Water Management Financing in the Caribbean - Part 3


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Part 3 of the presentation entitled "Water Management Financing in the Caribbean."

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Water Management Financing in the Caribbean - Part 3

  1. 1. JAMAICA WATER SUPPLY IMPROVEMENT PROJECT US$98.0M US$16.0M VCGP Loans 1&2 Buyer Credit (BNPP/Soc.Gen) US$82M US$213.0 M Commercial Loan US$115M (Bank Nova Scotia - BNS ) ($10.8M + $5.1) Financing Sources VCGP Loans 1&2 Vinci C Grand Projects Loans 1&2
  2. 2. JWSIP - FINANCE STRUCTURE NWC VCGP A B A B FINANCING COMMERCIAL CONTRACTS <ul><li>Cost of the Works: 163 MUSD Project cost: 213 MUSD </li></ul><ul><li>= Cost of Financing (fees,IDC, premium) </li></ul><ul><li>Contractual Scheme </li></ul>VCGP VCGP Consortium VCGP / WMI (95 MUSD) Contract B VCGP Consortium VCGP / WMI Contract A (69 MUSD) 10,8 MUSD 5,0 MUSD BNPP/ Soc.Gén. 82 MUSD MOF Guarantee MOF Guarantee MOF Guarantee Insurer: Coface Insurer: MIGA VCGP Credit Agmt#1 VCGP Credit Agmt#2 Nova Scotia bank 115 MUSD MOF Guarantee Insurer: MIGA
  3. 3. <ul><li>FINANCING OF SEWERAGE PROJECTS </li></ul>
  4. 4. FINANCE OF SEWERAGE PROJECTS <ul><li>Priority given to developing water related Projects / Infrastructure Works </li></ul><ul><li>Interest in the financing/developing of sewerage projects not as attractive as water projects </li></ul><ul><li>Creative financing methods were developed for the following sewerage works: </li></ul><ul><li>1. Soapberry - KSA </li></ul><ul><li>2. K- Factor Programme - 44 WwTPs </li></ul><ul><li>3. Credit Enhancement Fund - CReW Programme </li></ul>
  5. 5. <ul><li>Soapberry Wastewater Treatment Plant </li></ul>
  6. 6. <ul><li>1987 SENTAR Study : Untreated sewage is the </li></ul><ul><li>major impact on the Kingston Harbour. </li></ul><ul><li>2004 Establishment of SPC - CWTC </li></ul><ul><li>Planning Horizon - Year 2025 - 60MGD </li></ul><ul><li>2005 Completed Designs for Phase I Central WWTP </li></ul><ul><li>System for KSA & South East St. Catherine </li></ul><ul><li>(Portmore) </li></ul><ul><li>2008 Construction of Module # 1-18 MGD WWTP </li></ul><ul><li>completed within Four (4)Years </li></ul><ul><li>‘ All new and incremental flows in the KSA will be directed to this facility via the extension of existing sewer network’ </li></ul>Soapberry Wastewater Treatment Plant
  7. 7. SOAPBERRY SEWERAGE <ul><li>Special Purpose Company (SPC) established - CWTC 2004 </li></ul><ul><li>Project Cost - US$ 50.0M </li></ul><ul><li>Loan US$38.0M - NCB </li></ul><ul><li>Six(6) Agreements </li></ul><ul><li>Equity Partners : UDC, NWC, NHT & Ashtrom Building Systems </li></ul><ul><li>Finance,Design, Engineering & Build, Operate & Manage </li></ul><ul><li>BOOT arrangement with the SPC – 20 Years </li></ul><ul><ul><li>NWC will be charged for wastewater received at the new plant (US$11.5M/Year) </li></ul></ul>Soapberry Treatment Plant
  8. 8. PROJECT AGREEMENTS PROJECT COMPANY NWC Sewerage Treatment Agreement Project Management Agreement UDC Loan Agreement(s) 338888888 LENDER(S) Agreement Equity Participation Equity Holders UDC, NHT, NWC, Private Developer Construction Agreement PRIVATE DEVELOPER PRIVATE DEVELOPER O&M Agreement
  9. 10. BENEFITS <ul><li>Reduce pollution & adverse impact on environment (Kingston Harbour) </li></ul><ul><li>Reduce threat to public health </li></ul><ul><li>Improve NWC’s operational efficiency and service delivery . </li></ul><ul><li>Increase household connection and expansion of the sewerage coverage. (Increase in density of residential and commercial development) </li></ul><ul><li>Stimulate development in the other areas </li></ul><ul><li>Compliance with NEPA (2007) Tertiary Standards for the treatment of effluent discharge. </li></ul>
  10. 11. <ul><li>‘ CREDIT ENHANCEMENT FUND’ </li></ul><ul><li>Caribbean Regional Fund for Wastewater Management </li></ul><ul><li>CReW </li></ul>
  11. 12. Caribbean Regional Fund for Wastewater Management CReW <ul><li>Facilitate Private Sector greater participation in the investment & development of Wastewater Management in the Caribbean </li></ul><ul><li>To test innovative financing approaches for Wastewater Projects </li></ul><ul><li>Offer flexibility in the development of Financial Instruments </li></ul><ul><li>Assist to identify & bring projects to bankable status </li></ul><ul><li>Five Pilot Projects for the development of wastewater management (Jamaica, Belize, Barbados, Guyana, Trinidad &Tobago) </li></ul>
  12. 13. Caribbean Regional Fund for Wastewater Management - CReW <ul><li>Key Project Stakeholders : </li></ul><ul><li>Inter American Development Bank (IADB) * </li></ul><ul><li>Global Environment Facility (GEF) * </li></ul><ul><li>United Nations Environment Programme (UNEP) </li></ul><ul><li>United States Trade& Development Agency (USTDA) ^ </li></ul><ul><li>Pilot Water Utilities & Service Providers </li></ul>* Sponsor of Fund * Management of the CReW Programme ^ Technical Assistance
  13. 14. Caribbean Regional Fund for Wastewater Management - CReW <ul><li>Key Project Stakeholders : </li></ul><ul><li>Inter-American Development Bank (IADB) </li></ul><ul><li>Responsible for the administration & management of the US$ 20.0M Fund. </li></ul><ul><li>United States Trade & Development Agency (USTDA) </li></ul><ul><li>The USTDA supports the IADB’s goal in ensuring that the Pilot K- Factor funded projects are effectively & efficiently developed and implemented. </li></ul><ul><li>Facilities are operated based on applicable policies, procedures , standards & laws </li></ul>
  14. 15. <ul><li>The USTDA - Technical Assistance (TA) will : </li></ul><ul><li>Define areas of Procurement, Construction, Technology selection and O&M for compliance with local laws, policies, procedures, regulations, standards </li></ul><ul><li>Provide recommendations on improvements </li></ul><ul><li>Preparation of an Evaluation Criteria Check List </li></ul><ul><li>Document the general conditions at Facilities </li></ul>Caribbean Regional Fund for Wastewater Management-CReW ROLL OF KEY STAKEHOLDERS
  15. 16. <ul><li>GLOBAL ENVIROMENT </li></ul><ul><li>FUND – GEF </li></ul>Caribbean Regional Fund for Wastewater Management-CReW Inter-American Development Bank CReW Caribbean Fund for Wastewater Water Management US $20.OM Grant Utility Operators NWC, WASA etc. USTDA US$ 150,000 Grant UNEP