West Indies Power Nevis to appeal geothermal contract court ruling

CHARLESTOWN, Nevis, Monday January 21, 2013 – The Netherlands Antilles-based West Indies Power Nevis (WIPN) says it is appealing a recent court ruling that the Nevis Island Administration (NIA) says allows it to now cancel its contract to develop geothermal energy on the island.

The NIA in a statement over the weekend said that as a result of the court ruling, it is now free to pursue the development of geothermal energy with other interested parties than the WIPN.

But WIPN manager Kerry McDonald said that the NIA has mis-interpreted the court ruling and “that it did not cancel the license of WIPN to develop the geothermal resources on the island.

“NIA wanted a declaration that WIPN could not pay its bills. The court gave such a declaration which we are totally upset about…because there is no evidence or fact to prove that…and because of that we have spoken to our attorneys to file an appeal,” McDonald said.

“The significant part about this is that the court specifically said that this was just a declaration and it did not cancel the license of WIPN…,” he added.

But Energy Minister Carlisle Powell said what the court ruling means “is that the slate is clear for us to move forward again.

“We signed an agreement with WIPN and they were not able to complete the project as per agreement which we had and so we, the NIA, took the step that it was in the best interest of the people of Nevis to seek to terminate the agreement which we did by going to court and looking to get control of the geothermal interest in Nevis under the government once again which would clear the slate and allow us to move forward with a new developer,” he said.

Powell said that while the NIA will not rush back into an agreement to develop the sector, it has had interest from other parties.

“We think what we should do is take our time about geothermal power in Nevis,” he said, adding “we are still interested in developing geothermal power and we still see geothermal power as being to the greater good to the people of Nevis”.

Last year, the NIA filed suit in the Nevis High Court to have WIPN declared insolvent and according to the court documents, the NIA is using the court to get out of its deal with the cash-strapped WIPN and have its exclusive license to produce geothermal energy on the island revoked.  NIA claimed that the company is indebted to a number of companies.

The exploration for geothermal energy began here in 2007 after the NIPA secured a 25-year power-purchase agreement with the NIA.

In April 2011 the NIA approved a resolution guaranteeing a US$57 million loan for WIPN from Ex-Im Bank of Washington for the construction of an 8.5 megawatt power plant in Spring Hilll and last year Premier Joseph Parry told the nation that he held talks with the Washington bank on moving forward with the geothermal project.

McDonald said that the WIPN has always met its obligations under the accord and accused the NIA of withdrawing a guarantee that would have allowed the EX-IM bank to release funds for the project.

He said the company has already spent in excess of US$10 million in “discovering and bringing the engineering and development of the resources to the point where it can begin”. (CMC) Click here to receive free news bulletins via email from Caribbean360. (View sample)