The price of shares in Spanish firm Abengoa fell by 25 per cent on Thursday, after it emerged that the renewable energy company was close to bankruptcy, with debts piling up in the billions.
Abengoa is the preferred bidder to build the 190 megawatt power plant in Old Harbour, St. Catherine.
The company announced that a deal with Spanish engineering group Gestamp — which had been due to inject much-needed cash into the firm — had fallen through.
Gestamp subsidiary, Gonvarri, had planned to buy up 28 per cent of Abengoa for 350 million euros, which would have made it the renewable energy firm's biggest shareholder. But according to a statement published Wednesday, Gestamp felt the necessary conditions had not been met to seal the deal, which stipulated that Abengoa's creditors also provide substantial financial support.
A spokeswoman for the energy firm said the company now had four months to negotiate a solution with its creditors.
The Jamaica Public Service Company has declared that it is ready to activate an alternative plan to ensure the new power plant is built and commissioned by 2018.
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