—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.