Letter to the Gleaner: Further clarification needed regarding the US$62.5m Mona Reservoir project

During the March 2023 United Nations Conference on Implementation of the Objectives of the International Decade of Action, “Water for Sustainable Development,” minister Samuda gave a speech about water in Jamaica. As usual, there were requests for foreign help and investment. He said the following: “The high cost of electricity has significantly impacted Jamaica ability to distribute water to all.” He went on to say that Jamaica is reducing it’s energy consumption in the distribution process, and the Mona Reservoir floating solar platform project was highlighted as an example. However, this project appears to be a gold mine for the investors: Derillion Energy Jamaica Limited, the Aten Group and REIL Energy Investments Limited.

When the announcement was made in September 2022 that a US$62.5m floating solar platform would be developed on the Mona Reservoir, the PM said the following: “One of the largest costs to the NWC [National Water Commission], is its energy cost. The savings will be significant, and it will strengthen the NWC.” Also “What you’re seeing today is another strategic and synergetic nation-building decision that generations to come will benefit from.” No, what we’re seeing is yet another strategy to make foreign investors richer at our expense. He was not the only con artist. Minister Samuda stated that the NWC will receive payments of US$25k for leasing out the surface area for the facility. And other benefits included decreased evaporation losses from the reservoir’s surface, along with reduced need to treat algae buildup as well as de-silting capacity gains.

However, it is gross financial mismanagement. The shadow minister of energy, Philip Paulwell said solar pays for itself in 3 years, and he should know because he came off the grid in 2012. Handing over returns on investment of under 4 years is monumental financial negligence bordering on criminality.

Minister of Energy Daryl Vaz joined the party. He contended that the project is directly in tandem with the Jamaica National Energy Policy 2030, which stipulates that government ministries and agencies serve as models and leaders in energy conservation and environmental stewardship. However, our ministries and agencies are serving as models of how foreign investors can get richer at our expense. In March 2022, a Canadian company signed a deal with the Ministry of Education for a schools solar pilot project.

The goal should be to eliminate the NWC’s annual US$52m JPS bill, and deliver cheaper and more dependable water supply, not to brag about having the first floating platform in the region. Less than US$200m would remove all water facilities off the grid, and that money is available. It can be taken from the US$1.7b IMF loan facility, of which US$763m is earmarked for green investment.

We’re told that we don’t have the money for roads and bridges, for pay rises, markets, proper solid waste management etc well here is a reason why. Gross mismanagement of the people’s money and resources. In Jamaica it is evident that foreign investment in renewables should not mean foreign ownership.

THE LETTER

The Editor, Madame:

I believe that minister Samuda needs to disclose full details of the US$62.5m Mona Reservoir floating solar facility, because the numbers point to a return on investment of under 4 years for the investors. 

My Analysis

The investors will be selling electricity to JPS and the rates received should be similar to those paid to Wigton Windfarm. I think that is a fair assumption. Wigton generates 62.7MW, and in financial year 2021-22 had sales of just over $2b. According to the NWC, Mona will generate 35MW (56% output of Wigton), so expected sales to JPS should be in the region of $1b.

The solar facility will also generate 10MW to power some water facilities. In a Oct 2022 Jamaica Information Service report, Samuda said “…the NWC should, conservatively, see a reduction in the… overall energy cost KWh of 30% of the current rate…” Also, “The projected savings, conservatively, is approximately $1b a year” which suggests that the annual bill for these facilities is over $3b. Therefore, the investors could be paid over $2b by the NWC i.e. the people.

So the potential annual earnings are over $3b (US$20m), on a US$62.5m investment. If this is true, then explanations are needed from many quarters. To handover a return on investment of under 4 years to the private sector is gross financial negligence, and I have asked for an investigation by MOCA.

State Investment Option

The minister also said that NWC has a network of more than 730 facilities with average monthly costs of $650m, which suggests an annual bill around US$52m. He went on to say that energy is one of the most important pillars of water production and distribution. 

One must therefore ask minister Samuda and the NWC why our facilities are still on the grid at an annual cost of US$52m when almost everyday somewhere on the island suffers from water issues because of JPS. State investment would cost under US$200m and eliminate a major problem, whilst generating savings over US$50m per annum, monies that could be invested to upgrade the system and improve pay. This incredibly prudent investment can be immediately financed from the US$1.7b loan facility made available by the IMF, because US$763m is for green energy projects. There is no excuse.