OfReg’s Board approved a new 25-year potable water licence for Cayman Water Company on 11 June 2026, with a commencement date of 1 August 2026. The agreement establishes a long-term framework for retail water service across Cayman Water’s service area, including Seven Mile Beach and West Bay.

Cayman Water is the Grand Cayman retail utility of Consolidated Water Co. Ltd. (NASDAQ: CWCO). It has provided retail water service on the island since 1973. Under the new licence, the company holds exclusive rights to produce, distribute, and sell potable water within its service area.

A 25-year framework for potable water service

The licence replaces a period of extended regulatory uncertainty. A February 2025 government concession had maintained the prior licence terms while negotiations continued.

The new agreement provides a 25-year contractual framework beginning 1 August 2026. For the jurisdiction, it sets out the operating basis for potable water supply in two of Grand Cayman’s most development-active corridors.

For Cayman Water, the licence confirms its exclusive rights to produce, distribute, and sell potable water within the defined service area. For customers in Seven Mile Beach and West Bay, it establishes the terms under which retail water service will continue.

Defined rate mechanics and lower customer costs

Customers will see an approximately 6.5 percent reduction in cost per gallon compared with the prior licence. The reduction is driven by lower base rates and energy cost recovery charges under the new framework.

The licence also includes annual rate cap adjustments effective each 1 July. Those adjustments remain subject to OfReg verification and approval, creating a defined process for future rate changes.

The commercial effect on the operator is visible in the company’s own pro forma estimates. Cayman Water estimates that revenue would have been approximately $2.1 million lower in 2024, $1.9 million lower in 2025, and $0.6 million lower in the first quarter of 2026 if the new framework had been in place.

The trade within the new licence

The agreement makes the trade clear on both sides. Customers receive lower costs per gallon under the new rate structure. The jurisdiction receives long-term certainty around potable water supply and defined rate mechanics.

For the operator, the framework reduces near-term margin relative to the prior licence terms while providing a quarter-century of contractual clarity.

Why Seven Mile Beach and West Bay matter

Seven Mile Beach and West Bay are among Grand Cayman’s most development-active corridors. For anyone underwriting a multi-year hospitality or residential project in these areas, the 25-year utility framework removes a variable that had previously been open-ended.

The licence does not change the need for project-specific diligence. It does, however, provide a defined utility framework with stated service rights, rate mechanics, and an annual adjustment process subject to regulatory verification and approval.

Key takeaways

• 25-year term: OfReg approved the new potable water licence on 11 June 2026, with a commencement date of 1 August 2026.
• Defined service area: Cayman Water holds exclusive rights to produce, distribute, and sell potable water in its service area, including Seven Mile Beach and West Bay.
• Lower customer costs: The new framework reduces the cost per gallon by approximately 6.5 percent versus the prior licence.
• Annual rate process: Rate cap adjustments take effect each 1 July, subject to OfReg verification and approval.
• Visible operator trade: Cayman Water’s pro forma estimates indicate lower revenue under the new framework of approximately $2.1 million in 2024, $1.9 million in 2025, and $0.6 million in Q1 2026.

A resolved utility variable for long-term projects

The new licence resolves an extended period of uncertainty around water supply in Seven Mile Beach and West Bay. It pairs lower consumer costs with a long-term operating framework for the jurisdiction and a defined contractual position for the operator.

For hospitality and residential projects being evaluated across these corridors, the 25-year licence provides a clear utility context: Cayman Water’s service rights are established, rate mechanics are defined, and annual adjustments remain subject to OfReg verification and approval.