The Capital Infrastructure Group Limited (CIG) has received its first capital injection from its key shareholders as it embarks on its first project valued at US$77 million ($11.9 billion) through Rio Cobre Water Limited (RCW).

According to the newly released financials of NCB Financial Group Limited (NCBFG), its subsidiaries directly injected approximately $2.35 billion into its associate companies during the 2024 financial year, with CIG being the latest associate to be reported by the financial conglomerate. NCB Capital Markets Limited (NCBCM), a subsidiary of NCBFG, has been reported to hold about 76 per cent of the ordinary shares of CIG which had $4.60 billion in assets and $3.33 billion in shareholders equity as at September 30. Although this associate company is relatively new, it was reported that CIG generated $209.26 million in revenue during the 2024 reporting period while producing $65.81 million in net profit. NCBFG’s stake in the entity is valued at $2.53 billion.

CIG was formed as a Barbadian joint venture vehicle in May 2021 between Eppley Limited, Jamaica Producers Group Limited and NCBCM to invest in different infrastructure projects across the Caribbean. CIG itself will be managed by a Barbadian fund manager called Capital Infrastructure Managers Limited (CIML) which is co-owned and co-managed by Eppley and Pan Jamaica Group Limited, who are the current direct owners of the common shares.

JP Group’s 2022 audited financials revealed that it had entered into a share subscription agreement with CIG to purchase 2,400 common shares valued at US$2.4 million and 11,000 preference shares valued at US$11,000. Those financials also noted that JP Group was asked to make payments of US$612,000 by January 2023 on the common shares.

While there was a period of relative lull on CIG, new light has emerged on the activities of the infrastructure vehicle as it was revealed on December 16 that Rio Cobre Water has finalised its financing arrangements with its various lending partners. Rio Cobre Water will design, build, finance, operate a 15-million gallon per day water treatment plant in Content District, St. Catherine under a 25-year concession with the National Water Commission (NWC) through a public-private partnership (PPP) agreement. The water treatment and storage plant will provide potable water to residents of St. Catherine, Kingston and St. Andrew.

IDB Invest and Proparco Groupe AFD (French Development Finance Institution) will lend US$30 million each to RCW while Sagicor Bank Jamaica Limited (SBJ) and the Development Bank of Jamaica (DBJ) will provide RCW with up to $12 billion in long-term secured financing, with an extended repayment period of up to 20 years, a move which will ensure affordable water tariffs for Jamaicans. The water treatment plant is set to be constructed over the next two years.

“The Rio Cobre Water Treatment Plant will improve access to reliable potable water for communities in the Kingston Metropolitan Area and parts of St. Catherine. The project will address growing demand, enhance water reliability, and strengthen the country’s resilience to climate change, significantly benefiting over 600,000 Jamaicans through the daily supply of 15 million imperial gallons of water. During the signing ceremony in Kingston, the Hon. Matthew Samuda, Minister without Portfolio in the Ministry of Economic Growth and Job Creation, was present alongside key representatives from the National Water Commission,” stated the IDB release.

According to Proparco, it will rely on The Currency Exchange Fund N.V (“TCX”) to provide a non-deliverable USD/JMD cross-currency swap with a 20-year maturity to remove the currency risk from its investment. The TCX is a global development financing initiative which has been used since 2007 to de-risk about US$16 billion across more than 5,000 development financing transactions.

CIG formed Rio Cobre Water in partnership with Vinci Construction Grans Projets SAS in October 2021. Rio Cobre Water will own the water treatment plant for 23 years, with an option for extension by another five years before ownership is transferred to the NWC.

Rio Cobre Water received a permit from the National Environmental and Planning Agency (NEPA) in July 2023 which will last for five years. RCW also received a license related to trade effluent which will be treated at the water treatment plant before it is sent to a pond and then discharged to a drain which will lead to the Rio Cobre River. This license is also valid for five years.

While Vinci has been involved in several infrastructure projects in Jamaica for several years, NCBCM, Eppley and Pan Jamaica having been stepping up their infrastructure related investments in the last five years.

NCBCM along with Paynter (Jamaica) Limited, a subsidiary of Eppley, co-manage the Caribbean Mezzanine Fund II under Stratus Alternative Funds SCC. CMF II has grown its portfolio to over US$40 million in net assets and had undertaken the Pelican Power Project which is a gas-fired power plant that provides electricity to UWI.

While NCBCM’s board has decided to wind up two of the four Stratus funds that it solely managed, it has continued to remain active with other projects such as the being a 22 per cent owner in the Boundbrook Urban Centre Limited which will develop a 148,000 square foot centre in Port Antonio, St. Thomas valued at $4.2 billion. NCBCM and other NCBFG funds are also large owners in TransJamaican Highway Limited, operators of Highway 2000 East West.

Eppley has instead moved to increase its interest in the cellular shares of the two funds under Eppley Caribbean Property Fund Limited SCC. Eppley Fund Managers Limited spent BDS$14.40 million ($1.14 billion) in September to bring Eppley’s collective interest in the Value Fund to 20.09 per cent while it spent BDS$5.11 million ($388.39 million in April 2027 to bring its stake in the Development Fund to 47.20 per cent. Eppley has since consolidated both funds to increase its asset base from $7.04 billion at the start of 2024 to $20.61 billion at the end of September. That also resulted in its consolidated equity increasing by 420 per cent from $2.12 billion to $11.03 billion, with equity attributable to shareholders moving from $1.38 billion to $2.10 billion. The consolidation of the Value Fund also resulted in Eppley Limited benefiting from a one-time gain of $676.05 million to bring its nine months consolidated net profit to $1.41 billion, a substantial rise above the $442.84 million in the prior period which also had a $229.59 million one-time gain.

Pan Jamaica Group’s property and infrastructure segment also saw external revenue rise by eight per cent over the nine months to $3.10 billion with profit before tax improving 16 per cent to $1.04 billion.