Aug 2008 Financial News

Banks, PetroCaribe funding US$50m Wigton project

Aug 20, 2008

The near-US$50 million ($3.6 billion) that the Petroleum Corporation of Jamaica (PCJ) is spending to expand the Wigton Windfarm is to be financed by debt, a small portion of which will be tapped from the PetroCaribe Fund.

Yesterday, the PCJ announced it would begin the expansion project in September to add nine wind turbines to the 23 installed on the four-year-old, 683-acre farm in Manchester, confirming a Wednesday Business story carried in June.

The US$5.4 million funding to kickstart work on the wind project is in the form of a bridging loan from the oil facility, which is repayable in six months to a year, according to Sharon Webber of the PetroCaribe Fund.

PCJ has also tapped the banks - among them National Commercial Bank of Jamaica and FirstGlobal Bank - for com-mercial credit, but held comment on how the loans were structured.

The energy agency opted to take on the project after failed attempts to bring private equity partners on board.

Added power

PCJ projects that the wind project will add 55 million kilowatts of electricity to the national power grid annually and reduce the petroleum import bill by US$3.2 million.

The nine turbines originating from Denmark will be supplied by Vestas Wind Systems, a company operating out of Argentina, and will add 18 megawatts (MW) of generating capacity to the 20.7 MW already installed at Wigton.

The US$49.9 million investment is split US$35.5 million for the equipment and US$14.4 million to construct the substation and install an electrical cabling system.

PCJ group managing director Ruth Potopsingh. said the project would last one year and the new equipment commis-sioned by 2010.

A wind mapping project by the PCJ is already showing Portland, St Thomas, St Elizabeth and Manchester as the best wind swept locales.

Wigton's first phase was a US$6.7 million project.

Steel price increases

Potopsingh said wind projects were more expensive now largely because of the increases in the world price of steel. The turbines have a steel base, while the blades are made of fibre glass and steel.

Manager of the Centre of Excellence for Renewable Energy at the PCJ, Dr Gary Jackson, told Wednesday Business the turbines were strong enough to withstand hurricanes of categories four and five strength, and are insured.


Source:
susan.gordon@gleanerjm.com
Jamaica Gleaner
Wednesday August 20, 2008

http://www.jamaica-gleaner.com/gleaner/20080820/business/business2.html