Jamaican Energy Program Shows Benefits of Public Private Partnerships

The Jamaican government announced its plan on February 11 to implement a $30 million Energy Management and Efficiency Program (EMEP). This program promotes energy efficiency and seeks to facilitate cooperation between the public and private sectors. The EMEP will be funded by the Inter-American Development Bank (IDB) and the Japan International Cooperation Agency. This is not the first time the Jamaican government has joined forces with private enterprises. Andrew Wheatley, the minister of science and technology, presented a $7 million solar photovoltaic system at the Wolmer’s Girls School in Kingston on February 11. The Petroleum Corporation of Jamaica, a quasi-governmental corporation under the Ministry of Energy, installed the system. This new technology reduces the school’s electricity bill by approximately $474,000 per year.

While presenting the photovoltaic system, Wheatley mentioned the benefits of Private-Public Partnerships (PPPs). “The Petroleum Corporation of Jamaica and Government are aware of the importance of energy security and efficiency in driving development...and [have a] shared commitment to bringing all public entities up to competitive standards in energy efficiency and conservation,” he said.

Countries in the Caribbean face the challenge of attempting to improve their poor infrastructure despite their limited economic capabilities. As in Jamaica, the economies of the Caribbean mostly rely on tourism and a few key exports. Thus, Caribbean governments struggle to improve their infrastructure while simultaneously dealing with high debt burdens, tight budgets, and declining terms of trade.

In recent years, PPPs have emerged in the Caribbean as a solution to shrink the infrastructure gap. Combining private management and financing with public support, these partnerships incentivize governments to work towards infrastructure improvements.

The IDB, for example, cites itself as the leading source of development financing for Latin America and the Caribbean. As an enterprise, it provides loans, grants, and technical assistance to central governments. In Jamaica alone, the IDB has already completed 363 projects and, as with the EMEP, still continues to support the government’s developmental agenda.

Nevertheless, certain risks accompany the use of PPPs. Some argue that governmental dependence on PPPs reduces competition between parties, resulting in the failure to attract qualified bids, poor values, and low incentives. Also, by merging the private and public sectors, PPPs leave governments with policy inflexibility and limit their control over resources.

The Jamaica Civil Society Coalition, a non-profit, non-partisan group, has criticized the government before due to its dependence on PPPs. “It appears instead that Jamaica has no plan of its own, but is prepared to go wherever the investor wind blows. This is no way for a country to manage its resources,” the organization stated. As one of the leading economies in the Caribbean, Jamaica owes much of its success to its mastery of PPPs.The EMEP is just the most recent example of how Jamaica’s government continues to better its economy with the assistance of private corporations. Opposition groups, however, do raise a valid concern about the government’s control over the country’s resources. Whether through PPPs or other public policy measures, countries in the Caribbean need to work towards improving their infrastructure in order to continue developing as stable economies. Jamaica, therefore, is a fine example of learning about options and striving for increased development progress.