Sat | Feb 17, 2018

Jamaica Private Power Company changes ownership

Published:Friday | January 5, 2018 | 12:00 AMAvia Collinder
Ingrid Christian-Baker, general manager of Jamaica Private Power Company.

 

Jamaica Private Power Company, JPPC, has a new owner with the announced sale of the Latin American and Caribbean businesses of Inkia Energy Limited to I Squared Capital, an infrastructure private equity firm.

Inkia is a wholly owned subsidiary of IC Power Limited.

The sale was announced by Kenon Holdings, whose spokesman told the Financial Gleaner that Inkia is an indirect subsidiary of Kenon, but otherwise noted that any further details should be gleaned from the company's filings with the US Securities and Exchange Commission.

JPPC is changing ownership for the second time in four years. In June 2014, AEI Power Limited sold its stake in the Jamaican operation to minority partner IC Power, an international subsidiary of Israel Corporation Group.

With that transaction, IC Power increased its holdings in JPPC from 15.5 per cent to 100 per cent.

On its website, JPPC indicates its 60MW of capacity represents approximately 6 per cent of the total Jamaican interconnected system. The company owns and operates two diesel generation units, burning HFO, and a combined-cycle steam turbine. At last report, JPPC generated 445 GWh of energy, representing 11 per cent of the Jamaican interconnected system's energy requirements in 2015.

The company, headed by General Manager Ingrid Christian-Baker, recently extended its power purchase agreement with operator of the national grid, Jamaica Public Service Company, for seven years to December 2024. Typically, such agreements tend to have a life of two-decades, but the JPPC extension aligned the expiration of the contract with the end date of JPPC's 30-year generation licence, which was issued back in 1994.

Christian-Baker did not respond to requests for comment on JPPC's ownership change.

Buyer I Squared Capital, which is based in New York, was reportedly founded by former bankers at Morgan Stanley.

The release issued by Kenon said the sale is expected to generate proceeds of approximately US$1.33 billion - comprising US$1.11 billion paid by the buyer, plus retained cash at Inkia of US$222 million.

Kenon intends to use some of the proceeds to repay IC Power's debt - US$43 million; and repay its loan facility with Israel Corporation US$240 million.

Kenon will assume the remaining proceeds, which are estimated at US$619 million after expenses, debt repayments and taxes.

avia.collinder@gleanerjm.com