Announcement of Twenty-Two Million Dollars Loan for Electric Power in Jamaica on June 10, 1966

IW~RL[>:-BANK] • /., $ ~ -i'v. .:.'(J"o c-,.ION ANO O~ 18 18 H ST R EE T, N . W .. WASH I NG TON D\- C. 2 0 4 3 3 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 66/27 Subject: $22 million loan for electric .June 10, 1966 power in Jamaica The World Bank has approved a loan equivalent to $22 million to the Jamaica Public Service Company, Limited, for electric power development. The loan will 2ssist in financing the installation of 121,000 kilowatts of new generating capacity and the expansion and improvement of transmission and distribution systems through- out the island. The project will more than double Jamaica's present public supply of power. Four commercial banks will participate in the loan, without the World Bank's • guarantee, for a total amount of $290,000, representing part of the first maturity which falls due March 15, 1970. The participants are The First Pennsylvania Banking and Trust Company, Philadelphia; Meadow Brook National Bank, New York; The Citizens and Southern National Bank, Atlanta; and Marine Midland Trust Company of Western New York, Buffalo. In the past decade the Jamaican economy, once substantially dependent on trop- ical agriculture, has experienced a major transformation principally because of the discovery and development of bauxite -- it is now tlie world's largest producer -- a rapid rise in industrial activity, its development into a major vacation resort, and an upsurge in the building industry. Gross national product increased at an average annual rate of 6.8%-, raising per capit~ inco~e from US$250 to over US$450. A large expansion of electric power facilities is being undertaken to meet the re- quirements of the rapidly growing economy • •  - 2 - Virtually all public power in Jamaica is suppU.ed by the Jamaica Public Service • Company, Limited (J.P.S.C.), a subsidiary of a Canadian company, Jamaica Public Ser- vice Limited. In the last five years, its sales of electricity increased at an average rate of 13.5%, reaching 15.4% in 1965, and the number of consumers grew from about 60,000 to 80,000. Connnercial and industrial consumers account for about 70% of power sales. J.P.S.C. at present operates power plants with a combimad capacity of about 109,000 kilowatts. There is an additional 94,000 kilowatt~ of generating capacity on industrial premises supplying the mining and port installations of four overseas aluminum companies, 18 sugar factories, a cement plant and some minor industries. In the period 1966-75, sales by the Company are expected to increase at an average rate of 14.2%. The works being assisted by the Bank loan are those to be undertaken during the • first 3-1/2 years of the Company's 10-year development program. They consist mainly of the construction of a new steam station at Old Harbour Bay, about 20 miles from Kingston. Initially the plant will have an installed capacity of 99,000 kilowatts, but is being designed to house future units of 100,000 lr1dowatts capacity. In order to meet power requirements before this station comes into operation and to provide peaking capacity thereafter, 22,000 kilowatts of diesel-4riven generating plant will l>e installed at Montego Ba.y, Monymusk and other critical points on the system •. · The project also includes the construction of 191 miles of additional high voltage trans- mission lines, principally to link the new power station with Kingston and other load centers, but also to reinforce the existing system. The distribution network will also be reinforced, reconstructed and extended. Engineering consultants are designing the steam station and main transmie.sion works and will supervise their construction. Design and construction of the dis- tribution works will be carried out by the Company's ~wn staff. Contracts for civil works and for plant' equipment are beihg awarded on the basis of internationa.l •  ~ l .l .. 3 - • compe,titive bidding. The first 33,000-kilowatt unit of the Old Harbour plant is expected to come into operation in June 1968; the second unit, of 66,000 kilowatts, is scheduled for completion a year later, at which time the transmission and dis- tribution works should be finished. The total cost of the project is estimated at the equivalent of $41.1 million. The Bank loan of $22 million will cover the foreign exchange requirements; the remaining costs will be met by the Jamaica Public Service Company, Limited from other sources. The loan will be for a term of 20 years and bear interest at the rate of 6% per annum. Amortization will begin March 15, 1970. The loan will be guaranteed by the Government of Jamaica • • •