Early candidate for Kyoto mechanism -- Jamaica 20 MW

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Construction is expected to start soon on Jamaica's first wind farm despite changes in the plans and a delay, say officials. The $24 million project is to consist of 23, 900 kW wind turbines made by the Dutch arm of wind turbine manufacturer NEG Micon. A 20-year power purchase contract has been inked with the national utility, the Jamaica Public Service Company (JPSCo). If built, it will be the largest wind farm in the Caribbean.

A change in the structure of the development team, however, has pushed back the January date for the start of the project by several weeks. State energy company Petroleum Corporation of Jamaica (PCJ) and UK developer Renewable Energy Systems (RES) had been announced as co-owners of the 20.25 MW plant at Wigton. But just a few weeks ago the structure changed. RES has become the turnkey contractor and PCJ the sole owner, confirms Raymond Wright, managing director of the PCJ Group of Companies.

A Jamaican government guarantee had been required to access a bank loan, he explains, and the government was not willing to give a guarantee. Last month PCJ was again seeking an equity partner. PCJ has, however, secured Dutch export credit financing of $5.8 million for the turbines. Dutch government officials were in Kingston in January to finalise the deal, which is being put together under the Netherland's ORET/MILIEV environment program. To qualify, the project must be in a developing country, commercially not viable -- according to OECD regulations -- and contribute to sustainable economic relations.

Dutch loans

Wright says an application has been submitted for the project to qualify for the Netherlands Cerupt program, the Dutch sorting house for clean development mechanism (CDM) projects under the Kyoto protocol. A decision on inclusion in Cerupt was not expected before late January, but Wright is optimistic. PCJ is trying to sell some of the project's carbon credits to a Dutch firm, he adds. The plant will displace 522,500 tonnes of carbon dioxide a year.

The United Nations Environment Program has studied whether emissions reduction credits can be sold to a third party or must be valued within the power purchase agreement. A letter of intent for the sale of 1.05 million metric tonnes of CO2 credits from the project had been signed in August 2000 with the World Bank's Prototype Carbon Fund. But power purchase negotiations were delayed because of privatisation of Jamaica's electricity industry. The wind farm is part of Jamaica's plan to reduce its reliance on oil.

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