—Economy to Benefit from Fast Track and Reliable Power Supply—
WASHINGTON, D.C., Aug. 6—The International Finance Corporation (IFC) announced the completion of a US$48 million syndication, part of a financing package, for a 72-megawatt (MW) barge-mounted power plant, "Doctor Bird," near Kingston, Jamaica. The US$102.7 million facility at Old Harbour Bay was developed by Wartsila NSD Power Development, Inc. (WNSPD) as a fast track project under a 20- year power purchase agreement signed, October 1994, by Jamaica Energy Partners (JEP) and the government of Jamaica.
The project sells its output to the national utility, Jamaica Public Services Company (JPS). Fuel is supplied under a 21-year agreement by Petrojam Limited, a Jamaican company. Doctor Bird began commercial operations in October 1995, alleviating energy shortages caused by the loss of capacity from a June 1994 explosion of two generating units owned by JPS.
Doctor Bird is Jamaica's first independent power project and has facilitated the development of a private power market. Mr. Vivek Talvadkar, Director of IFC's Power Department said, "Our experience in financing private power projects around the world has shown that efficiency gains are obtained through private sector operation of public sector utilities. Well-structured power projects can attract considerable long-term development capital to a sector requiring substantial investments. We expect this will be the first of a series of private investments in Jamaica's infrastructure."
IFC's total financing package of US$72 million consists of a loan for its own account of US$22 million, an equity investment of US$2 million and a syndicated loan of US$48 million. The co-underwriters of the syndicated loan are Merita Bank of Finland and ING Bank of the Netherlands. The sub-participants are Dresdner Bank AG, Berliner Bank AG, Sumitomo Bank, Bank of Scotland and FinFund. The remainder of the financing consists of US$9.6 million in the form of subordinated debt from McDonnell Douglas and approximately US$17 million in the form of equity from Scudder Latin America Trust for Independent Power, Illinova Generating Company, Continental Energy Services, WNSPD and IFC.
WNSPD is a subsidiary of Wartsila NSD Corporation, the world's leading designer and manufacturer of heavy diesel engines for power generation. Scudder Latin American Trust for Independent Power was formed by the investment management firm of Scudder, Stevens and Clark, Inc. to make equity investments in independent power projects in Latin America and the Caribbean. Illinova Generating Company, an independent power investor, is a subsidiary of Illinois Power. Continental Energy Services, also an independent power investor, is a subsidiary of Montana Power.
IFC is the largest multilateral source of equity and loan financing for private sector projects in developing countries. To date, IFC has invested approximately US$900 million in 16 power projects in Latin America and the Caribbean, including about US$400 million for IFC's own account and approximately US$500 for the account of participants.
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