Fri | Jan 19, 2018

JPS gets US$100 million loan for efficiency upgrades

Published:Friday | December 23, 2016 | 12:00 AMSteven Jackson
The headquarters of JPS is seen at right at the entrance to the New Kingston business district. JPS is one of the primary partners in the initiative to transform New Kingston into a 'smart city'.
President & CEO of JPS, Kelly Tomblin.

The Jamaica Public Service Company Limited (JPS), the island's sole distributor of electricity, has been granted approval for a US$100-million (J$12.85-billion) loan aimed at financing measures to curtail energy losses and theft from the utility company.

The project will include normalising 31,000 illegal connections and converting all the island's street lights to efficient LED bulbs.

It is part of an overall US$133-million (J$17.09-billion) ambitious project by the utility provider.

"The project starts in January and a lot of RFP (request for proposal) work went into it this year," stated Kelly Tomblin, president and chief executive officer of JPS, in an interview with the Financial Gleaner on Wednesday. The project will last for three years and, according to her, "bills should be going down by about 20 per cent when they are in. But the [final figure] depends on fuel prices."

The Government, through its municipal councils, are billed for street lights, which, at times, remain as receivables to the tune of billions of dollars on the books of JPS.

JPS will use the proceeds of the loan to implement a smart street light programme, connect new customers, support the reduction of electricity theft, rehabilitate and upgrade its transmission and distribution network and refinance an existing debt facility with Citibank NA.

"We will finalise the selection of the vendor(s) for LED street lights this year, but may need to do some more evaluation on the smart controller," Tomblin said.

Currently, there are two shortlisted vendors for installations, three vendors for LED street light fixtures, and three vendors for the smart controller management system. She added that the procurement team is presently in commercial negotiations with the vendors. All shortlisted vendors made presentation to a diverse JPS team, government officials and technocrats.

"Our review on the controllers and management system is that they are undergoing several upgrades as we speak, with timelines for first-quarter 2017. We are also doing further field evaluation as part of the New Kingston pilot, which we will complete next week," she said.

The Overseas Private Investment Corporation (OPIC), the United States equivalent of Jamaica's Ex-Im Bank, will lend JPS' the funds, with Citibank as the JPS banking sponsor. The loan tenure is for 10 years. OPIC indicates that the project should improve the quality and supply of electricity in the island.

Jamaica ranks 79th out of 140 countries in terms of the quality of its electricity supply, according to the World Economic Forum's Global Competitiveness Report.

"The project, through its various programmes, plans to strengthen existing connections and legitimise and safeguard illegal connections," stated an OPIC assessment. It added that in 2015, grid losses amounted to an estimated 27 per cent of energy, with approximately 18 per cent the result of theft or illegal connections.

"The project expects to convert approximately 31,000 illicit connections to legitimate paying customers, which will be done through a community engagement programme," OPIC said. In addition, the grid will widen to connect 3,800 new customers to the roughly 500,000 existing customer base. "The project will also include a Smart LED street light replacement programme, that will result in the reduction of street light energy use by an estimated 65 per cent," it said.