STONEY GROVE, Nevis - SHOUTS of joy filled the atmosphere last evening (Apr. 28) when the Nevis Island Administration (NIA) and West Indies Power (Nevis) Ltd. (WIPN), the company developing geothermal power on the island, signed a historic contract and agreement at a ceremony held at the Nevis Netball Complex.
The details of the agreement were announced by the island’s Legal Adviser, Patrice Nisbett, who said that Nevisians would get 10 percent of the shares in WIPN and an option to purchase a further 10 percent of the common stock of the company.
Also guaranteed in the agreement is a royalty payment valued at five percent of the gross domestic revenue and seven and a half percent of revenue accrued from products exported by the WIPN. Nevisians will also benefit from a potential 20 percent in the company and its distribution of profits.
Nisbett told the gathering that the Geothermal Resources Contract grants a permit, a licence and concessions to WIPN to do reconnaissance, exploration, drilling and steam production activities in the geothermal areas of Spring Hill and Upper Jessups for a period of two years.
Also negotiated are a number of incentives to WIPN which is consistent with the government’s policy to encourage development and investment in the economy that the incentives were offered. WIPN has been granted a 25-year tax free holiday.
The Legal Adviser further said that WIPN is to post a performance bond to NIA in the sum of US$125 000 to ensure the reclamation of each geothermal resource area and to ensure that any damage done to the site could be repaired by land reclamation in the future.
In addition to the performance bond, WIPN will put in a performance bond of $US20 000 for each well that is drilled. All export of geothermal energy will necessitate a payment of five percent of earnings to the Nevis Island Government. The concession also gives the right to export energy outside the Federation with a caveat to ensure that both Nevis and St. Kitts are looked after and provided.
Nisbett said the contract also puts obligations on the concessionaire to ensure that there is adequate capacity for Nevis and St. Kitts long-term security as far as energy is concerned. WIPN has the obligations under the contract to perform the geothermal functions with time line and verification procedures in accordance with tight monitoring and environmental standards satisfactory to international standards.
