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Way clear for EWI to get licence

Published:Tuesday | April 1, 2014 | 12:00 AM

DECLARING THAT it has found no "adverse trace" against Energy World International (EWI), the Office of Utilities Regulation (OUR) on March 26 recommended that the company be granted a licence to supply 381 megawatts of generating capacity to the national grid.

This means that way is now clear for Science, Technology, Energy and Mining Minister Phillip Paulwell to grant a licence to EWI.

Paulwell, who is attending an energy conference in St Lucia, told The Gleaner he would address the matter on his return to the island today.

In a news release yesterday, the OUR said EWI was eligible to hold the licence for which the application has been made.

Albert Gordon, director general of the regulatory body, said the OUR had ensured that mechanisms had been put in place in the power purchase agreement (PPA) and the recommendations for the licence to safeguard the interest of Jamaican consumers and minimise the implementation risks associated with the project.

"Should the minister issue the licence, this will immediately make the PPA effective and mark the commencement of the 26-month timeline to commission the facilities in 2016," the OUR added.

The regulatory body said it had delayed its decision to make the recommendation in order to allow key stakeholders more time to comment on the draft licence.

Comments were received from the Office of the Contractor General, the Energy Monitoring Committee, other interested stakeholders, and members of the public.

"In keeping with established practice, the OUR assessed the application for fit-and-proper characteristics and also examined it with respect to technical, legal and financial considerations," the OUR pointed out.

Our review process

Outlining the process which led to its recommendation, the OUR said it reviewed the operations proposed by EWI to satisfy itself as to whether it would meet the needs of the public and attain certain critical efficiency benchmarks.

In evaluating the potential effects of the applicant's operations on the public, the OUR considered, among other things: the PPA dated January 24, 2014 between EWI and the Jamaica Public Service Company Limited, and the due diligence report dated December 24, 2013 supplied by the Revenue Protection Division of the Ministry of Finance and Planning.

Last week, a powerful private-sector lobby threw its weight behind the joint public-private oversight Energy Monitoring Committee in cautioning the Government not to rush into issuing a licence to EWI.

In a release last week, the Office of the Contractor General, while reiterating its previously stated concerns about EWI's bid, said it had urged the OUR to consider the establishment of an agreement between itself and EWI for an extension of the bid-validity period and await the provision of the EWI's audited financial statements.

Under the proposed licence, the company has to provide certain information, including the following:

A performance bond of US$37 million within 10 days;

A fuel supply plan;

fuel supply agreement;

A financing plan detailing credible sources of equity and debt financing along with the letters of intent/interest from reputable institutions;

An implementation plan and schedules, including, but not limited to, all the critical activities and milestones relating to the financing, design construction and operation of the facility within days; and

Copies of all permits, licences, approvals and other government authorisation required for implementation of the project.