“‘GOJ Intends to Acquire the Licensed Business in 2027’: What JPS’ Latest Financials Don’t Tell Jamaicans About Assets, Loans and the True Cost of Power” JPS-Unaudited-September-30-2025…

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When Jamaica Public Service Company (JPS) released its unaudited financial statements for the nine months ended 30 September 2025, most attention focused on profits, revenues and the familiar debate about high light bills. But buried in Note 2 is a quiet bombshell: by letter dated 25 June 2025, the Government of Jamaica (GOJ) formally notified JPS that it “has the intention of acquiring the Licensed Business at the expiration of the term of the License being July 8, 2027.”

In other words, the State is signaling that in less than two years it plans to take back control of the country’s electricity business.

That disclosure now collides with two major developments:

1. The GOJ’s recent announcement that it will lend JPS US$150 million to help fund restoration after Category 5 Hurricane Melissa; and
2. JPS’ own estimate that it will require about US$350 million to fully restore electricity supply to all customers by February 2026.

These numbers raise big questions about how JPS’ assets are valued, who will ultimately pay for the restoration, and what price the Government will actually pay to reacquire the business in 2027.

BATV News has gone through the September 2025 unaudited financials line by line. What follows is not an accusation, but a set of probing questions we believe regulators, investors, and the public deserve to have answered before billions of US dollars change hands.

1. A Takeover Clock Now Ticking: What Note 2 Really Signals

Note 2 of the interim financials sets out the regulatory arrangements and license the company operates under. It confirms that JPS holds the exclusive right to transmit, distribute and supply electricity throughout Jamaica under the All-Island Electric License, 2016, for a period of 20 years.

The note then states that:

“…on July 1, 2025, by letter dated June 25, 2025, the company was given notice by the Ministry of Science, Energy, Telecommunications and Transport that… the Government of Jamaica has the intention of acquiring the Licensed Business at the expiration of the term of the License being July 8, 2027.”

However, the financial statements do not explain:

• How the purchase price will be determined.
  Will the Government pay net book value, fair market value, a multiple of earnings, or some other formula agreed in the licence or shareholders’ agreements?
• Whether any future government loan – including the announced US$150 million – will be deducted or offset against that price.
• What happens to new investments made between now and July 2027.
  If shareholders fund repairs and capital upgrades now, do they get compensated in full at takeover, or are these costs partly borne by customers through future tariffs?

Without clarity on these points, it is difficult for the public to understand whose balance sheet – JPS’ shareholders, the Jamaican taxpayer, or electricity consumers – ultimately carries the risk.

2. The US$150 Million Question: Loan, Subsidy, or Part of the Purchase Price?

The GOJ’s proposed US$150 million facility for hurricane restoration is being framed as an emergency response to an unprecedented national disaster. But once you read it alongside Note 2 of the financial statements – where the State declares its intention to acquire the licensed business in 2027 – that loan starts to look less like a simple lifeline and more like a pre-transaction funding decision that could shape the ultimate purchase price and who really bears the cost.

Terms of the loan

The first set of questions is straightforward but unanswered in the public domain:

• Is the US$150 million being advanced on commercial, concessionary, or interest-free terms?
  The interest rate, grace period and tenure will determine whether this is effectively a cheap backstop for JPS’ current shareholders, or a future burden that ends up on taxpayers and/or customers.
• What is the repayment profile, and how does it align with the planned 2027 acquisition?
  If significant repayments fall due after July 2027, will the Government as new owner inherit a liability to itself? Or will the debt be serviced primarily while private shareholders are still in control?
• What security, if any, is being pledged?
  Are core network assets, receivables or cash flows being charged in favour of the State, and how might that affect the valuation of the business when the takeover is executed?

In other words, is this loan structured to stabilise the system in the national interest, or to quietly de-risk the position of current investors as the ownership clock counts down?

Interaction with tariff structure and the sinking fund

JPS’ licence does not exist in a vacuum. It specifically allows the company to recover efficient operating and capital costs, including a regulated return, through the tariff mechanism. Built into that framework is a self-insurance sinking fund for catastrophic events – a recognition that in a hurricane-prone island, major weather shocks are not “if” but “when”.

Crucially, the September 2025 unaudited financial statements show a sinking fund balance on the balance sheet classified as “restricted cash” in Note 4 amounting to US$55.9 million, identified as being set aside for this very purpose. In simple terms, customers have already been paying, through their light bills, into a dedicated reserve that should help finance disaster recovery.

That reality sharpens the questions around the new Government loan:

• How large is this sinking fund as at October 31, 2025, and how has it evolved since the reporting date of September 30,2025?
  Jamaicans deserve to know how much they have already contributed to catastrophe protection and whether those amounts are consistent with the risk profile the regulator and utility anticipated.
• What are the rules governing this restricted cash, and who controls its deployment?
  Is the fund ring-fenced by licence conditions or OUR approvals? Has it been formally triggered for Hurricane Melissa, and if not, why not?
• In what sequence will financing sources be used for restoration?
  Will JPS first draw down on the customer-funded sinking fund and only then access the US$150m Government facility? Or will the loan be tapped upfront while the restricted cash remains largely untouched?
• If the sinking fund is used, how and over what period will it be replenished – and will that drive higher tariffs in the coming years?
  If consumers paid into it before the storm and must pay again afterwards to rebuild the fund, the public should be told that explicitly.
• If the sinking fund is not being used for this event, what then is its practical purpose?
  In that scenario, the question is not whether the fund exists – it does – but whether it is performing the role customers were led to believe it would play when it was embedded in the tariff structure.

These are not accounting details. They go to the heart of whether the self-insurance mechanism is genuinely working for consumers, or whether Jamaicans are being asked to support a new layer of borrowing on top of a reserve they have already financed.

Impact on the 2027 purchase price

Then there is the bigger strategic issue: how this new debt and the use (or non-use) of the sinking fund will feed into the 2027 acquisition.

Key questions include:

• How will outstanding Government loans be treated in the valuation?
  If the US$150m facility remains on JPS’ books at the time of takeover, will the Government pay a price that effectively compensates current shareholders as if the company owes the State that money – potentially resulting in Jamaica “paying itself” and still rewarding private investors as though the liability were third-party debt?
• Will any Government funding advanced before 2027 be explicitly netted off against whatever consideration is due for the business?
  In other words, will the acquisition formula be adjusted to ensure that State support for restoration is not capitalised into a higher purchase price?
• How will new capital expenditure funded by this loan be treated?
  If the restoration spend and associated borrowings significantly expand JPS’ regulated asset base, will the 2027 valuation simply reflect a larger asset pool partly built with public funds?

Put bluntly, without transparent answers to these questions, Jamaicans cannot tell whether they are paying once, twice, or three times:

1. Once through tariffs that already include a catastrophe sinking fund;
2. A second time through Government borrowing to lend JPS US$150m; and
3. A third time if that loan and the resulting asset base help justify a higher acquisition price in 2027.

Section 2 is therefore not just about a hurricane loan; it is about how disaster financing, tariff design, and a looming transfer of ownership intersect – and whether the balance of that intersection is fair to the people who ultimately fund the entire system.

3. JPS’ Asset Base: What Do the Books Really Say?

At 30 September 2025, JPS’ unaudited statement of financial position shows:

• Property, plant and equipment (PPE) – roughly US$880 million
• Right-of-use assets (primarily long-term leases) – about US$407 million
• Other non-current assets (including investment in an equity-accounted investee and employee benefit assets) – bringing total non-current assets to approximately US$1.4 billion

Total assets stand at about US$1.76 billion, funded by shareholders’ equity of around US$660 million and total liabilities of about US$1.1 billion.

Several points jump out:

1. A large, heavily depreciated grid
   Depreciation and amortisation for the nine-month period alone amount to nearly US$90 million, reflecting an asset base that is both large and ageing.
2. Significant lease liabilities
   Lease obligations (likely tied to power plants and other critical infrastructure) exceed US$470 million when current and non-current portions are combined. This means a substantial part of the grid is effectively “rented” over long periods rather than owned outright.
3. High leverage
   Long-term loans of more than US$270 million, together with lease liabilities and customer deposits, mean that over 60% of the capital structure is funded by debt-like instruments.

In this context, JPS’ announcement that it needs US$350 million to restore the system after Hurricane Melissa is striking. That figure is almost 40% of the entire net book value of PPE.

This raises a natural question:

If restoring the network to full functionality after one event costs US$350m, is the current book value of US$880m really close to the true economic value of JPS’ assets – or are they significantly understated?

4. US$350 Million to Restore the Grid: Impairment or Understatement?

Hurricane Melissa struck Jamaica on 28 October 2025, after the reporting date. Note 10 of the financials treats it as a non-adjusting subsequent event – meaning the damage is not reflected in the September numbers. The note states that assessments of potential damage are “currently underway” and that the hurricane therefore “does not affect the financial results presented herein.”

Since then, JPS has indicated it needs approximately US$350 million to restore service to all customers by February 2026 and has reportedly already restored around 70% of electricity supply.

This leads to two competing interpretations:

1. Assets are severely impaired
   If Melissa destroyed or permanently damaged a large portion of the transmission and distribution network, IFRS would require JPS to recognise an impairment loss in subsequent financial statements – potentially writing down hundreds of millions of US dollars in asset value.
2. Assets were already significantly understated
   Alternatively, if the company can restore 70% of service relatively quickly and expects to be back to 100% by February 2026, it suggests a substantial portion of the grid remains serviceable. In that case, why does restoration cost almost half the book value of the entire PPE portfolio? Does this imply that the replacement cost of the network is far higher than what is currently on the books?

Neither scenario is comfortable.

If the first is true, future financial statements could show major impairment charges, wiping out a chunk of JPS’ equity just before the Government plans to buy the business. That would have direct implications for the 2027 purchase price.

If the second is closer to reality, it suggests that JPS’ asset values may be materially below economic reality – an issue that matters to both investors and regulators, especially when tariffs are set to provide a “fair return” on the regulated asset base.

Either way, the public should be asking:

• When will a full, independent impairment assessment be completed?
• Will the results be published and clearly linked to the US$350m restoration plan?
• What methodology will be used to value damaged and replacement assets – net book value, replacement cost, or some hybrid?

5. Restoring 70% of Power: If Assets Were “Fully Impaired”, How Is the System Running?

One of the most puzzling aspects is the speed at which JPS has reportedly restored about 70% of electricity supply.

If key assets were “fully impaired” – meaning their recoverable amount had dropped to zero – we would expect:

• Long outages,
• Major rebuilds of generation, transmission and distribution infrastructure, and
• A much longer timeline than a few months to bring most customers back online.

Instead, the company has been able to restore a significant portion of power quickly, suggesting that:

• Some assets were temporarily out of service but repairable, not destroyed;
• Other parts of the grid may have redundancy or alternative routing that allowed load to be shifted; and
• Much of the restoration cost may relate to future resilience and upgrades, not just replacing what was lost.

This again fuels the suspicion that book values may not match real-world replacement cost. If US$350m is being invested not only to “get back to where we were” but to build a stronger, more hurricane-resilient grid, then the public arguably deserves a transparent breakdown:

• How much of the US$350m is pure replacement of damaged assets?
• How much is new capacity, undergrounding lines, or hardening infrastructure that should be treated as fresh capital expenditure – and earn a return through tariffs?
• How will this split be reflected in future financial statements and in the 2027 takeover valuation?

6. How Was JPS Performing Before the Storm?

Before Hurricane Melissa, JPS’ 2025 performance was already under pressure.

From the statement of profit or loss for the nine months ended 30 September 2025:

• Operating revenue: US$836.8m (up slightly from US$813.5m in 2024)
• Gross profit: US$326.1m (virtually flat year-on-year)
• Operating expenses: US$225.3m (up from US$215.9m)
• Impairment on trade receivables: US$10.5m (up from US$7.5m)
• Operating profit: US$95.4m (down from US$101.6m)
• Net finance costs: US$43.5m (up from US$41.7m)
• Profit before tax: US$58.3m (down from US$71.5m)
• Net profit: US$42.5m (down from US$49.7m)

Key takeaways:

1. Revenues up, profits down
   Higher revenues are not translating into higher profits. Operating expenses and finance costs are eating into margins, even before any hurricane-related costs hit.
2. Heavy finance and depreciation burden
   Depreciation and net finance costs together consume more than US$130m over nine months – a significant drag on profitability that reflects JPS’ capital-intensive and leveraged structure.
3. Dividends vs resilience
   Note 7 shows that JPS paid an interim dividend of about US$16.5m on ordinary shares in February 2025, with no further ordinary dividends declared up to September.
   While shareholders are entitled to returns, customers may reasonably ask: Should more of these earnings have been retained to bolster disaster resilience and self-insurance reserves, given Jamaica’s vulnerability to hurricanes?

The picture is of a company that was profitable but not booming, carrying a heavy capital cost, and still distributing dividends only months before a catastrophic event and a proposed government acquisition.

7. Big Questions for 2027 – and for Today

Pulling these strands together, several probing questions emerge that go beyond the usual “light bill too high” debate:

1. Acquisition Terms and Transparency
   • Will the Government publish, in advance, how the 2027 price will be calculated?
   • Will independent valuations of JPS’ regulated asset base and goodwill be made public?
2. Treatment of the US$150m Government Loan
   • Is there a clear commitment that any outstanding balance on this facility will be netted against the acquisition price or otherwise structured to avoid Jamaicans paying twice?
   • Will the full loan agreement – including interest rate, security, and repayment profile – be tabled in Parliament?
3. Use of the Tariff-Embedded Catastrophe Sinking Fund
   • How much money has been set aside over the years under the self-insurance sinking fund provisions approved by the Office of Utilities Regulation (OUR)? JPS-Unaudited-September-30-2025…
   • In what instruments is it held, and was any of it used or planned to be used for post-Melissa restoration?
   • If the fund is small, why, given that customers have been paying tariffs structured to include such amounts?
4. Asset Valuation and Impairment
   • How will JPS account for the US$350m restoration spend – replacement vs upgrade vs resilience?
   • Will an independent engineering and valuation report be published alongside future financial statements to justify any impairment charges or revaluations?
5. Impact on Customers
   • Will the restoration programme and new Government loan trigger future tariff increases, and if so, over what period?
   • How will customers’ interests be protected during the transition from a private-owned to a State-owned utility?
6. Governance During the Transition
   • With the State already holding a significant minority stake in JPS, poised to become 100% owner, how are potential conflicts of interest being managed in current decisions on borrowing, capital expenditure and tariff setting?

8. Conclusion: Before the Lights Are Fully Back On, Jamaicans Deserve Full Disclosure

JPS’ September 2025 unaudited financials, read together with the subsequent events of Hurricane Melissa and the GOJ’s takeover notice, paint a picture of a strategic national asset at a crossroads.

On paper, the company holds nearly US$1.4 billion in non-current assets and generates hundreds of millions in annual revenue. In reality, a single storm has triggered a US$350 million restoration bill and a US$150 million government lifeline, all while a 2027 State acquisition looms.

For BATV News, the central issue is not whether JPS or the Government is “right” or “wrong”, but whether the public has enough information to judge how their money – as taxpayers, bill-payers and future owners – is being used.

As Jamaicans wait for full restoration of power, we should also demand full illumination on:

• How JPS’ assets are valued and impaired,
• How disaster-resilience funds and government loans are structured and used, and
• How the 2027 acquisition will be priced and financed.

Only with clear, timely and transparent answers to these questions can the country be confident that the coming transfer of ownership will truly be in the national interest – and not just another expensive line item in the nation’s financial statements.

For feedback: contact the BATV Editorial Division at: info@batvja.com