Your SlideShare is downloading. ×
0
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Water Management Financing in the Caribbean - Part 2
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Water Management Financing in the Caribbean - Part 2

206

Published on

Part 2 of the presentation entitled "Water Management Financing in the Caribbean."

Part 2 of the presentation entitled "Water Management Financing in the Caribbean."

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
206
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Finance Models/Source of Finance <ul><li>Traditional Method via Multi/Bi-Lateral Agencies </li></ul><ul><li>Alternative Project Development Approach (APDA ) - Value Engineering Option </li></ul><ul><li>Grant Financing </li></ul><ul><li>Public Private Partnership (PPP) </li></ul><ul><li>Commercial Bank Loans </li></ul><ul><li>Tariff via K-Factor Programme </li></ul><ul><li>Credit Enhancement Fund - CReW Programme </li></ul>
  • 2. TRADITIONAL APPROACH TO PROJECT FINANCING Construction &amp; expansion of water &amp; wastewater infrastructure usually requires LARGE CAPITAL INPUT LONG AMORTIZATION PERIOD INTERNATIONAL FUNDING AGENCIES CAPITAL MORATORIUM, LONG REPAYMENT TERM, LOW INTEREST RATES
  • 3. <ul><li>Implementation of water supply and sewerage </li></ul><ul><li>projects have been undertaken </li></ul><ul><li>‘ Traditionally via the Application of Standard Project Management Processes ’ </li></ul><ul><ul><li>Preliminary Design </li></ul></ul><ul><ul><li>Finance Sought (Multi-lateral/Bi-lateral Agency) </li></ul></ul><ul><ul><li>Detailed Design </li></ul></ul><ul><ul><ul><li>Tendering &amp; selection of Design consultants </li></ul></ul></ul><ul><ul><ul><li>Design work </li></ul></ul></ul><ul><ul><li>Construction </li></ul></ul><ul><ul><ul><li>Tendering &amp; selection of contractor </li></ul></ul></ul><ul><ul><ul><li>Implementation of the works </li></ul></ul></ul><ul><ul><li>Delays due to issues relating to : </li></ul></ul><ul><ul><li>Procurement process - Multi Agencies &amp; Multi Layer Approval Processes </li></ul></ul><ul><ul><li>Terms of the financing - Level of inflexibility to respond to changes of situations </li></ul></ul>
  • 4. <ul><li>Traditional Finance Method </li></ul><ul><li>Loan Terms and Conditions are attractive &amp; favourable. </li></ul><ul><li>Challenge : Duration between Loan Approval &amp; Completion </li></ul><ul><li>of Project is long. </li></ul><ul><li>Unsuitable for works with ‘Relatively Fast Commercial Returns’ </li></ul>No. Project / Sponsor Loan Value US$M Project Initiated in Year Project Status Rate % Moratorium Years Tenure Years Elapse Time in Years ( From Loan Approval – Implementation ) 1.0 KMA Water Supply Improvement Project (JICA) 85.0M 1990’s 2010 Phase # 1 Completed. 2.50 4 25 10 2.0 Port Antonio Water Supply Improvement Project (EIB) 40.0M Mid 1990’s Work delayed. No Fiscal Space. 3.00 5 15 10 3.0 Kingston Water &amp; Sanitation Project (IDB) 40.0M 1998 New loan being negotiated. Components being implemented. US$15.0M diverted Food Safety Program. 1.10 4 24 7
  • 5. Alternative Project Development Approach (APDA )
  • 6. Alternative Project Development Approach <ul><li>DEVELOPING AND IMPLEMENTING PROJECTS USING THE TRADITIONAL APPROACH – WITH FUNDING ASSISTANCE FROM INTERNATIONAL AGENCIES - IS DIFFICULT </li></ul>LONG LEAD TIME FORTUNATELY SOME PROJECTS REPRESENT AN OPPORTUNITY FOR RELATIVELY FAST COMMERCIAL RETURNS SO THEY ALSO OFFER AN OPPORTUNITY FOR AN ALTERNATIVE IMPLEMENTATION &amp; FINANCING APPROACH <ul><li>EARLY (and LARGE) REVENUE STREAM </li></ul><ul><li>IMPACT CHARGES - CONNECTION FEES </li></ul>
  • 7. Alternative Project Development Approach (APDA ) <ul><ul><li>Integrated Project Management Team Established with the </li></ul></ul><ul><ul><ul><li>- NWC </li></ul></ul></ul><ul><ul><ul><li>- Independent Consultant </li></ul></ul></ul><ul><ul><ul><li>- Construction Company </li></ul></ul></ul><ul><ul><li>BUILT ON MUTUAL RESPECT AND TRUST </li></ul></ul><ul><ul><ul><li>An innovative approach to Project Development and Implementation has been developed </li></ul></ul></ul>
  • 8. GENERAL PROCEDURE for APDA <ul><li>NWC DEFINES PRIORITY OBJECTIVES </li></ul>2. NATIONAL CONTRACTS COMMISSION (NCC) APPRAISED 3. INDEPENDENT CONSULTANT APPOINTED 4. CONSTRUCTION COMPANY SELECTED 6a. CONSULTANT’S COST ESTIMATE 6b. CONSTRUCTION COMPANY’S PROPOSAL FOR COST &amp; FINANCING 7. NEGOTIATIONS 5. PROJECT TEAM, USING COLLECTIVE EXPERIENCE, DEFINES PROJECT IN DETAIL – TO OPTIMIZE NWC INVESTMENT 8. “VALUE-FOR-MONEY” SUBMISSION TO NCC FOR APPROVAL 10. IMPLEMENTATION 9. CABINET APPROVAL
  • 9. NWC’S APDA EXPERIENCE - The US$39 M GREAT RIVER PROJECT <ul><li>5 migd EXPANSION </li></ul><ul><li>GREAT RIVER TREATMENT PLANT </li></ul><ul><li>20km, 500mm Ø TRUNK MAIN to LUCEA </li></ul>
  • 10. NWC’S APDA EXPERIENCE -TIMELINE GREAT RIVER PROJECT <ul><ul><li>AUGUST 2000 – M.O.U. for FRENCH GOVERNMENT FINANCED STUDY (5migd Treatment Plant &amp; 20kms 500mm Ø Pipeline) </li></ul></ul><ul><ul><li>MARCH 2001 STUDY COMMENCED </li></ul></ul><ul><ul><li>AUGUST 2001 STUDY COMPLETED </li></ul></ul><ul><ul><li>NOVEMBER 2002 INDEPENDENT CONSULTANT APPOINTED </li></ul></ul><ul><ul><li>DECEMBER 2002 SOGEA – SATOM’S PROPOSAL </li></ul></ul><ul><ul><li>DECEMBER 2002 to JULY 2002 - NEGOTIATIONS, FINANCE PACKAGING </li></ul></ul><ul><ul><li>&amp; APPROVAL </li></ul></ul><ul><ul><li>JULY 2002 – CONTRACTS SIGNED </li></ul></ul><ul><ul><li>DECEMBER 2002 – FINANCIAL CLOSURE </li></ul></ul><ul><ul><li>MARCH 2003 – ORDER TO COMMENCE </li></ul></ul><ul><ul><li>OCTOBER 2004 – PROJECT COMPLETED ON BUDGET </li></ul></ul><ul><ul><li>ELAPSED TIME – 4 YEARS </li></ul></ul>
  • 11. FINANCING The GREAT RIVER PROJECT <ul><ul><li>ARRANGED BY CONTRACTOR: </li></ul></ul><ul><ul><li>COMMERCIAL LOAN 6 Million EURO - 4 years - 7.5% </li></ul></ul><ul><ul><li>FRENCH BUYER CREDIT 9 Million EURO - 7 years - 3.6% </li></ul></ul><ul><ul><li>ARRANGED BY NWC : </li></ul></ul><ul><ul><li>COMMERCIAL LOAN 3.8 Million EURO - 8 years - 9.25% </li></ul></ul><ul><ul><li>3 Million US$ - 4 years - 7.5% </li></ul></ul><ul><ul><li>46% of PROJECT COST </li></ul></ul><ul><ul><li>54% of PROJECT COST </li></ul></ul><ul><ul><li>17.2 Million US$ - 5 years - 9.25% </li></ul></ul>
  • 12. <ul><li>JAMAICA WATER SUPPLY IMPROVEMENT PROJECT </li></ul><ul><li>Alternative Project Development Approac h - APDA </li></ul>
  • 13. JAMAICA WATER SUPPLY IMPROVEMENT PROJECT <ul><li>In 2006 NWC received an unsolicited proposal to address the water supply shortfall in KSA – ‘The Kingston Improvement Project ‘ </li></ul><ul><li>The proposal was considered and the Alternative Project Development Approach applied </li></ul><ul><li>Independent Consultant was appointed in 2007 </li></ul><ul><li>Over time the project evolved into the Jamaica Water Supply Improvement Project (JWSIP) to include projects in rural areas of the island. </li></ul>
  • 14. JAMAICA WATER SUPPLY IMPROVEMENT PROJECT <ul><li>The Project consists of (2) Segments </li></ul><ul><li>CATEGORY A - BNP Paribas / VINCI Grand Project </li></ul><ul><ul><li>Rehabilition - 20MGD Constant Spring &amp; Seaview WTP </li></ul></ul><ul><ul><li>New wells (Halls Green) – 1 mgd </li></ul></ul><ul><ul><li>Replacement of asbestos cement Rio Cobre Pipeline (Bog Walk to Dam Head) </li></ul></ul><ul><ul><li>Consumer Metering – 70,000 meters </li></ul></ul><ul><li>CATEGORY B - Bank of Nova Scotia (BNS) </li></ul><ul><ul><li>New 15 mgd WTP </li></ul></ul><ul><ul><li>Replacement of asbestos cement Rio Cobre Pipeline (Dam Head to Ferry) </li></ul></ul><ul><ul><li>Network improvements (F/Hills &amp; Stony Hill) </li></ul></ul><ul><ul><li>Connecting Pipeline to F/Hills </li></ul></ul><ul><ul><li>Rural WS Projects </li></ul></ul>
  • 15. <ul><li>Category A - Commenced - March 2010 Scheduled Completion - April 2012 </li></ul>Replacement of Rio Cobre Pipeline Part 1 &amp; 2 Construction of Rio Cobre WTP 15 MGD Construction of Ferry to Red Hills relift scheme Refurbishment of Constant Spring WTP Refurbishment of Seaview WTP Halls Green Wells and Reservoir Forest Hills / Red Hills Network Improvement Stony Hill Network Improvement
  • 16. JWSIP <ul><li>Project Benefits include : </li></ul><ul><ul><li>Addressing the Water Supply Shortfall/Deficit in the Kingston Metropolitan Area – KMA via : </li></ul></ul><ul><ul><ul><li>New sources ( New Treatment Plants 15MGD /Well) </li></ul></ul></ul><ul><ul><ul><li>reduction of water losses </li></ul></ul></ul><ul><ul><li>Improve Reliability </li></ul></ul><ul><ul><ul><li>Rehabilitation of two major WTPs in the KSA </li></ul></ul></ul><ul><ul><ul><li>Network improvement - Stony Hill </li></ul></ul></ul><ul><ul><li>Improvement in the efficiency of the operations </li></ul></ul><ul><ul><li>ELAPSE TIME : 2006 TO 2012 </li></ul></ul>JAMAICA WATER SUPPLY IMPROVEMENT PROJECT

×