Improved performance of the National Water Commission (NWC) is being touted as the likely outcome of a $15-billion local bond facility established for the water entity, through National Commercial Bank.
Prime Minister, Andrew Holness, in announcing the bond this morning said the
facility will help to transform the NWC into a viable asset for long-term investment. “Because the NWC is now a financially viable asset, it does not have to depend on government support or revenue,” Mr. Holness said.
Under the arrangement, which was facilitated through the National Commercial Bank Capital Markets Limited, the NWC will have immediate access to $12.51 billion to refinance specific foreign currency denominated loans and also provide funding of $3 billion to undertake a number of agreed capital projects across the nation in this financial year.
“We are now creating the NWC as an asset in which pension funds, and other such funds, like insurance funds, can invest,” Mr. Holness said at a press conference held at Jamaica House on Tuesday (May 15) to provide further details on the bond issue.
According to the Prime Minister the local bond issuance will now allow the NWC to refinance a significant portion of its high-interest rate foreign currency denominated loans, thus reducing the Commission’s exposure to foreign exchange losses.
The foreign exchange losses incurred by the company for the 2014 to 2017 period amounted to $5 billion.
The Prime Minister said that in making the NWC financially stronger, it will be able to take on more capital projects. He said a significant portion of the $15-billion bond will be used to finance capital projects, which include laying pipes, dealing with sewerage infrastructure, treatment and repairs.
The NWC has repeatedly lost money on its operations and depends on government subventions to carry out its business. It also nor ally requires government guarantees to carry out capital projects needed to improve its aging systems and operations riven with stealing or loss of its treated water.