Long Pond to di­ver­sify into en­ergy

Jamaica Gleaner - - BUSINESS - Neville Gra­ham Busi­ness Re­porter neville.gra­ham@glean­erjm.com

EVER­GLADES FARMS Limited wants to trans­form the Long Pond su­gar op­er­a­tion from one that strictly pro­cesses su­gar cane to in­cor­po­rate elec­tric­ity gen­er­a­tion un­der part­ner­ship with Amer­i­can firm, Ar­rakis De­vel­op­ment.

The pro­ject is ex­pected to cost US$42 mil­lion. If ap­proved, it would al­low the fail­ing su­gar pro­ducer to de­velop a new rev­enue stream.

CEO of Ever­glades, An­drew Hussey, says the part­ners pre­sented the tech­nol­ogy and de­vel­op­ment plans this sum­mer to the Min­istry of In­dus­try, Com­merce, Agri­cul­ture & Fish­eries (MICAF) as well as the Min­istry of En­ergy, Sci­ence and Tech­nol­ogy, and pro­vided pro­ject spe­cific in­for­ma­tion to the Elec­tric­ity Sec­tor En­ter­prise Team in Septem­ber.

“It’s a game-changer in that we will use the bagasse from the grind­ing of the su­gar cane as the main feed­stock to pro­duce elec­tric­ity,” said Hussey. “We will use the cane juice in a biodi­gester. This will ef­fec­tively mean a re­pur­pos­ing of the fa­cil­ity with a ma­jor in­vest­ment to do the con­ver­sion,” he said.

The Trelawny-based Long Pond fac­tory has been a loss­maker for the Hussey fam­ily since its acquisition from the state. The Ja­maican Gov­ern­ment re­cently in­ter­vened in the busi­ness to prop up the op­er­a­tions, say­ing it wanted to safe­guard around 1,000 jobs linked to the op­er­a­tion, and is ex­pected to in­ject nearly $300 mil­lion in the fac­tory, ac­cord­ing to dis­clo­sures made in Parliament.

Min­is­ter Karl Sa­muda, who heads MICAF, says he knows of the en­ergy pro­ject and is awaiting the out­come of dis­cus­sions the part­ners are hav­ing with en­ergy Ja­maica Pub­lic Ser­vice Com­pany and oth­ers.

Hussey told Gleaner Busi­ness that the section of the fac­tory that pro­duces su­gar will re­main, but that su­gar cane as

feed­stock for the co­gen­er­a­tion plant would take pri­or­ity.

Hussey says farm­ers will be en­cour­aged to plant other woody ma­te­rial, such as leu­caena, as a sup­ple­men­tary crop, and that the pro­ject was pre­sented to a re­cent meet­ing of the Trelawny Cane Farm­ers As­so­ci­a­tion.

CEO of Ar­rakis De­vel­op­ment, Bryan Tam­burro, says the tech­nol­ogy em­ployed will sep­a­rate the cane feed­stock into its two ma­jor con­stituents — bagasse and cane juice. The bagasse will

be com­busted in biomass boil­ers to pro­duce high pres­sure steam, which will then drive a steam turbine to pro­duce elec­tric­ity. Tam­burro said the su­gar or su­crose con­tent in the cane juice will be con­verted to bio­gas us­ing anaer­o­bic tech­nol­ogy via bio-di­gesters.

The bio­gas will be used to run an en­gine to power a gen­er­a­tor that pro­duces be­tween 4.4 MW to 4.6 MW of elec­tric­ity. To­tal power gen­er­a­tion is ex­pected to be 14 megawatts.

“Ar­rakis pro­vides power so­lu­tions that other in­vestors will not even look at. The size of 14 megawatts fits our busi­ness model per­fectly and we re­ally want to fo­cus on the most eco­nom­i­cal, vi­able op­tions for the lo­cal mar­ket. The fact that this is re­new­able makes it even more at­trac­tive,” Tam­burro told Gleaner Busi­ness.

Hussey says the part­ners plan to en­ter into a power pur­chase agreement (PPA) with mo­nop­oly power dis­trib­u­tor Ja­maica Pub­lic Ser­vice Com­pany (JPS) and is awaiting the green light from the Of­fice of Util­i­ties Reg­u­la­tion (OUR).

“Dis­cus­sions have started with JPS, and we’ve writ­ten to the OUR and they have asked for more in­for­ma­tion. So far, ev­ery­thing has been favourable by way of re­sponses. We are hop­ing to have a PPA in place in short or­der and once we have that it will be the start point that will trig­ger the in­volve­ment of the in­vestors to pro­vide find­ing and it will be the start point of

the build-out that will take two years,” Hussey said.

Tam­burro said Ar­rakis would raise the cap­i­tal to fi­nance the plant, once the PPA is ap­proved, while Hussey noted that Ever­glades’ con­tri­bu­tion would be the su­gar as­sets and in­fra­struc­ture it cur­rently has on the ground.

The pro­posed en­ergy op­er­a­tion will be run by a com­pany to be cre­ated by Ever­glades and Ar­rakis, but nei­ther part­ner would say how the own­er­ship would be split.

“We be­lieve that this is a very prac­ti­cal pro­ject that is eco­nom­i­cally vi­able and en­vi­ron­men­tally friendly. It checks a lot of boxes. As of now we want that PPA to be in place so that we can move for­ward,” Tam­burro said.

Ar­rakis De­vel­op­ment LLC op­er­ates out of Wex­ford, Penn­syl­va­nia. It is a pri­vately held in­fra­struc­ture pro­ject de­vel­op­ment com­pany headed by Tam­burro and Jim Crisanti as managing part­ners. They spe­cialise in power gen­er­a­tion and wa­ter pos­sess­ing projects pri­mar­ily in the Caribbean and Latin Amer­i­can mar­kets.

Both men have worked jointly and sep­a­rately on projects in Panama, In­done­sia and China.

The Long Pond su­gar fac­tory in Clarks Town, Trelawny.

An­drew Hussey, CEO of Ever­glades Farms Limited.

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