Tue | Oct 20, 2020

GK invests in UWI power plant

Published:Wednesday | December 4, 2019 | 12:05 AM
Steven Whittingham, chief investment officer for GraceKennedy.
Steven Whittingham, chief investment officer for GraceKennedy.

GK Investments has taken a 50 per cent stake in Pelican Power Limited, the company that owns the gas-fired power plant that provides electricity to the Mona campus of The University of the West Indies, UWI Mona, in Kingston.

The seven-megawatt plant, which can either be fired by liquified natural gas or liquid petroleum gas, was developed at a cost of over US$10 million, the financing for which was structured two years ago by GK Investments Limited, and comprised a mix of debt and equity, said GraceKennedy’s Chief Investment Officer, Steven Whittingham.

The plant was originally developed by UWI through Mona-Tech Engineering Services Limited, but is now held by Pelican. UWI continues to operate the plant under lease from Pelican Power, which is now jointly owned by GK Investments, GKI, and the Caribbean Mezzanine Fund.

Pelican Power was incorporated in September 2018. The deal under which GK Investments has bought into the power company was struck in July as a joint-venture agreement, and is valued at $178.323 million, Whittingham said. The transaction was first disclosed in parent company GraceKennedy Limited’s recent earnings report for the September quarter.

Eppley Managing Director Nicholas Scott confirmed that Caribbean Mezzanine – an equity fund that Eppley Limited co-owns with NCB Capital Markets Limited – is the other partner in Pelican.

The electricity generated by the plant will supply the UWI Mona campus only. It will make the campus independent of the national grid operated by Jamaica Public Service Company, the savings from which are projected at $300 million per year.

Whittingham did not disclose the terms of the Pelican lease to UWI, saying only that it was long-term and GKI intends to participate in the investment until maturity.

The plant is being supplied with LNG by New Fortress Energy.