Jamaica, like many countries in the region, faces significant infrastructure deficits in key sectors such as transport, energy, water, telecommunications, and social services. According to the Inter-American Development Bank (IDB), the infrastructure investment gap in Latin America and the Caribbean is estimated at US$150 billion per year.
The country possesses productive assets such as natural harbor capacity and world-class beaches. Global investors can bring competition and expertise into these industries to propel economic growth.
While the Government of Jamaica recognizes the need to expand and modernize its infrastructure, tight fiscal conditions hinder development efforts. To bridge this gap, the government has supported an active Public-Private Partnerships (PPP) and Privatization (P4) Programme through the Development Bank of Jamaica (DBJ).
The World Bank assisted with this challenge through the Foundations for Competitiveness and Growth Project, helping attract private investments in key infrastructure assets via PPPs and divestments. By March 30, 2024, US$520 million in private capital had been mobilized, surpassing the initial target of US$200 million.
“My administration believes in working collaboratively with the private sector and in mobilizing private capital and expertise through Public-Private Partnerships to address Jamaica's infrastructure challenges,” said Hon. Andrew Holness, Jamaica’s Prime Minister. “We have successfully used PPPs to develop our airports, our seaports and highways, as we have used it in power generation,” he added.
Successful transactions under this project include:
- Rio Cobre Water Treatment Plant (PPP): A new US$65 million water treatment plant will be constructed under a Design, Build, Finance, Operate and Maintain PPP arrangement. It will benefit 150,000 customers by producing 15 million imperial gallons of water per day.
- Wigton Windfarm Limited (Stock Exchange Listing): The sale of all government shares via an Offer for Sale on the Jamaica Stock Exchange resulted in reflows of US$90M to the government. This transaction broadened ownership among more than 30,000 shareholders.
- Caymanas Track Limited (Lease): This lease facilitated modernization of horse racing operations since 2017. The private investor upgraded assets and operations while increasing government revenue through lease payments and taxes.
- Greater Bernard Lodge Development Asset Sales: This privatization project aims to identify suitable partners for developing various blocks. Expected capital investments exceed US$243 million across three largely completed phases.
These investments were attracted by financing studies and providing critical technical assistance targeting both foreign and local investors. The project also enhanced DBJ's capacity to execute privatization programs effectively.
Jamaica’s Minister of Finance and Public Service Hon. Nigel Clarke stated that “the PPP and Privatization Programme continues to be a priority for the government as it facilitates private sector investments in public infrastructure.” He noted that this allows "the government to redirect limited resources to other areas of the economy."
Through technical assistance provided by the project, DBJ expanded its public-private partnership program while engaging stakeholders effectively. Similarly, tools for PPP Fiscal Risk Management were fortified within the Ministry of Finance's PPP Unit.
"The government’s clear vision and strong commitment...led to results we’ve seen," said Lilia Burunciuc, World Bank Director for the Caribbean.
Though this project concluded in March 2024, a new Project Preparation Facility initiated by Jamaica's Government with IADB funding was launched in November 2023. This facility incorporates lessons from previous experiences.
Going forward, efforts will continue to strengthen capacity for managing PPP contracts ensuring efficient risk management.