Paradise Park goes up for sale

Eight Rivers Energy Company Limited, the company that owns the 51.5 MWp solar power plant at Paradise Park, Westmoreland, Jamaica, is going up for sale, together with MPC Caribbean Clean Energy Limited (MPCCEL), a company listed on the Jamaica Stock Exchange (JSE), to sell its stake in the renewable energy assets.

This was announced on Wednesday by MPCCEL, which confirmed that it would sell its stake in the company and that the transaction should be completed in the first quarter (January to March) of 2025. The solar park was also named Paradise Park and generated 82,486,750 euros. kWh of power in 2023 at a cost of US$0.095 per kWh according to MPCCEL’s 2023 annual report. It commenced operations in June 2019 under a twenty-year power purchase agreement (PPA) with the Jamaica Public Service Company Limited (JPS).

“The majority shareholder has issued a letter of intent to proceed with a sale process to third parties in respect of their equity interest in the project. Therefore, upon receipt of the final binding offer together with the notification regarding the tag-along right, the board of directors of MPC Caribbean Clean Energy Limited has agreed to exercise its tag-along rights to participate in the sale,” the MPCCEL disclosure said.

Erec Investment Limited, a Barbadian International Business Company (IBC), owns 49.99 percent of Eight Rivers, while Neoen Holdings Jamaica, a French company and subsidiary of Neon, owns the 50.01 percent stake in Eight Rivers. Following a recent reorganization between MPCCEL and Cayman Islands-based MPC Caribbean Clean Energy Fund LLC, MPCCEL is the direct owner of a 68.8 percent stake in Erec Investment. It was previously reported that Rekamniar Capital Limited, a related United Kingdom (UK) company to Angella Rainford-founded Rekamniar Frontier Ventures, was a shareholder in Eight Rivers. Rainford was involved in the conceptualization and creation of Paradise Park.

Although the new owner of Eight Rivers is not yet known, details about the company can be obtained from the Companies Office of Jamaica filings. Paradise Park was developed at a cost of US$64 million and received US$48.5 million in project financing from PROPARCO, a French development finance institution, together with FMO, the Dutch development bank.

The February 2019 annualized return showed Eight Rivers had $47.385 million in debt, which had fallen to $38.57 million as of February 2024. Based on the energy produced in 2023, Paradise Park would have generated an estimated $7.84 million in revenue for the period. Its performance ratio also stood at 75.60 percent in 2023, meaning it generated 75 percent renewable energy compared to the theoretical maximum production in the period. The total radiation in 2023 was 2,074.41 kWh/m2.

Paradise Park is also the largest producer of photovoltaic or solar energy in Jamaica, ahead of Content Solar in Content, Clarendon, with an installed capacity of 28.5 MW. If the Generation Procurement Entity (GPE) approves the two current bids as final, Wigton Energy Limited (formerly Wigton Windfarm Limited) and SunTerra Energy Jamaica Limited would build solar farms with 49.83 MW and 50 MW of installed capacity respectively.

With the sale of Paradise Park, MPCCEL would no longer have any renewable energy assets in Jamaica. It would continue to benefit from the 21MW Tilawind wind farm in Guanacaste, Costa Rica; the 6.4 MWp solar farm in San Isidro, El Salvador, and the 33.3894 MW first phase of Monte Plata, Dominican Republic, and the 40.5 MW second phase of Monte Plata.

MPCCEL’s third quarter unaudited report is due by November 14. The company previously held all of its renewable energy investments through MPC Caribbean Clean Energy Fund LLC, in which it had an 85.69 percent stake. However, following the completion of the structural reorganization on September 25, MPCCEL now directly owns all its renewable energy investments. A consequence of this reorganization is the issuance of 5,278,319 additional Class B shares at a cost of US$0.877 per share to MPC CCEF Participation GmbH, a nominated company ultimately owned by MPC Capital AG. This increased MPC Capital AG’s stake to 5,970,140 class B shares, of which 22.16 percent of the issued class B shares.

According to a notice on the Trinidad and Tobago Stock Exchange (TTSE), these additional shares were listed on the stock market on November 7 and became effective on November 8. As a result, the number of shares issued has shifted from 21,666,542 Class B shares to 26,944,861. class B shares. The increased shares are also reflected on the Jamaica Stock Exchange (JSE).

While the company has not yet announced what it will do with the proceeds from the sale of Paradise Park, the company could be considering its second dividend after last paying a $1.93 million dividend in September 2019.

MPCCEL closed at $84.30 on Thursday, leaving the Jamaican dollar down six percent in 2024, while the US dollar ended Thursday at $0.6097, putting its value up seven percent year to date. Neoen ended Thursday at €39.41, up 35 percent year to date with a market capitalization of €6.02 billion.

Regulators’ approvals for the acquisition of a 53.12 percent stake in Neoen by Singapore’s Brookfield Renewable Partners and Temasek Holdings continue to proceed normally. Neoen will have to divest its renewable energy assets in Victoria, Australia, which consists of 652 MW of assets in operation and 2.8 GW of projects under development. The deal is expected to be completed by the end of 2024, while the public tender to other shareholders will take place in 2025. Neoen is acquired for € 39.85, which was a premium of 27 percent compared to the closing price of May 29.