Armorview-Tank Weld gets J$6b backing from local investors
A Jamaican consortium comprising Musson Jamaica and Tank Weld Group this week revealed that it would harness more than US$60 million (J$5.94b) from local investors to partly finance its proposed liquefied gas power plant.
Overseas partner Wartsila will also provide the plant technology, as well as unspecified equity backing for the project.
"The Armorview-Tank Weld team has already mobilised equity investors, including Wartsila and a Jamaican investment group slated to put up project equity in excess of US$60 million," said the partners in a media release. The local backers were not disclosed.
The Armorview-Tank Weld partnership includes Tank Weld, a construction company and Armorview Holdings, a joint venture between Musson Jamaica, a trading company, and energy expert Nigel Davy.
The group aims to construct a 360-megawatt power plant in order to lower the cost of energy as part of the Government's mandate to slash energy costs by one-third.
"We are confident that the project will yield significant benefits to the Jamaican economy and environment, including low cost of energy, job creation, improvement in the balance of payments and the resultant growth in the island's GDP," said Chris Bicknell, Group CEO of Tank Weld in the release.
This project can reduce the country's balance of payments by more than US$300 million per year, through savings in fuel costs as a result of greater efficiency, he said.
The project, if approved, anticipates employing 3,000 workers during the 18-24 month construction period.
"In addition, there will be a significant transfer of knowledge from the experts at Wartsila to Jamaicans, who will be providing operations and maintenance services for both plants over a defined period. We are also confident that through on-the-job training, at least 180 Jamaicans will become highly skilled in the energy sector, in keeping with our requirements and those of the OUR," Bicknell said.
Four entities submitted bids to the Office of Utilities Regulation for the right to supply 360 megawatts of power to the national grid. The invitation for proposals was issued in February and closed in March. The most prominent bidder is that of Marubeni/Korean East West Power, the majority owners of Jamaica Public Service Company (JPS), the island's largest power provider.
According to energy expert Nigel Davy, the proposal is for two plants to be constructed at different sites - one with 240-megawatt capacity and the other 120 megawatts, both of which will feature Wartsila Flexicycle tri-fueled engines designed to burn either - or in combination - natural gas, heavy fuel oil and diesel oil.
"Our plants will also reduce the island's carbon footprint by in excess of 700,000 tons of carbon dioxide equivalent, CO2E, with the removal of older and inefficient equipment," said Davy. "Since our project can efficiently burn gas or heavy fuel oil, we can commence construction now and pass on immediate savings to the consumer, then as soon as LNG arrives we can pass on more savings," he said.
Wartsila, based in Finland, is a €4.7-billion corporation by sales with operations spanning 70 countries. It is already publicly touting its technology to be used in the Armorview-Tank Weld project, saying in press advertisements that its multifuel Flexicycle plant has been ranked number one under the reviews done by OUR and engineering consultant form Mott MacDonald.
The current round of bids is OUR's second effort at getting the 360MW plant developed, after ending negotiations with preferred bidder JPS earlier this year.
JPS then estimated that it would cost US$614 million to develop the LNG plant.