New financial close and longstop dates confirmed; majority of conditions precedent now satisfied
The Cayman Islands Government and Dart continue to make steady progress on negotiations to reach financial close for ReGen, Cayman’s Energy and Recycling Centre. Financial close for the project is now expected by 30 September.
Premier and Minister of Sustainability & Climate Resiliency, Hon. G. Wayne Panton said the public-private partnership team recently agreed the new deadline for achieving financial close and a new project longstop date of 30 November 2023.
“I am pleased to confirm that the negotiations between the Government and the Dart-led consortium are progressing steadily. As I have explained before, the project agreement signed in 2021 contained dozens of conditions that still needed to be negotiated and agreed. Since that time, the joint project team has reduced the outstanding items down to a small number of items remaining to be addressed by the new financial close deadline. We are on a solid footing to conclude negotiations and move from the procurement phase of the project to the implementation and construction phase,” he said. “I want to reiterate that the length of the project negotiations reflects both the complexity of the project and the project team’s desire to ensure this deal represents value for money for the people of the Cayman Islands. We know ‘doing nothing’ is not an option but we also know that, for ReGen to truly be the future of sustainable waste management in the Cayman Islands, it needs to be affordable now and in the long-term. These facilities represent a significant investment in the future well-being of our country and, as with all major project decisions, we are taking our fiscal responsibility seriously.”
Dart Executive Director Cameron Graham said: ““The Dart Consortium has continued to work diligently in partnership with the Government across all areas of the ReGen Project Agreement (PA) to ensure the Government has the information required to achieve financial close by 30 September. This unique project requires continual communication with project partners, contractors and inter-government agencies to ensure its successful development and it is reassuring that all parties have remained aligned throughout the protracted negotiation process. With a clear pathway to financial close, we are excited to execute the PA and transition to the detailed design, construction and ultimately operation of ReGen that remains critically important infrastructure to the sustainable development of the Cayman Islands.”
As negotiations move towards financial close, Dart is making progress on the Environmental Impact Assessment (EIA) for the project and the public consultation for the draft Environmental Statement is scheduled to launch this month with public meetings scheduled for 28, 29 and 30 August in Grand Cayman. For details, please visit www.regen.ky .
The draft Environmental Statement will be available on the ReGen and Department of Environment websites from 18 August, and hard copies of the document will be hosted in community spaces across all three islands from 18 August for public viewing.
ReGen is the name for the waste-to-energy plant and recycling facilities that will form a sustainable, integrated solid waste management system for the Cayman Islands. In 2017, the Cayman Islands Government selected a Dart-led consortium as the preferred bidder to design, build, finance, operate and maintain the new facilities. In 2021, the previous administration signed a project agreement with the Dart-led consortium. While this was an important project milestone, there were still a number of significant issues left to be negotiated before the project can reach financial close.
What issues remain outstanding in the negotiations?
There are a limited number of conditions precedent still to be agreed by the new 30 September financial close deadline. Neither the Cayman Islands Government nor Dart are able to discuss specifics of the negotiations at this stage due to commercial sensitivities.
How much will the project cost?
Financial modelling for the project was updated at the beginning of 2023. At this stage, costs are still being finalised. There are two key figures associated with the project:
1. The contract cost that would be payable to the Dart-led consortium; and,
2. The total, projected cost of all the components that make up the entire waste collection and management system over the 28-year life of the contract (three years of construction and 25 years of operations), including ReGen and the estimated cost of the Department of Environmental Health’s continued role in the delivery of an integrated sustainable waste management system for all three Cayman Islands.
As the project is being procured as a “design, build, finance, operate, and maintain” contract, the construction costs will be financed by the Dart-led consortium with no cost to Government until ReGen is fully operational. Once complete, Government will pay a unitary charge per ton of waste processed through the new facilities over the 28-year life of the contract. At the end of the contract, Government will take ownership of the facilities.
The Ministry is aware of misinformation that greatly exaggerates and overstates the projected value of this 28-year contract. Project costs will be shared with the public once financial close has been achieved.
Ensuring this incredibly important, and much needed, national project is a value for money proposition for the country is a key priority for the Cayman Islands Government.
Will the Government’s investment in ReGen benefit the people of the Cayman Islands?
Achieving an integrated solid waste management system is fundamental to safeguarding human and environmental health in our community and ensuring the sustainable development of the Cayman Islands. Put simply, the Cayman Islands cannot afford to keep landfilling our waste.
While the Government is confident in its ability to manage the existing landfill footprint to its fullest until the ReGen facilities are commissioned and operational in 2027, there is no doubt that the country urgently needs an integrated solution for solid waste management that will significantly lower the amount of waste being landfilled.