JPS takes bigger stake in South Jamaica Power
Power utility Jamaica Public Service Company JPS, more than doubled its stake in the joint venture handling construction of its power plant in Old Harbour, in order to meet state requirements.
Under a US$16-million transaction, JPS increased its holding in South Jamaica Power Company Limited (SJPC) from 20 per cent to 49.8 per cent as at December 2017, and plans to take an even larger position in the company going forward.
The move conforms with a directive from the Generation Procurement Entity previously known as the Electricity Sector Enterprise Team, or ESET that JPS own more than 50 per cent of the shares in the company handling the development of the 290MW power plant in Old Harbour, JPS told the Financial Gleaner. South Jamaica Power is the vehicle being used for the purpose.
"JPS will continue to invest in SJPC such that at the end of construction, the company will own more than 50 per cent of the shares in SJPC," said Audrey Williams, media and public relations manager at JPS.
The remit of the Generation Procurement Entity includes managing the replacement of existing electricity generation capacity and the procurement of new capacity. It replaced ESET when that unit fulfilled its mandate to facilitate the urgent replacement of baseload electricity generation capacity with lower cost-fuel sources.
In order to effect the increase of its holdings in SJPC, the power distributor incorporated a new subsidiary called South Jamaica Energy Holdings Limited (SJEH),to primarily act as a holding of investments. Consequently, the company transferred its interest in SJPC to its fully owned subsidiary, SJEH.
To effect the transaction, JPS explained that there was an exchange of funds of US$16 million, which represented the capital injections made during the year. These funds were provided by JPS to SJEH and will be converted to equity, which will be held by JPS.
The remaining shareholders in SJPC are JPS's co-parents Marubeni Corporation and Korea East West Power, which each own 20.1 per cent; and the PetroCaribe Development Fund, which holds the other 10 per cent.