Blue Hill searches for $10m financing
NG Business Reporter
Published: Aug 12, 2011
Nearly $10 million in financing is being sought to keep Blue Hill’s water plant expansion on track, with supplier Consolidated Water confident on securing the funding.
The information was revealed in the Cayman-based company’s financials for the last three months ending June 30, 2011.
“We are seeking approximately $10 million in new financing for the planned expansion of our Blue Hills plant in The Bahamas,” said the unaudited statement. “We expect to obtain $10 million in new financing for the construction of this expansion and will fund the remainder of the estimated expansion costs from our existing cash balances.
“We believe we have a sufficient credit standing and adequate funding sources to obtain this new financing.”
The overall plan for the $70 to $80 million facility is to increase its daily production capacity by 67 percent, from 7.2 million U.S. gallons per day to 12 million U.S. gallons per day. CW reached an agreement with the Water and Sewerage Corporation to handle the project and increase the capacity. The firm is under contract to manage the plant until 2031.
The expansion is expected to create some $60 million in savings over a 20-year period, with a break down of around $3 million in savings a year.
The expansion of the plant is to facilitate water desalination.
CW operates sea water desalination plants and water distribution systems in various locations where access to natural supplies of drinking water is difficult or impossible. The desalination process removes some salt and other minerals from sea water to make it drinkable, and is expected to result in capital and annual cost savings.
CW-Bahamas’ water supply agreement with the Water and Sewerage Corporation of The Bahamas for the Blue Hills plant was amended in January. Both organizations have also agreed to extend the terms of the 20-year management contract of the Blue Hill plant by five years, taking it out to 2031.
Under the new terms, the company is being required to expand the production capacity of the Blue Hills plant on or before September 30, 2011.
Government appears to have made arrangements to make that company financially responsible for any delays that may occur during the process.
“If this expansion is not completed by November 1, 2011, we will be liable for liquidated damages at the rate of $5,000 for each day until the expansion is completed,” said the statement.
“After the expansion is completed, we will be required to deliver, and the WSC will be required to purchase, a minimum of 63 million U.S. gallons per week.”
|Last Updated on Friday, 12 August 2011 16:04|