IFC, a member of the World Bank Group, with the support of the Government of Canada and along with the Overseas Private Investment Corporation (OPIC, the U.S. Government’s development finance institution) will help BMR Jamaica Wind Ltd. build, operate and maintain a 36.3 MW capacity wind farm about 90 km west of Kingston. This will be the largest renewable energy project developed by the private sector in Jamaica.
“The private sector, with support from long-term lending partners like OPIC, IFC and the government of Canada, is keen to develop Jamaica’s renewable energy potential,” said Bruce Levy, BMR’s Director. “With this initiative we plan to bring cleaner, cost competitive energy to the Jamaican electricity sector.”
The US$62.7 million financing package consists of a $42.7 million senior loan from OPIC, a US$10 million senior loan from IFC’s own account, and a US$10 million loan from the IFC-Canada Climate Change Program, which promotes private sector financing for clean energy projects and will help make the financing package viable.
Jamaica’s dependence on outdated oil-fired electricity generation has led to high electricity prices, which create a burden on the economy. This project is in line with Jamaica’s National Energy Policy, which has set a goal of diversifying the country’s energy matrix.
“Our aim is to reduce the reliance on imported oil and support cleaner, more efficient energy production,” said Jun Zhang, IFC Senior Manager for the Caribbean. “With this project, we hope to demonstrate the viability of the renewable energy sector and open the door to future renewable energy projects by the private sector.”
Caribbean islands generate most of their electricity from imported diesel or heavy fuel oil and devote a hefty portion of their GDP to fuel imports. At the same time, these islands are vulnerable to the environmental impacts associated with fossil-fuels, including air pollution, rising sea levels, and coral bleaching.
“Canada is proud to have made significant investments to support a range of projects to help countries adapt to climate change and increase renewable energy. We will continue to support environmental efforts such as these,” said the Honorable Leona Aglukkaq, Canada’s Minister of the Environment, Minister of the Canadian Northern Economic Development Agency, and Minister of the Arctic Council.
“This wind power project’s impact for Jamaica and the Caribbean renewable energy sector is both promising and pioneering,” said Lynn Tabernacki, OPIC’s Managing Director for Renewable Energy and Sustainable Development. “On an island where importing oil can cost far more than the renewable alternatives, examples like this show that clean power both benefits the environment and can make sound financial sense.”
The wind farm will sell electricity to the private electrical utility, Jamaica Public Service Company, under a 20-year power purchase agreement. The project is expected to become operational in the first half of 2016.
ST Staff Writers
This post was prepared by Solar Thermal Magazine staff.