Gov't to lend US$150m to JPS to avoid being forced into extending licence

Energy Minister Daryl Vaz says Cabinet has decided that the Government will lend US$150 million to the Jamaica Public Service Company Limited (JPS) to help fast-track the restoration of electricity across the island.

Recently, permanent secretary in the Ministry of Energy, Carol Palmer, revealed that JPS has asked the Government to extend its current licence, which expires in July 2027, in order to help the light and power company secure financing for major restoration work in parishes heavily affected by Hurricane Melissa.

However, the Government had indicated to JPS in July that there would be no automatic renewal of its licence under the existing terms.

Vaz told the House of Representatives on Tuesday that JPS had stated that without the extension, which would give it access to credit, the earliest it would be able to restore power was about April or May 2026.

Vaz said through the Cabinet decision "what we have done is skilfully separated the negotiation of a loan and untied from all of these proposals of extension."

Vaz informed the House that the JPS had requested a 15-year licence extension.

"Any extension to the existing licence, which expires in 2027, without fundamental changes, would be a broken commitment by this minister and this government, based on our position stated to the Jamaican people prior to July," he added.

Vaz said the loan to JPS will have a five-year term and that the interest rate is to be negotiated.

He said the loan will allow for 300 overseas line workers along with specialised trucks and tools arriving in Jamaica in the second week of December with overall projections showing a full restoration between January to February 2026.

Vaz gave the assurance that there would be no risk to taxpayers as a result of the Cabinet decision.

"What is important is to indicate that in any scenario the Government is protected. Scenario one is a five-year loan, which they have the option to pay out in two years, if a new licence has been agreed on, which would allow them to raise capital, new capital based on a new licence. And secondly, if that negotiation is not concluded, then the Government has already indicated in the letter that I wrote that the Government would make arrangements to acquire their assets, which means that the funds that will be owed will be taken out of any disbursement," he explained.

Follow The Gleaner on X and Instagram @JamaicaGleaner and on Facebook @GleanerJamaica. Send us a message on WhatsApp at 1-876-499-0169 or email us at onlinefeedback@gleanerjm.com or editors@gleanerjm.com.