Taqa and Marubeni have closed the joint venture deal that gives the United Arab Emirates company a stake in the Caribbean energy market, for US$320 million.

Taqa now owns 40 per cent of Jamaica Public Service Company in equal partnership with Marubeni Caribbean, which also now owns 40 per cent while the Jamaican government retains its minority interest of 20 per cent.

Taqa said its 40 per cent of JPS, which also operates six hydro-electric plants, expands its downstream business into sustainable energy source.

Taqa, which disclosed the value of the deal in a statement posted on its website dated Sunday, did not offer a breakdown of the price paid for its half of Marubeni's Caribbean holdings under the 50:50 partnership struck by the two companies.

The deal covers four electricity transmission and distribution businesses in Jamaica, the Bahamas, Trinidad and Tobago and Curaçao.

Generation capacity

The businesses have a combined generation capacity of 2,300 MW.

Japanese company Marubeni acquired pieces of the businesses in 2007 as follows:

Grand Bahama Power Company in Grand Bahama - 55.4 per cent equity

Jamaica Public Service Company which owns and operates 10 generating facilities, including six hydroelectric plants - 80 per cent equity.

PowerGen, an independent power producer that supplies 80 per cent of total electricity demand in Trinidad & Tobago - 39 per cent equity.

Curaçao Utilities Company N.V. which supplies electricity, steam and water to the Island Refinery operated by Petroleos de Venezuela, SA - 25.5 per cent equity.

Operational role

Taqa's role is operational, with its 50 per cent interest represented at the board level at each facility and holding key management positions.

Taqa said the partnership expands its power assets to 11,650 MW from 10,500 MW; and extends the company's energy value chain to power transmission and distribution.

"The closing of the transaction marks an important milestone in Taqa's global operations," said Peter Barker-Homek, chief executive officer of Taqa, in a company statement.

"This transaction demonstrates our strategic objective to deliver profitable growth in new and existing markets."

First step

This deal, Barker-Homek indicated, is just the first step in Taqa's plan to broaden its footprint in the Caribbean, through "acquisitions that offer stable cash flows", he said.

"The joint venture with Marubeni enhances our existing diversified energy portfolio and will act as a platform to explore multiple opportunities through long-term investment in the region."

This year, the company has budgeted capital expenditures of US$300 million to US$500 million, Reuters reported, quoting Barker-Homek, but says the final spend is dependent on the movements in crude oil prices.

Taqa's principal activities include power generation, water desalination and oil and gas production and storage.

lavern.clarke@gleanerjm.com