NWC capital projects coming under new NCB bond facility - Holness
Jamaicans from all walks of life stand to benefit from a J$15-billion local bond facility arranged by National Commercial Bank Capital Markets Limited (NCBCM).
The National Water Commission (NWC) announced yesterday that it had established the bond facility arranged by NCBCM.
NWC said that the facility would enable it to become more financially viable to allow for the re-balancing of its loan portfolio and to reduce its use of government guarantees.
Speaking during a press briefing at Jamaica House, Prime Minister Andrew Holness said a significant portion of the money would be used by the NWC to finance capital projects.
Holness listed pipe-laying, sewage, water treatment and general repairs as some of the projects to be undertaken island-wide now that the NWC was financially stronger.
“That means that the people who I see in East Rural St Andrew, and the people who I hear complaining all over Jamaica that they don’t have water, the NWC is in a better position to provide that,” he declared.
“But more than that, because it is now a financially viable asset, it does not have to depend on government support or revenue to do it. It can now engage on equal footing with the private sector through public-private partnerships because it has a stronger balance sheet to execute these projects. This transaction sends a great signal to the market” he continued.
Earlier, the chairman of the NWC, Senator Aubyn Hill, said the facility would also allow for the installation of 450,000 new smart metres.
Hill underscored that the NWC had a very large book of debt in foreign currency while all its revenues were in Jamaican dollars.
He noted that between 2013 and 2016, the total foreign exchange losses of NWC was J$7.76 billion.
The senator pointed out that NCBCM won the bid after a request for proposal was issued to four local banks in March last year.
Conditions given and met by the winning bank
- No government guarantee for the new facility
- The currency must be Jamaican
- A substantial tranche of the offering must carry a 40-year tenure (J$5 billion of the J$15 billion will be repaid in 40 years at 13 per cent)
- Part of the proceeds of the bond must be used to pay off a portion of the syndicated loan which two of the banks that were invited in the RFP had