Our latest news on local and international activity
Toronto, Canada – November 14, 2017 – In May 2017, JCM Power launched its Asian platform, partnering with the JS Group through its acquisition of an interest in the 50MW Hawa wind farm located in Jhimpir, Pakistan. The project, which is co-owned by Pakistan’s JS Group, is currently under construction and is expected to reach commercial operation in Q1 2018. OPIC, the US development bank, is providing debt financing for the project. In addition to the Hawa wind farm, JCM is also exploring the development of other power projects in Pakistan as part of its Asian platform.
“We are thrilled to enter into this partnership with the JS Group and form the beginnings of a successful renewable energy platform in Pakistan,” said Justin Woodward, JCM’s Head of Africa & Asia Region. “These projects will replace thermal generation and avoid hundreds of thousands of tons of carbon dioxide per year. They will also create local jobs and improve energy access for millions of Pakistanis.”
Historically, Pakistan has been a net importer of energy, with oil imports placing a heavy burden on foreign exchange reserves – a problem that is further compounded by volatile oil prices and rising energy consumption. In response to these challenges, the national and provincial governments of Pakistan have made energy generation a high priority, with an emphasis on alternative energy sources such as solar and wind power.
“JS and JCM share the common desire to ‘Advance the Clean Energy Age’ which makes us a great fit for each other,” said Ali Syed, CEO of JS Power/Energy. “Our renewable projects portfolio in Pakistan will strengthen the economy by reducing the current energy crisis the country is facing and have a positive impact on local communities around our project sites by providing employment, health and education services. We do not see it as just two organizations joining hands, but two nations (Canadians and Pakistanis) coming together to build a cleaner world.”
Seizing the opportunity presented by rapid renewable energy and IPP growth in Pakistan, JCM has entered into strategic partnerships with local stakeholders. JCM’s participation in the Hawa Wind Power Project is the company’s initial investment in Asia, while it plans to increase its pipeline to include as much as 300MW of wind and solar projects in Pakistan and to expand its presence through the emerging Asian energy market.
About JCM Power
JCM Power is an independent power producer (IPP) dedicated to accelerating social, economic and environmental sustainability in growth markets through the development, construction and operation of renewable energy infrastructure. Our driving vision is to advance the clean energy age.
About JS Group
JS Group is a leading Pakistani investment and industrial group, headquartered in Karachi. It also invests internationally, with a focus on emerging markets, through its Dubai and London offices. JS Group’s core financial services business was founded in 1970 and has grown to become one of Pakistan’s leading banking and non-banking financial services groups. JS Power was established in 2013 to invest in clean power generation.
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Djermaya Solar, through the support of Private Infrastructure Development Group (PIDG), has received approval for EUR 6,350,000 investment grant from the European Union Africa Infrastructure Trust Fund (EU-AITF) for the build out of a transmission line, substation and electrical works required for system integration. EU-AITF was created in 2007 by the European Commission and European Union Member States with the objective of promoting infrastructure projects in Sub-Saharan Africa with a regional impact. EU-AITF is funded by a group of donor contributions from the European Development Fund (EDF) budget and from a number of European Union Member States. The investment grant has been approved under the SE4ALL envelope which promotes regional, national and local energy projects. The objective of the Sustainable Energy for All (SE4ALL) envelope of the EU-AITF is to support inter alia increased power generation from renewable energy and increased access to electricity, which match the objectives of this project. As the first utility scale solar project in the country, the project will contribute towards an increased universal access to modern energy services. Additionally, the project conforms to the objective to promote investment in regional infrastructure in Sub-Saharan Africa.
Federal government-owned public utility, the Nigerian Bulk Electricity Trading (NBET), has signed the country’s first ever solar power purchase agreement (PPA) with more than ten project developers, totaling 975MW of utility-scale solar. The first official project to be implemented under the 20-year PPA is a 96MWdc solar plant in Katsina state, to be developed by Pan Africa Solar, in collaboration with JCM Power (formerly JCM Capital), an Ontario-based developer. According to JCM Power’s Chief Development Officer, Justin Woodward, the project’s capital cost is approximately US$146 million and is expected to hit financial close in mid 2017. The signing of the PPA with the federal government of Nigeria is a significant breakthrough for the project, which has been under development since 2011. It also features single axis trackers and is being financed by the Netherlands Development Finance Company (FMO) as the leading debt syndicate. Also according to Woodward, the plant will sell power at a fixed rate of US$11.5¢/kWh.
The commissioning of the Katsina project is a giant step forward for Nigeria’s solar progress; constituting the largest plant of its kind in Sub-Saharan Africa, (excluding South Africa, which has seen many successful tenders as of late), and is set to provide enough clean electricity to power 1.1 million Nigerian homes.
Pan Africa Solar, through the support of Private Infrastructure Development Group (PIDG), has received approval for EUR 4,000,000 investment grant from the European Union Africa Infrastructure Trust Fund (EU-AITF) for the construction of a transmission line to connect the solar generation plant to the main substation and upgrades to the substation. EU-AITF was created in 2007 by the European Commission and European Union Member States with the objective of promoting infrastructure projects in Sub-Saharan Africa with a regional impact. EU-AITF is funded by a group of donor contributions from the European Development Fund (EDF) budget and from a number of European Union Member States. The investment grant has been approved under the SE4ALL envelope which promotes regional, national and local energy projects. The objective of the Sustainable Energy for All (SE4ALL) envelope of the EU-AITF is to support inter alia increased power generation from renewable energy and increased access to electricity, which match the objectives of this project. As the first utility scale solar project in the country, the project will contribute towards an increased universal access to modern energy services. Additionally, the project conforms to the objective to promote investment in regional infrastructure in Sub-Saharan Africa.
JCM Capital announced today that it has successfully reached a first closing as part of a USD $50 million private placement offering. The proceeds of the offering are being used to provide construction and long-term equity financing for solar photovoltaic projects located in emerging markets.
JCM’s diversified development portfolio of clean energy projects is comprised of over 500 MW in utility scale solar photovoltaic projects and 2,000 MW of high-voltage direct current (HVDC) transmission projects. The first-close proceeds provide the necessary capital for JCM to fund the construction of three solar photovoltaic projects that are scheduled to reach financial close during 2016 and 2017. World-class development partners currently supporting projects within JCM’s development portfolio include the African Development Bank, FMO, the United Nations Environment Programme, Seed Capital Assistance Facility and Power Africa.
JCM began developing projects under a USD $20 million clean power development initiative in 2013. The initiative focuses on developing high impact clean power projects in emerging markets, with a focus in Sub-Saharan Africa and Latin America. Several of the projects are expected to be the first utility-scale solar photovoltaic projects constructed in their respective countries. The initiative will contribute significantly towards meeting aggressive renewable energy goals pledged by the various host nations in Paris during the COP 21 conference.
JCM anticipates closing on the remainder of the private placement in 2016.
The Sustainable Energy Fund for Africa (SEFA) approved at the end of 2014 a USD 777,000 preparation grant for JCM Greenquest Solar Corporation to support the development of a 72 MW Solar Photovoltaic (PV) power plant as the first renewable energy Independent Power Producer (IPP) in Cameroon. The SEFA grant will finance environmental and social impact assessments and the cost related to the technical, legal and financial advisory services.
Despite Cameroon’s abundant resource potential and availability of conventional (oil and gas) and renewable (hydro and solar) resources, Cameroon’s energy access rate is very low for the continent, standing at only 18% in 2013. The country’s installed capacity of 1,400 MW is largely based on hydropower (60%), which fluctuates greatly during the drought season forcing Cameroon to rely on expensive emergency thermal units. While there are plans for some large hydropower development, the implementation of solar PV will deliver power on much shorter timelines than hydro (lead time of less than two years versus four to six years for hydro) and provide a long-term predictable source of electricity over the next 25 years. The JCM project will additionally help diversify the energy mix in the country using a renewable source, drive savings in fuel imports by reducing the need for emergency thermal units which are currently operating at maximum capacity, while at the same time lowering Cameroon’s overall carbon energy footprint.
The Government has created a long-term Energy Sector Development Plan (PDSE 2030), calling for a 75% electrification rate by 2030 and established an order for the implementation of Independent Power Producers (IPPs), thus provide a strong signal for private participation in renewable energy projects in Cameroon. The project additionally supports the Cameroon’s Growth and Employment Strategy (2010-2020) with the goal to reduce the cost of electricity production and diversify Cameroon’s sources of electricity generation.
According to Alex Rugamba, Director of the African Development Bank’s Energy, Environment and Climate Change Department, “this support will be critical in delivering Cameroon’s first renewable energy IPP and its success will have significant demonstration effects in the country’s power sector and the continent at large.”
“We welcome the support of the AfDB as we work with the Government of Cameroon to help them achieve their energy policy goals. As the first renewable energy IPP in the country, we believe this project will jump start the development of renewables in Cameroon and attract significant investment to the clean energy sector,” said Michael Strait, Managing Director, Development Group, JCM Capital.
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On July 7, 2014, EY announced that JCM Capital is one of the finalists for the 2014 Ontario Entrepreneur of the Year award. Entrepreneur of the Year celebrates the contribution and spirit of entrepreneurs everywhere. The Canadian program is in its 21st year of honouring the country's most impressive entrepreneurs from all areas of business. Award finalists are chosen based on their vision, leadership, financial success and social responsibility. The Ontario winners will be announced at a gala on October 29, 2014. The overall Ontario winner will represent the region at the national gala held in Toronto on November 25, 2014.
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What is your business model? We have set up four funds and are in the middle of a new fifth fund. The first four are development funds, involving obtaining all of the contracting approvals leading up to construction, including power purchase agreements, land rights, interconnection agreement and environmental assessments. Once a project reaches financial close, historically, we’ve brought in large infrastructure partners in order to capitalize project construction and operation. The purpose of the new fund is to be able to participate in the financing of both our own projects and third party projects at the construction phase.
So historically you have exited at the financial close? Historically our development funds would almost entirely own the project up until financial close, and then the fund would either exit completely or hold a carried interest, with the vast majority of control going over to a new infrastructure partner.
Do you work with partners in different countries? What’s important to us is that there’s a local team with a reasonable combination of solar generation development capability and also regulatory and governmental capabilities. We use both multinational companies to provide service and local ones. For example Trinity Law services are provided out of London and we are talking to EY (Ernst & Young) to provide tax services. But we also engage with local councils in the various countries and local expertise for specifically local issues – so a bit of both.
How do you get the projects? We receive a very high volume of potential development projects coming to the office and have a whole system to deal with them. We have an extensive network of developers, financiers, EPC companies, the whole gamut of what it takes to run a solar project. Those relationships are round the world, with global players that we originally met in Canada (where there are many), as well as those operating elsewhere. I think what’s critical is there is only a certain number of solar development companies that have the expertise, capitalization and shareholder appetite to go into developing countries and develop solar. We offer a fairly unique value proposition of enabling and going in and doing that in these markets, combined with our extensive network around the world, which means we receive a lot of deal flow. There is quite a bit of capital available out there at financial close, but not a lot out there for development works. The combination of early stage risk that we take on and the markets we operate in makes us quite unique.
How do you choose projects? We would screen the deal flow based on a variety of factors: marginal cost of new build, solar economics, if a local team is in place or not, extent of staff-up needed. We provide not only capital but development expertise. We would not pay a local developer for a construction-ready site. We are assessing the risk of getting it to financial close, depending on the number and scale of obstacles it faces. Conventional risk return analysis, with a whole bunch of factors: government position on renewables, how much do they need capacity, competing forms of generation, price points, regulatory and legal regime and so on.
How do you establish a local presence: through an equity stake in a local company or joint ventures, or in-house staff? It is a combination of these. Usually they come onto our payroll and we control the ownership of the project. There is always a local team, and on many projects we would add to that team.
Do you use geographical spread to mitigate political risk? The first project was in Ecuador – this was a one-project fund, but it was the first in developing markets. Developed markets have been challenging for renewable power development, so more business is going to developing markets and will increasingly do so. As we go into more and more developing countries, this diversifies and cuts the risk.
Are you varying renewable type to cut risk – for example the Lake Erie HVDC project? That was an opportunistic investment. When we are growing like this, expansion into new geographies requires development of new skill sets. For the time being we are focusing on solar because we are real experts in that. We will take that expertise into new geographies. We may move away from solar in the future, but one step at a time.
How does the new infrastructure fund vary from your earlier development funds? The new infrastructure fund will be much less risky, although there will still be debate over which projects are in and which are out. There is more competing capital. While at the development stage there may be five projects for every one that makes it, with the infrastructure fund once everything is in place these projects should all go ahead. There is an execution risk, but this is much lower and requires a different capital structure and a different type of investor as well. A good infrastructure fund will invest in projects where all the risk that can be has been transferred to the government or other entities. Ongoing operating and political risk can be structured away and still get emerging market returns.
Who are your main investors? For the development funds it has been largely high net worth and ultra-high net worth individuals mostly from North America and Europe and some from Asia. We are in the very early stages of raising the infrastructure fund. We have a $10 million fund from an Asian investor, plus a $25 million warehousing facility pending the fund being raised. We are talking to the institutional type investor that you would expect in order to raise the fund, but it’s too early yet to know who they will be.
How do you mitigate against risks? We offload any risk we are not happy taking. So we normally take on fully wrapped EPC and O&M contracts, warranties and guarantees and hedge currency risk. Political risk should be dealt with at the infrastructure stage within the PPA, along with sovereign guarantees and insurance. If I had to summarize JCM’s core strengths, one would be that we can pull together the appropriate team (over 70 projects already), and secondly we can structure the deals and contracts to ensure that risk is properly allocated. So JCM only ends up holding the risks that we can best manage and others get the risks that they can manage.
Any other key risks? The novelty of these projects means timing and deadlines can be uncertain, so we watch out for that. We must make sure projects are squeaky clean, and that there is nothing that goes anywhere near corruption, so you must be most careful in picking partners and countries.
JCM Capital (JCM) announced today that it has established a company in Mexico to invest in utility-scale ground based solar photovoltaic (PV) projects. The company will focus on projects of 20MW and larger, and is actively seeking suitable project sites and development partners.
JCM is looking to invest with municipal and state governments to provide solar energy through direct Power Purchase Agreements. JCM will also partner with corporations to provide an alternative source of power at a competitive rate that will provide cost reductions over a 25-year period.
JCM will fund project specific development costs such as land acquisition, engineering, legal advisors, permitting and interconnection studies. JCM will facilitate sustainable economic development in an environmentally responsible way and bring cleaner, more affordable electricity to governments and businesses.
JCM's Executive VP, Justin Woodward, comments that, "This company is a key part of our corporate strategy to grow our business internationally. We anticipate that Mexico will have explosive growth potential considering its high irradiance levels and the increasing cost of energy."
JCM has a current target to fund and develop an initial 100MW of projects in Mexico. Michael Strait, JCM's COO, comments, "JCM has the necessary capital, construction and long-term financial partners, as well as solar PV expertise to complement our local partners' market knowledge and project management capabilities."
JCM announced today that it has sold an 850 kW portfolio of rooftop solar PV projects in Ontario. The projects were originated, developed and financed to commercial operation by JCM. The buyer of the projects is BrightRoof Solar LP, a long-term owner of Ontario solar assets.to late-stage financing for solarrooftop portfolios.
The portfolio consists of systems located on three commercial buildings, in Mississauga, Guelph and Kitchener, ON. All systems are scheduled to be in service by the end of the year, and the electricity they generate will be sold to the Ontario Power Authority under 20-year Feed-In Tariff (FIT) contracts.
"We are very pleased with this sale. BrightRoof is an ideal buyer for these projects, and will be a strong, reliable partner for the building owners over the life of the contracts," said Christian Wray, CEO of JCM.
The projects are the first to be built under JCM's strategic partnership with Panasonic Eco Solutions Canada, which is the EPC contractor, and is supplying 3,160 Panasonic SCI 250M/300M crystalline solar modules that were manufactured in Don Mills, Ontario. The projects will provide enough clean energy to power 110 homes, while offsetting 675 metric tons of harmful CO2 from being released into the earth's atmosphere each year - the equivalent of removing 130 cars from the road.
"We are pleased to be working with JCM and Panasonic on these three projects, and expect that the Panasonic systems will provide reliable performance for the life of the FIT contracts," said David Oxtoby, a director of BrightRoof Solar LP.