Message from the President and CEO

I am pleased to introduce you to Caribbean Utilities Company, Ltd. (“CUC” or the “Company”) Sustainability update report. In 2022, we issued our first sustainability report which demonstrated our commitment to advancing our sustainability practices whilst highlighting our accomplishments and our aim for continuous improvements in environmental, social and governance (“ESG”) performance company-wide. This update report seeks to update the reader on our implementation of ESG leadership and initiatives since the release of our 2022 Sustainability Report.

Our Company has remained focused on delivering safe, reliable and affordable service to our customers and creating a safe and inclusive work environment for our employees. Inclusion and Diversity have remained high on our agenda. Our goal is always to ensure that every employee feels comfortable, valued, and respected at CUC.

Over the past year we have been especially focused on one of our core values - Teamwork. We continue to encourage our employees to work collaboratively with other departments to breakdown functional silos and maximize attainment of the ONE CUC Team objective. Our success in all of our work comes down to our people and our values: health and safety, reliability, customer service, community, teamwork, integrity, excellence and environmental stewardship underpin our vision of “Empowering Cayman to be a global leader.”

We look to the future with renewed enthusiasm as we take the steps required to protect our environment by adding more renewable energy to our grid. The Company has also been working with the Cayman Islands Government to review and update the National Energy Policy (“NEP”) which, once adopted, will guide the utility industry in the islands. As the Cayman Islands seek to achieve updated targets in line with the five-year review of the NEP, CUC will play an integral part in achieving these newly established targets that will be inputs to its own Integrated Resource Plan (“IRP”) review. Accelerating the transition to clean energy is a priority of CUC as we proactively work to drive an inclusive economy, create new jobs, improve resilience of energy systems, diversify our energy supply, and create climate resilient networks.

Our team has been working assiduously to assist the regulator with the upcoming competitive bid process for utility-scale renewable energy. Growing the utility-scale renewable energy portfolio will significantly reduce greenhouse gas (“GHG”) emissions and provide low and more stable cost energy to the electricity grid in line with our commitment to the United Nations Sustainable Development Goal 7, Affordable and Clean Energy.

Our Company will continue to play an integral role in the ongoing growth and development of Grand Cayman and together with all stakeholders we will meet the future energy needs of the island in a resilient and sustainable manner.

Our Company

CUC commenced operations as the sole electric utility in Grand Cayman, Cayman Islands on May 10, 1966. The Company has been delivering dependable, safe and reliable electricity supply to the people of Grand Cayman for over 57 years.

The Company currently has an installed generating capacity of 166 megawatts (“MW”). The principal activity of the Company is to generate, transmit and distribute electricity in its licence area of Grand Cayman.

Health and safety are priority for CUC and the Company is committed to providing reliable energy, serving customers with outstanding support, fostering teamwork amongst employees and empowering local communities.

The Company values business strategies that have the highest degree of proven excellence to bring forth cutting-edge developments in the renewable energy transition , creating maximum efficiency for customers while balancing the needs of the planet.

CUC aims to provide reliable electricity to customers at the most affordable price. Our commitment to Grand Cayman is being a model corporate citizen and providing our shareholders with a fair return.

Our 2022 ESG Achievements

GHG Emissions and Climate Change

Project Execution:

Spinning Reserve Battery Project

In September 2022, the Company signed an agreement with the technology group Wärtsilä for the supply of two 10 MW energy storage systems at the Hydesville and Prospect Substations. The batteries will provide spinning reserve services to the grid, improve fuel efficiencies and lower the overall quantity of fuel used by CUC’s generating units. Work has commenced at the substations for the installation of these battery systems, and it is expected to be completed by mid-2024.

Purchase of Electric Vehicles (EV)

In 2022, the Company purchased two hybrid vehicles. In 2023, the Company purchased three EV sport utility vehicles (“SUVs”). CUC’s move to electrify its fleets of light-duty cars, trucks and SUVs indicates the Company’s commitment to environmental stewardship. CUC’s gradual introduction of electric vehicles to its fleet is crucial in the Company’s contribution towards improving air quality and air pollution levels and demonstrates the Company’s commitment to reducing company-related emissions over the fleet’s lifetime and global GHG emissions.

Generator Lifecycle Upgrades

In August 2022, the Company was granted regulatory approval to upgrade five MAN generating units totalling 68.75 MW of capacity. The upgrades will bring the generating units up to the most current specifications and increase the fuel efficiency. Once the upgrades are completed the generating units will be easily converted to allow dual fuel use of diesel and liquefied natural gas (“LNG”).

Climate Change Assessment

In May 2022, the Cayman Islands Government (“CIG”), in conjunction with the Centre for Environment, Fisheries & Aquaculture Science, hosted a two-day climate change risk assessment workshop. The Company was an invited participant of the workshop along with other government departments, companies and ministries. The workshop, which was facilitated by local and regional experts, aimed at assessing climate change-related risks and to score them in terms of proximity (how soon it will happen), urgency, magnitude (how bad it will get) and confidence (how much evidence there is).

Waste Reduction:

Waste to Art Competition

In July 2022, the Company launched its first Waste to Art Competition in line with the global initiative Plastic Free July. Plastic Free July created by the Plastic Free Foundation runs for the entire month of July. This global initiative encouraged employees to reduce or eliminate their use of single-use plastics. To support this initiative, CUC issued a yearly challenge for employees to go plastic free in the workplace and at home during July.

The Company launched this competition to encourage individuals to limit their use of plastics, especially single-use ones. Throughout July, infographics were shared, including videos highlighting the plastic endemic, alternatives to plastic that employees can adopt, and local volunteer opportunities, including a beach clean-up. CUC’s Waste to Art Competition challenged how employees viewed waste by creating art pieces using items designated for the landfill. Employees got creative and diverted trash from our landfill by incorporating reducing, reusing, and recycling principles. The Waste to Art Competition depicted the teamwork attributes of our employees but also their environmental stewardship efforts. The competition’s winner was the Financial Services Department’s piece titled “Save Sparky”. The artwork by the Financial Services Department demonstrated the struggle of a turtle named Sparky in the wild, where pollution has threatened its existence. The Waste to Art Competition proved an exciting initiative that allowed everyone to explore and share their waste reduction and plastic free messages.

Recycling

Recycling is an integral part of our efforts to ensure sustainable consumption and production of waste at CUC. The Company seeks to help reduce its dependency on landfills and more costly forms of disposal for Grand Cayman. In October 2022, the Company focused on and emphasized the importance of recycling at CUC and created educational avenues for employees to access resources on recycling. Throughout the month, employees gained valuable insight on proper recycling of paper, aluminium, glass and plastic.

The Company currently has numerous non-industrial items that are recycled. These include aluminium, batteries, cardboard, paper and plastic. Recycling bin deposits for these products are distributed throughout various locations across the Company’s Administrative Building and Power Plant. Prior to November 2022, the Company was also recycling glass, but the Island has since suspended glass recycling until further notice.