BASSETERRE, ST KITTS, 9 December 2024 (PMO) — The Government of St. Kitts and Nevis and the St. Kitts Electricity Company Ltd (SKELEC) have terminated the Renegotiated Power Purchase Agreement (PPA) with SOLEC Power Ltd (SOLEC) for the construction of a Solar PV and Battery Energy Storage Project.
This decision follows the failure of SOLEC Power Ltd to meet critical contractual obligations, requirements, and deadlines, despite repeated extensions and significant efforts by SKELEC and the Government to facilitate project implementation.
On 25 November 2024, SOLEC informed SKELEC and the Government that SOLEC “is not currently in a position to issue FNTP (Full Notice To Proceed)” by the 25 November 2024 deadline as agreed to and required by the PPA. Consequently, SOLEC is still unable to start the Project. This notification follows a similar notice from SOLEC after failing to meet the original FNTP deadline of 28 May 2024 outlined in the Renegotiated Power Purchase Agreement of 28 November 2023.
Subsequent to SOLEC’s failure to meet the 28 May 2024 deadline, SOLEC was offered a 45-day extension to 19 July 2024. SOLEC advised that it was also unable to meet this deadline. In September 2024, SOLEC proposed a further 60-day extension, which was agreed to by all parties on 26 September 2024 as the FINAL extension. This FINAL contractual deadline has now not been met by SOLEC.
The Project, which originated in 2017, but had not started by the change of administration in 2022, was reviewed by the new Administration to ensure alignment with the Nation’s best interests. The review, agreed to by SOLEC, was facilitated by the Caribbean Centre for Renewable Energy and Energy Efficiency (“CCREEE”). The findings revealed important aspects of the agreement that were unfavorable to SKELEC and by extension the Government and people of St. Kitts & Nevis. These findings prompted the renegotiation of the PPA to achieve, among other things, (1) a reduction in the Power Purchase Price; (2) an opportunity for local private sector investment in the Project; and (3) rigid timelines for completion of the Project. The Renegotiated Power Purchase Agreement was signed on 28 November 2023.
By this time, SKELEC and the Government had anticipated that this Project would be well advanced and further renewed our commitment to the success of this project through the willingness to accommodate the repeated extension requests. However, despite all the efforts made to facilitate the implementation of this project, SOLEC remains unable to fulfill its obligations under the PPA to get the project started. Consequently, as SKELEC, the Government, and the people of St. Kitts & Nevis cannot wait indefinitely, it has become necessary to terminate the PPA and open opportunities for the viable alternatives that are ready to move forward.
While this outcome is regrettable, this decision underscores the Government’s steadfast commitment to accountability, transparency, and prioritizing the best interests of St. Kitts & Nevis.
The Government wishes to reaffirm its commitment to deliver affordable, reliable, and renewable energy solutions to the people of St. Kitts & Nevis. Accordingly, in the coming weeks, SKELEC and the Government will be announcing new renewable energy opportunities aimed at transparently and inclusively advancing our energy transition goals and creating local economic opportunities.
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