Jamaica Private Power Company plant seen Thursday at Rockfort, Kingston. - Rudolph Brown/Chief Photographer

International energy company AEI Limited has taken controlling interest in the Rockfort-based Jamaica Private Power Company, finalising three-tier deals Tuesday that give it a firm 84.4 per cent ownership.

"JPPC broadens our geographic reach by adding a new country to our operating platform while leveraging our deep experience in the Caribbean Basin and Latin America and further strengthening our position as a key player in the region's energy market," said Emilio Vicens, AEI's vice-president for business development.

That deal was struck at the same time that AEI, a privately-owned company, formerly known as Ashmore Energy International, was announcing two other acquisitions valued at US$685 million - a 50 per cent stake in Chile's Chilquinta Energia SA and 37.9 per cent of Peruvian electricity distributor Luz del Sur SA under purchase agreements with the Public Service Enterprise Group out of Newark, New Jersey.

The acquisitions include service companies that provide management of technical projects and services to utilities, construction work and maintenance.

AEI is yet to decide who will run JPPC, a spokesman told the Financial Gleaner Wednesday, saying the company, whose global business is valued at US$2.7 billion in revenues, was unprepared to disclose the terms of the deal nor its plans for the energy firm. JPPC was being run by James Zimmer.

"AEI's first priority is to continue the successful operation of the facility," said the company spokesman.

Foreign assets wrapped up

"The company has not made any decisions at this time in relation to management."

AEI's dominant hold on JPPC follows deals with minority partners Atlantic Power Corporation for 24.1 per cent of the company, and with Energy Investors Funds for 18 per cent.

In June, AEI had announced its intent to purchase 42.3 per cent of JPPC from CMS Energy - closing that deal on Tuesday - to give the American energy company 84.4 per cent equity and firm control.

CMS said at the close of the deal Tuesday that it had now wrapped up divestment of foreign assets whose sales represented combined value of US$1.5 billion, some of which has been used to pay down its debt, while a portion has been redirected into its Michigan utility firm, Consumer Energy, to fuel a five-year US$6 billion expansion programme.

Independent power provider JPPC operates a diesel-fired plant with installed capacity of 63 megawatts, or 7.7 per cent of Jamaica's total generating capacity, and sells its output to the national grid operated under monopoly by Japanese-owned Jamaica Public Service Company.

On Wednesday, JPS was unable to say definitively how the ownership change would impact its arrangement with JPPC, neither would AEI comment on how it intends to handle the company's contractual arrangements.

AEI mainly operates in emerging markets, with involvement in power distribution and generation with gross capacity of 1,675 MW, compressed and natural gas, and retail fuel.

The birth of AEI

AEI operates out of Houston, Texas, but is registered in the Cayman Islands as the holding company for the energy-related businesses acquired by certain investment funds managed by Ashmore Investment Management Limited (AIML). It also acts as a platform for the acquisition of future assets.

Among AIML's top deals was the US$2.9 billion purchase of Prism Energy from Enron Corp. in a two-stage transaction between May and September 2006.

Three months later, AIML was amalgamated into Prism, and shortly after, the entity was renamed AEI Limited, which currently has some 36 companies in its portfolio spread across South America, Central America, the Caribbean, Europe and the Middle East.

Jamaica is new territory for the company, whose operations are now spread across 19 countries.

JPPC was initially a US$144 million investment made in 1997 by four entities - CMS (42.3 per cent), Atlantic Power Corporation (24.1 per cent), Energy Investors Fund (18 per cent) and Commonwealth Develop-ment Corporation (15.6 per cent).

CDC appears to have retained its interest.

lavern.clarke@gleanerjm.com