JAMAICA’S utility companies are being urged to turn more aggressively to capital markets to finance climate resilience and infrastructure upgrades, as rising storm damage and global energy risks expose the limits of existing funding models.

Speaking at the Office of Utilities Regulation’s 12th annual Director General’s Stakeholder Engagement, titled ‘Utility resilience, innovation, and readiness for extreme events’, held at the Jamaica Pegasus hotel on Thursday, Jamaica Stock Exchange (JSE) Chief Executive Livingstone Morrison called on utility operators to bring projects to investors through structured financing instruments such as bonds, insurance products, and infrastructure funds.

“Engage the capital markets. Bring your grid hardening plans and your renewable integration projects to market,” Morrison told the utilities in attendance. “Capital is available. The institutional appetite is there. What is missing is a pipeline of well-governed, investment-ready projects.”

However, acting President of the National Water Commission (NWC) Kevin Kerr pushed back on the notion that a lack of investment-ready projects is the main constraint, arguing that utilities have long struggled with the realities of financing infrastructure that does not deliver quick returns.

“I don’t believe that this is so,” Kerr said. “More than 10 years ago, NWC commenced the procurement process for major water projects with the intention of using local financing and PPP arrangements, but that did not materialise as planned.”

He said the economics of water infrastructure remain a key challenge.

“Water projects don’t give returns tomorrow morning — they provide and ensure future water security,” Kerr said, noting that while such investments are critical, they are not always aligned with the expectations of capital markets.

The broader call for reform comes against the backdrop of Hurricane Melissa, which left roughly 77 per cent of Jamaica Public Service (JPS) customers without electricity and resulted in an estimated US$350-million restoration bill for the grid — much of which had to be financed after the event, including a US$150-million loan from the Government.

While the Government itself was able to access more than $600 million in rapid funding through pre-arranged disaster financing mechanisms, no equivalent system exists at scale for utilities, forcing them to rely on loans, internal resources, and emergency arrangements negotiated under pressure.

That imbalance, Morrison argued, highlights the need for utilities to secure financing before disasters strike, rather than after.

Among the options outlined were parametric insurance policies, which can deliver payouts within days based on predefined storm triggers and expanded use of infrastructure bonds and catastrophe-linked instruments to fund both recovery and long-term upgrades.

Jamaica’s electricity disaster fund, currently valued at about $50 million, was also flagged as insufficient given the scale of recent storm damage, pointing to the need for a more robust and market-supported financing structure.

Morrison said institutional investors could play a central role in closing that gap, noting that Jamaica’s pension funds — with assets exceeding $700 billion — represent a significant pool of long-term capital seeking stable returns.

“Resilient utility infrastructure, financed through grid bonds, catastrophe bonds, and infrastructure funds offers long-term, risk-adjusted returns where capital is required,” he argued.

The push for greater capital market involvement comes as Jamaica accelerates its transition to renewable energy, with a target of 50 per cent generation by 2030, a shift Morrison argued is closely tied to resilience.

“Every megawatt of renewable energy brought on line is a megawatt that does not depend on imported fuel,” he said, pointing to distributed solar and battery systems as critical in maintaining power during grid disruptions.

At the same time, rising global energy risks — including disruptions in Middle East oil supply — are increasing pressure on import-dependent economies such as Jamaica, reinforcing the urgency of building more resilient and self-sufficient energy systems.

Morrison also pointed to the need for long-term financing solutions to modernise infrastructure, including selective undergrounding of electricity networks in critical areas such as hospitals, commercial centres, and tourism corridors.

While underground systems can cost significantly more than overhead lines, he argued that such investments can be financed over extended periods using institutional capital rather than through short-term rate increases.

He also called on regulators to strengthen the framework for resilience financing, including requiring utilities to maintain disaster financing plans and adequate insurance coverage aligned with the risks they face.

“When a single storm can disrupt infrastructure, the economy, and the financial system at once, the case for pre-arranged financing is no longer theoretical,” Morrison said. “It is essential.”

Market call: Jamaica Stock Exchange CEO Livingstone Morrison is urging utilities to tap capital markets to finance climate resilience and infrastructure upgrades.