Nevis Nice wrote:
his phase will yield a 10 MW plant, and trigger the US$55MM drawdown of the guaranteed loan. US$15MM will go toward the electrical interconnection of the geothermal plant with the Nevlec system at Prospect. US$40MM will go toward drilling two more production wells and an injection well.
That's an interesting setup. If I understand correctly, WIP only invests $8M to get all the benefits of a $60M project. I'm not saying $8M is nothing but somehow the figures don't seem to be right. Even if everything goes just fine, NIA doesn't seem to be compensated for the huge risk it's taking. I've read somewhere that NIA gets 5% royalty from WIP for all sold electricity. When taking the majority of the risk, that number sounds low.
Of course, overall it's a project what the whole island benefits from and that should be put into the equation too.
If the unthinkable happen and say the drills cause earthquakes (like they did in Switzerland) and can't be used at all, NIA and Nevisians will hold the bill, WIP's loss would be limited to it's $8M investment.
I really want this project to happen, but probably months before election is not the right time to negotiate such complex and long lasting transaction.