entrepreneurs on initiatives that will have a positive contribution to nation-building. From the sole trader with micro-financing needs; to SMEs requiring working capital; to multinational corporations with complex banking needs facilitating their operations across the region and around the world; as well as governments requiring major funding for infrastructure development projects, we have the capacity and skills to get it done,” Boothe said.

Jamaica, though not fully dependent on LNG, affirms its place in the ranks of Poland, Egypt, Jordan and, most recently, Pakistan, in the use of LNG in electricity production to fuel national energy transformation.