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Welcome to the ESCO JAMAICA Information Portal

In the ongoing efforts to find sustainable solutions to Jamaica’s energy challenge, the Government of Jamaica and the European Union have partnered on the implementation of an Energy Services Company (ESCO) Industry in Jamaica under the ACP-EU Energy Facility and the 10th European Development Fund (EDF). These collaborative efforts have sought to engage stakeholders in Jamaica’s energy sector to pool their expertise and resources to build a vibrant ESCO industry to better manage how energy is consumed by heavy users in our local manufacturing and service industries, as well as by domestic householders.

What is an ESCO?

An energy service company (ESCO) is a commercial or non-profit business entity that promotes energy consumption efficiency improvement through a variety of holistic energy management strategies. ESCOs provide a broad range of energy solutions including designs and implementation of energy savings projects, retrofitting, energy conservation, energy infrastructure outsourcing, power generation and energy supply, as well as risk management.

How does an ESCO project starts?

ESCO starts by performing an analysis of the property, designs an energy efficient solution, installs the required elements, and maintains the system to ensure energy savings. These savings are often used to pay back the capital investment of the project over a defined period, or reinvested to allow for capital upgrades that may otherwise be unfeasible.

How do ESCOs operate?

ESCOs develop, implement and provide/arrange financing for upfront project investments for its clients. Repayments from savings allow clients to compensate ESCO’s ongoing efforts and assumption of risk through an Energy Performance Contract (EPC) or through third-party financing. The energy savings project often begins with the development of ideas that would generate energy savings, and in turn, cost savings. This task is usually the responsibility of the ESCO. The ESCO often approaches a potential client with a proposal of an energy savings project and a performance contract. The two dominant global models are ‘shared savings’ and ‘guaranteed savings’. In Europe, a third approach used is called ‘chauffage’

ESCO is said to “drive” the project. During the initial period of research and investigation, an energy auditor from the ESCO surveys the site and reviews the project’s systems to determine areas where cost savings are feasible, usually free of charge to the client. This is the energy audit, and the phase is often referred to as the feasibility study.

ESCO Project Cycle

An ESCO project cycle may include the following steps. It is important to note however, that not all projects will include all the steps, as some projects can be terminated before they reach completion. Additionally, some projects do not follow a structured planning and/or monitoring process

Customer pre-qualification Planning Agreement
Investment Grade Audit Measures approved
Financing arranged Energy Services Agreement
Project implementation Project management closing

Jamaica has one of the highest energy intensity rates in Latin America, with imported oil accounting for over 90% of its total energy use. It is therefore important that energy be used as efficiently as possible if our development is to be sustainable within the context of available global resources and the impact of emissions on climate change.

Jamaica needs to record substantial energy savings to be internationally competitive, and therefore needs an enabling environment, adequate skills, creative commercial solutions and financing products to sufficiently stimulate an energy efficiency industry.

The ESCO industry has the potential to create new businesses, generate new jobs, deliver savings in energy consumption and cost, and climate change mitigation through reduced carbon emissions.

Energy Performance Contracting (EPC)

Energy Performance Contracting (EPC) is an agreement between the customer (buying organization) and the energy service company (the service provider, also commonly referred to as an ESCO). It is created to provide a structure for undertaking a contract that sees a service provider design and install equipment to deliver energy savings and/or energy generation. Learn more about EPC through any of the following source documents:

  • ESCO Jamaica Information Kit
  • International Energy Efficiency Protocol (IEEP)
  • Nuts & Bolts of EPC
  • Model documents
  • About ESCO Jamaica

    About ESCO Jamaica

    ESCO Jamaica seeks to create the supporting infrastructure for the “Development of an Energy Services Company (ESCO) Industry in Jamaica.

    The overall objective of ESCO Jamaica is to contribute to the improvement of the overall quality of life for Jamaicans by the development of a sustainable ESCO industry.

    Specific objectives of ESCO Jamaica