Proparco finances the Rio Cobre Water Treatment Plant, with IDB Invest and key local partners in Jamaica

The Rio Cobre Water Treatment Plant will improve access to reliable potable water for communities in the Kingston Metropolitan Area and parts of St. Catherine. This critical Project will address growing demand, enhance water reliability, and strengthen the region’s resilience to climate change, significantly benefiting over 600,000 Jamaicans through the daily supply of 15 million imperial gallons of water.

The Project, with a total financing of US $79 million, for which Proparco provided a US $30 million loan, aims to ensure a dependable water supply for thousands of households in the target areas. The availability of water is essential for improving the population’s quality of life, health, social and gender inclusion, productivity, environmental sustainability and economic growth.

The Project is a public-private partnership agreement between the National Water Commission and Rio Cobre Water Limited, a special purpose vehicle comprised of Vinci Construction Grands Projects, long-standing partner of Proparco as well as a global leader in large-scale infrastructure engineering and construction and Capital Infrastructure Group, a regional infrastructure investment vehicle co-managed by Pan Jamaica Group Limited and Eppley Limited.

The Hon. Matthew Samuda, Minister without Portfolio in the Ministry of Economic Growth and Job Creation, who has portfolio responsibility for Water, Environment, Climate Change and the Blue & Green Economies was present at the signing of the financing agreement alongside key representatives from the National Water Commission. Proparco (French Development Finance Institution) along with IDB Invest, Sagicor Bank Jamaica Limited, and the Development Bank of Jamaica, successfully provided long-term secured financing for up to $12 billion Jamaican Dollars (JMD) with an extended repayment period of up to 20 years, terms previously unavailable in the local market and specifically designed to ensure affordable water tariffs for Jamaicans.

In order to align with WPA local currency payments, Proparco relies on TCX to provide a non-deliverable USD/JMD cross-currency swap with a 20-year maturity, removing the currency risk from the investment. TCX has provided currency risk solutions in Jamaica for a long time and  has been able to propose very competitive conditions and pricings for this operation.

TCX is a global development finance initiative that Proparco has contributed to financing in 2022, which offers long-term hedging instruments in over 100 countries where such products are not available or poorly accessible. The Fund started operations in 2007 and has since then de-risked development finance investments with a total volume of well over USD 16 bn, spread over 5,000+ transactions.

The Project is expected to contribute to several of the United Nations’ Sustainable Development Goals (SDGs), specifically: (SDG 6) Clean Water and Sanitation for all; (SDG 8) Decent Work and Economic Growth (SDG 13) Action to combat Climate Change and its Impacts. Though this partnership, Proparco reaffirms its commitment to promoting a green and inclusive growth across Latin America and the Caribbean.