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ReGen project gets financial close approval

Environment 14 Apr, 2022 Follow News

ReGen project gets financial close approval

The Cayman Islands Cabinet recently approved an extension to the financial close deadline and long-stop date for project agreement negotiations between the Cayman Islands Government and Dart for the development of ReGen, Cayman’s Energy and Recycling Centre.

Responsibility for the project was transitioned to the newly established Ministry of Sustainability and Climate Resiliency in October 2021. Since then, Premier and Minister of Sustainability & Climate Resiliency, Hon. G. Wayne Panton says his administration has been working to better understand how the project has changed since the deal was announced five years ago and ensure it continues to meet the country’s needs.

“In order to meet our national sustainability and infrastructure objectives, delivering a financially viable, long-term solution for solid waste management is a key priority for the Cayman Islands Government. We cannot continue to rely on landfilling as the primary method for dealing with our trash,” Panton said. “I’m pleased to announce Cabinet has approved a new financial close date and long-stop date to proceed with delivery of the ReGen project in partnership with Dart.”

A key concern for the Premier was ensuring the Sister Islands’ landfill sites are addressed.

“For ReGen to benefit everyone in the Cayman Islands, it’s important to ensure plans are in place to provide sustainable waste management for Cayman Brac and Little Cayman,” he said.

Dart President Development Delivery & Infrastructure Cameron Graham said Dart is committed to delivering the ReGen project and achieving the sustainability benefits associated with a modern energy recovery and recycling centre.

“Cabinet’s decision means we can restart work on the Environmental Impact Assessment for the ReGen project and progress important negotiations to achieve financial close by the new deadline,” Graham said. “We look forward to moving the project forward in partnership with the Cayman Islands Government. A cleaner, greener Cayman Islands benefits us all.”

Ministry of Sustainability and Climate Resiliency Chief Officer Jennifer Ahearn said ReGen will deliver a number of environmental, social and economic benefits for the country.

“Once complete, the ReGen facilities will reduce greenhouse gas emissions, contribute to our national renewable energy target, improve recycling performance and divert up to 95% of our waste from being landfilled, contributing significantly to our efforts to cultivate a lasting legacy of sustainability in the Cayman Islands,” Ahearn said. “Next steps are for the Government team to report back to Cabinet as soon as possible on the policy decisions and directives that will be required to achieve financial close. Over the next six months, the team will provide regular updates to Cabinet on the negotiations.”

Even with this update, Panton noted it will still be several years before the new infrastructure is up and running. The project timeline now estimates the energy recovery facility will be commissioned in 2026.

“In the interim, preserving space at the existing landfill through waste reduction will be a top priority for the joint project team,” he said.

Background

While the project agreement was signed by the previous Government administration in March 2021, moving from commercial close to financial close involves satisfying a long list of contract terms and conditions.

The deadline to obtain financial close is now no later than 31 October 2022. The long-stop date will be no later than 31 January 2023, three months after the proposed financial close date. A long-stop date is an established practice in contract negotiations; if the necessary conditions have not been completed by this date, the agreement is either automatically terminated or one of the parties has the right to withdraw.

In February 2022, the Office of the Auditor General Cayman Islands confirmed it was undertaking an audit review of the contract. The Governor’s Office has also committed to requesting a further review of the financials through the Foreign Commonwealth & Development Office; this additional review is not anticipated to impact project timing.


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