CABINET HAS approved the award of a US$1.66 million contract to provide investment and financial advisory services for the Government's National Energy Diversification Strategy.
Information Minister Burchell Whiteman announced the move, which will seek to determine the cost-effectiveness of importing Liquified Natural Gas (LNG) as an energy substitute, during Monday's post-Cabinet press briefing at Jamaica House.
Phase I of the three-phased contract which will be handed out by the Energy Policy Unit in the Office of the Prime Minister, to business consultants Taylor Dejongh will commence without any obliga-tion to perform Phase II and III which will together cost US$300,000.
The first phase will cost US$184,000 and the contract will carry a success fee of US$1.175 million. The latter fee will only be made payable if there is a successful financial close for the project at the end of Phase II.
Minister Whiteman noted that the United States Agency for Interna-tional Development (USAID) has committed to a grant of US$235,000 to support the LNG initiative. "Of this, US$90,000 is available to be used for costs in respect of the financial advisory services," he said.
The Petroleum Corporation of Jamaica (PCJ) has also agreed to fund the Phase I expenses in excess of the amount provided by USAID.
"It is expected that Phases II and III will only proceed if private sector investors in the LNG project are identified and who will be willing to assist in underwriting these costs of the financial advisory services," the Information Minister said.
He added: "As the success fee is only payable on the financial close it is expected that this would be paid out of the financing proceeds and thus would not have to be paid directly by any Government of Jamaica entity."
