The Office of Utilities Regulation (OUR) announced on Thursday that it was considering the recommendation of a license to Energy World International (EWI), but stressed that it could not reveal confidential details on the ongoing process.
The latest development follows the recent approval by the OUR of the Power Purchase Agreement (PPA) between the Jamaica Public Service Company Limited (JPS) and EWI.
EWI became the preferred bidder to provide a new 360 megawatt power plant for Jamaica last October, and it is relation to that project that the PPA was recently signed, with the JPS to be the distributor of the energy produced.
According to the OUR, the PPA does not become effective until the OUR makes a recommendation and the licence is issued by the country's Energy Minister to EWI.
It said "a critical component in considering the grant of the license is information received from the conduct of due diligence."
Due diligence
A due diligence is required on all applicants and their principals for licences before the OUR makes a recommendation to the relevant sector minister.
The objectives of due diligence, the OUR explained, are to "ascertain if there are adverse traces, that is, any matter that would preclude the OUR from recommending the issuance of a license to the entity, such as criminal antecedence, national or international security concerns, or placement on watch or banned listings; and Alert the OUR to any risk particular to the applicant so as to inform any necessary mitigation measures."
Confidentiality
In response to demands for transparency in the process, the OUR stressed that it was "constrained by statutory and confidentiality obligations which prohibit the disclosure of such material."
It said the nature of due diligence requires that the reports are issued under strict confidence "as they contain information which includes expressions of opinion and judgments that touch and concern the commercial reputation and character of the parties to which they relate, and are therefore attended with a high risk of litigation."
Nevertheleess, the regulatory agency disclosed that the information regarding due diligence had been shared with the Office of the Contractor General "with whom the OUR is permitted to disclose such content."
EWI became the preferred bidder to proide the new power plant when the initial winner of that right failed to deposit the required one per cent bid bond on time.
The total cost of the project is US$737 million.
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