WASHINGTON, United States (CMC) — Jamaica is the only Caribbean Community (CARICOM) country that will benefit from an Inter-American Development Bank (IDB) multimillion-dollar-funded regional Energy Efficiency Green Bond Facility.
The IDB said that it has approved financing to establish the facility and that the programme was selected to receive up to US$217 million in additional funding as one of eight projects worldwide in the first round of allocations announced by the Green Climate Fund (GCF) earlier this month.
“This private sector programme stands out for its innovative financial approach, involving small and medium enterprises and the potential mobilisation through capital markets of funds from different institutional investors such as pension funds and insurance companies,” said Gema Sacristan, IDB’s Financial Markets Division Chief.
Providing an alternative financing mechanism for energy efficiency projects through the issuance of green asset-backed securities (ABS), the programme will also contribute to the development of capital markets in the region.
The programme will introduce green ABS following the Green Bond Principles standards and will foster socially and environmentally responsible investments.
“The approval of this programme furthers our commitment to supporting Latin American and Caribbean countries in the implementation of their proposed Intended Nationally Determined Contributions (INDCs),” said Amal-Lee Amin, IDB’s Climate Change and Sustainability Division Chief.
“Tapping into domestic capital markets for refinancing of energy efficiency is key for increasing the scale of investment for de-carbonisation over the medium and longer-term.”
IDB said that Mexico will be the first country to implement this programme, followed by the Dominican Republic, Jamaica, and Colombia.
The IDB’s loan of up to US$400 million will be complemented by a loan of up to US$50 million from the China Co-Financing Fund, administered by the IDB, in connection with the first utilisation of the facility in Mexico.
LIGHT AND power providers, the Jamaica Public Service Company (JPS) said yesterday that it is getting independent advice from its lawyers on whether to proceed with a contract with Spanish firm Abengoa to construct its power plant at Old Harbour, St Catherine.
Kelly Tomblin, the chief executive officer of JPS said yesterday that its shareholders held a conference call with Abengoa to discuss the way forward.
Abengoa’s chief executive Santiago Seage resigned yesterday after it emerged the Spanish renewable energy giant was close to bankruptcy.
The JPS, with the assistance of AMEC Foster Wheeler, a consultancy firm, selected Abengoa whose package consists of general electric combined cycle frame 6B gas turbine. The light and power company was in the process of negotiating a performance contract when the matter of the bankruptcy came to light.
“We were never going to enter into a performance contract until we had some assurance about their financial abilities,” Tomblin said.
She said that December 9 was the deadline for Abengoa to satisfy JPS of its ability to undertake the project and hinted that the light and power company is getting ready to move beyond Abengoa.
“Their problem is that they have some debt coming due but they don’t have the cash to pay. They are going to try to utilise their assets and do other things but that takes too long so we won’t be able to wait out that,” Tomblin said.
The Electricity Sector Enterprise Committee, ESET, said that while it is watching the developments, it is not totally concerned at this point.
Profesor Alvin Wint, a member of the ESET, said that in addition to Abengoa, other entities had submitted detailed bids to construct the power plant and they would be in line to be considered to take on the project.
“We will be requiring that they move quickly and if they need to go to a plan B they go quickly,” Wint said.
Both major shareholders of JPS, Marubeni and Korea East West Power Company Limited have committed to each inject up to 50 per cent of the approximately US$990 million equity that is required to develop the 190 megawatt power plant by year end.
The JPS intends to raise approximately US$210 million in debt funding to help finance the project.
The Jamaica Public Service (JPS) yesterday announced that it will be engaging in discussions with other renewable vendors to ensure execution of the planned energy 190 MW Power Plant in Old Harbour, St. Catherine.
Chief Executive Officer, Kelly Tomblin in a press release advised the public that Spanish renewable energy and engineering firm Abengoa has filed for protection from creditors – an initial step towards filing for bankruptcy. The company was recently announced as the preferred bidder to construct the combined-cycle plant in Old Harbour.
“While JPS notes the development with regret, it is fully prepared to activate its alternative plans to ensure the execution of the project, which will replace the present Old Harbour Bay Power Station, while adding more Liquefied Natural Gas to the country’s energy mix,” Tomblin stated.
“We will be having dialogue with Abengoa — but JPS remains undaunted by the news. As a responsible corporate entity, our company has been in full preparation mode for any type of challenge regarding the completion of this project. We will not be derailed from our mission to bring real change to the energy sector and by extension, to Jamaica,” she continued.
The CEO reportedly stated that JPS has been eyeing other vendors since the announcement of the Abengoa’s financial situation.
Abengoa, which reported debt of ¤8.9-billion in its third quarter financials, began bankruptcy protection proceedings to avoid what could be one of Spain’s largest insolvencies.
The figure could be doubled when including ¤2.1 billion in funds it owed to suppliers and ¤5.9 billion of debt the company has in subsidiaries it said could potentially be sold. According to reports, the company has filed for protection from creditors with hopes of reaching a deal on its debts by March.
According to Tomblin, Abengoa was selected based on its wide ranging and impressive technical expertise. The company has been touted as one of the world’s top builders of power lines transporting energy across Latin America and a top engineering and construction business, making massive renewable-energy power plant.
The light and power company also had the understanding that Abengoa’s financiers were committed to the company for the long term.
“JPS wishes to assure its customers and all stakeholders that the 190 MW project remains on track for the plant’s commissioning in 2018.The Company will keep stakeholders informed as events unfold,” she said.
As we approach the fall and winter seasons it is important for solar clients to be aware that they will experience shorter days which means less sunlight. Less sunlight means less solar production for solar systems. So in order to avoid using too much back‐up power which is most likely JPS, it is very important to be conscious of your energy usage during these next few months, even more so with our delayed rainy season upon on us adding cloudiness to limited sun hours.
A solar system produces more energy in the summer months due to the sun being higher in the sky. In these winter months clients need to focus on demand shaping which means to use heavy energy appliances more in the day than night. Using these appliances while the sun is out allows the batteries to be recharged while providing power for equipment. Therefore scheduling activities such as washing, ironing, fridge cooling and electric oven usage during the peak sun period of 10a‐2p is crucial for allowing batteries to receive enough charge for night usage.
Solar owners need to be mindful of ways to maximize the limited electricity generation that comes during this time of year. Clients need to be stingy with consumption. The nights are cooler so a fan might be sufficient instead of the AC or turn the temperature up a couple degrees on the AC unit. Change the most used outside/inside lights to LEDs where possible especially the ones left on for over four hours at a time. Owning a solar system makes you your own power company so it is crucial to plan out energy usage for the family, otherwise as consumption goes up so will the JPS bill. A solar system can only offset what it was designed to offset so if your night time consumption increases then the system will switch to JPS earlier than predicted.
Solar Tips for the shorter sunlight time of year:
Chief Executive Officer
Solar Buzz Jamaica
Although Abengoa, the Spanish company selected as the preferred bidder to build a major power plant in Jamaica, has initiated steps that could lead to a bankruptcy declaration, Jamaica Public Service Company CEO Kelly Tomblin is not yet ready to call it quits on the multinational corporation.
Reacting to news of the bankruptcy proceedings initiated by Abengoa, Tomblin said she was monitoring the situation of the Spanish renewable-energy company.
It was only last week that JPS announced Abengoa as the preferred bidder to build the 190-megawatt combined-cycle plant in Old Harbour, St Catherine.
Despite fears that Abengoa may not be able to fulfil the requirements of the bid, given its precarious financial situation, Tomblin is holding out hope that the company will be able to make good on its financial obligations in relation to the bid.
“We have been monitoring the situation for some time. We have backup plans, but we have to wait and see what Abengoa shows us. But pot can’t call kettle black because JPS, as you know, has had its own financial difficulties, and we are just now emerging from those, so we know what it’s like, so we want to make sure that we don’t overreact,” Tomblin told The Gleaner last evening.
In the event that Abengoa folds completely, Kelly Tomblin pointed out that JPS has several alternatives.
“There are other vendors. We have many vendors who were poised to build the plant, so if, in fact, Abengoa can’t show, then other people can build the power plant. As you know, we have shareholders who have deep expertise, but we don’t want to jump the gun. Of course, Abengoa will have to give us financial assurance, but, again, pot can’t call the kettle black. It wasn’t very long ago that JPS, too, was facing insolvency problems,” she said.
Energy Minister Phillip Paulwell, in reacting to the news, said there was no need to panic and that JPS should be given the space to continue the procurement process.
When asked if the situation vindicates him in respect of the Energy World International (EWI) bid, Paulwell said, “There will be vindication when the gas is here because that, for me, is the most important aspect.”
Paulwell was in charge of overseeing the Government’s 391-megawatt project, which awarded a bid to EWI, a company which faced financial woes, leading to questions about its ability to deliver on the bid. This was before responsibility for the project was handed over to the Vin Lawrence-led enterprise team.
Now, with news of Abengoa’s bankruptcy filing, Jamaica’s renewable-energy plans may be delayed yet again.
Abengoa’s latest financial woes sent shockwaves through the banking sector and financial markets in Spain yesterday, fuelling concerns that the country’s lenders may be left with heavy losses.
According to international media reports, Abengoa has been having financial challenges from as far back as 2013, when Spain instituted energy reforms, which reduced subsidies to renewable-energy providers. This affected Abengoa’s capital base significantly and further exacerbated its pile-up of debt.
The Financial Times has said that a possible default by Abengoa could count as the largest bankruptcy in Spanish history, given that as of September, Abengoa carried gross debt of £8.9 billion.
The filing for preliminary creditor protection yesterday came after a potential investor cancelled plans to inject £350 million into the company.
While he could not comment on questions of whether due diligence was done on the Abengoa bid, Private Sector Organisation of Jamaica CEO Dennis Chung said news of the filing does not mean the company will go under, as bankruptcy proceedings often give a company an opportunity to rebuild.
“I couldn’t comment on due diligence. I have to believe that proper due diligence would have been done, so that question should be put to the person who actually did the due diligence,” Chung said.
* Abengoa has 4 months to reach deal with creditors
* Shares plummet 54 pct, bonds virtually worthless
* Abengoa’s bankruptcy would be Spain’s largest on record (Adds Abengoa removed from Ibex, details on company)
MADRID, Nov 25 Spain’s Abengoa started insolvency proceedings on Wednesday after a potential investor said it would not inject fresh capital into the energy firm, sending its share price tumbling by 54 percent.
Under Spanish law, companies can enter into pre-insolvency proceedings, giving them up to four months to reach an agreement with creditors to avoid a full-blown insolvency process and a potential bankruptcy.
Failure by Abengoa to reach such a deal could lead to Spain’s largest bankruptcy on record. The company employs around 24,000 people worldwide.
Spanish and international banks’ total exposure to Abengoa stands at around 20.2 billion euros ($21.4 billion), including financing for projects, a source familiar with the matter said at the end of September.
The Seville-based engineering and renewable energy firm, which has biofuel and solar-heated power plants in the United States, has been struggling for a year with high debts but the situation became unsustainable in July. It first cut its 2015 targets and stepped up an asset sales plan on July 31, only to announce a share issue days later.
Since then, the company’s market value has tumbled by around 85 percent, hit by uncertainties over whether creditor banks would agree to back the issue.
The shares plummeted by 69 percent when trading resumed following a more than three-hour suspension on Wednesday morning. They closed down 54 percent, wiping out around 470 million euros in market value on the day.
The stock market operator said Abengoa would be removed from Spain’s blue-chip index Ibex as of Nov. 27.
Bonds also lost most of their value.
Abengoa earlier confirmed that Gonvarri, a unit of privately-held industrial group Gestamp, had backed away from a plan to inject around 350 million euros into the firm.
“The company will begin the negotiating process with its creditors with the aim to reach an accord to guarantee the financial viability under the Article 5 of the Bankruptcy act, which the company intends to request as soon as possible,” Abengoa said in a statement.
Abengoa has been trying to find new investors since early August, when it announced a 650 million euro rights issue of new shares to cut gross debt of some 8.9 billion euros.
Gonvarri’s interest was conditional on banks underwriting the issue and it had asked the banks to inject 1.5 billion euros in to the company, sources told Reuters late on Tuesday.
Earlier this month, Abengoa’s auditor Deloitte said the group faced significant risks and its future depended heavily on the proposed investment deal with Gonvarri.
WEST Texas intermediate benchmark pricing for crude was a low of US$42.63 per barrel yesterday and Wall Street analysts continue to predict a further slump into the new year. But the Bank of Jamaica (BOJ) is convinced otherwise.
The bank said in its latest quarterly monetary policy report (QMPR) that prices of international commodities, particularly crude oil, are projected to reflect some modest increases, starting in the December 2015 quarter, contributing to an increase in domestic inflation over the near term; a consequence of gradual improvement in global demand conditions as well as a reduction in shale production by the United States of America.
The BOJ indicates that it expects inflation to pick up in both the December 2015 and March 2016 quarters to end fiscal FY2015/16 within the target range of 5.5 per cent to 7.5 per cent, a forecast mainly based on a projected surge in food and oil prices.
Price declines in electricity and fuel resulted in deflation in energy and transport for the September 2015 quarter, largely reflecting the impact of the reduction in crude oil prices.
Headline inflation at the end of the September quarter fell to 1.8 per cent compared to 4.4 per cent at the end of the preceding quarter.
“The reduction largely reflected declines in the cost associated with energy and transport, while agriculture and processed foods prices increased at a slower pace,” the BOJ stated.
However, the BOJ thinks oil price increases will change the trajectory. It is the bank’s assessment that there will be an uptick in the price of crude oil in the last quarter of the fiscal year.
Additionally, year-end inflation will also be affected by prices of domestic agricultural commodities which the bank expects to increase in December due to the recent dry conditions.
Meanwhile, the bank is also predicting that inflation from agricultural commodities will be reduced in the latter part of the December 2015 quarter as drought conditions improve with concurrent price reversals in the March 2016 quarter.
The Jamaica Public Service Company Limited (JPS) has announced the selection of Spanish firm Abengoa as the preferred bidder to build the 190 megawatt Combined Cycle plant in Old Harbor, St Catherine.
The announcement follows the approval by the Electricity Sector Enterprise Team for the company to start negotiations with US-based New Fortress Energy for the supply of natural gas to the plant.
The JPS says once contracted, Abengoa will be responsible for the design, engineering and construction work on the plant.
It will be built close to company’s existing power station in Old Harbour Bay.
The JPS says it is in the process of procuring the necessary permits for the construction of the plant.
It says as part of its public education, it has shared the Environmental Impact Assessment on its website and will host a public consultation meeting next Tuesday in Old Harbour Bay.
The JPS says the gas terminal and the new gas-fired power plant will allow it to retire 220 megawatts of existing oil-fired steam generation units at Old Harbour and Hunts Bay in 2018.
It says this will ultimately result in a reduction of over 1.2 million barrels of oil per year and allow for power generation below 13 United States cents per kilowatt hours.
Apple will power all its operations in Singapore—including its first retail location in there–with renewable energy. The iPhone maker confirmed to Reuters on Sunday (Nov. 15) that Singapore-based solar developer Sunseap Group will provide it with 100% renewable electricity from solar energy systems built atop more than 800 buildings.
The systems will generate 50 megawatts of solar energy, enough to power the equivalent of 9,000 homes. Apple will receive 33 MW of the new project’s capacity, according to Reuters.
The news is the latest in a string of Apple announcements about renewable energy. In October it announced it would build 200 MW of solar power in China and push suppliers to make similar commitments. That came on top of two previously announced solar farms in the country producing a combined 4 MW of power.
Earlier this year Apple said it was partnering with First Solar to build a massive farm of solar panels to power its upcoming “Campus 2” headquarters in California. The “spaceship campus” will be powered entirely by renewable energy sources, the company has said.
“We’re doing this because it’s right to do,” Tim Cook said at the time to an audience at a Goldman Sachs event. “But you may also be interested to know that it’s good financially to do it.”
In any case, Apple can afford to make investments in renewable energy, however long they take to pay off.
Surprisingly, Apple does not yet have a retail store in Singapore, a major shopping hub in Southeast Asia. The city-state gets hordes of shoppers from nearby countries, especially Indonesia, the world’s fourth most populous nation. This year, Jakarta alone will send Singapore some 1.7 million visitors, who will spend about $2.7 billion, according to the MasterCard 2015 Global Destination Cities Index.
Apple products in Singapore are currently sold through third-party retailers, mobile carriers, and its online store. The company did not disclose the exact location of the upcoming store, but the Straits Times reported last month on a fitness chain moving out of a prime spot on Orchard Road—Singapore’s leafy, mall-lined shopping mecca—to “make way for Singapore’s first Apple store in 2016.”