Low-interest financing for renewables available in JA

BY LUKE DOUGLAS Career & Education senior reporter douglasl@jamaicaobserver.com

Sunday, February 12, 2012

WITH electricity bills continuing to rise and awareness of environmental matters growing in Jamaica, local businesses and householders showed keen interest in setting up renewable energy systems at a forum on energy last Thursday.

Many persons would like to switch to renewable energy sources, such as solar, and reduce their dependence on electricity provided by the Jamaica Public Service Company (JPS), but the initial cost of installing such systems continues to be prohibitive.

At the private sector forum on energy — put on by the American Chamber of Commerce — several low-interest financing options were presented, starting at under $1.5 million for a household to the possibility of a company attracting hundreds of millions of dollars in funds by listing on the Junior Stock Exchange junior stock market.

Soaring electricity bills, especially last summer, and increased awareness of the effect of carbon emissions on climate change have caused more Jamaicans to take a serious look at generating electricity from the sun and cutting ties with JPS.

Leo Williams, executive director of Williams and Associates Investments Limited, said he is currently encouraging persons to start companies producing alternative energy to list on the junior stock market.

He said large business or hotels could consider setting up a company to manage for example, a two-megawatt plant generating solar electricity for that business or hotel only.

Williams explained that under the law, companies can only generate electricity for themselves, as providing electricity for others would be in competition with JPS.

Listing on the Junior Exchange provides companies with a 10-year period of tax concessions during which funds can be used for purchasing and/or leasing of equipment.

"After 15 years you are literally in maintenance mode, and you have 10 to 15 years of electricity at five to six (US) cents per kilowatt-hour," Williams said at the forum held at the Knutsford Court Hotel.

This compares very favourably with the current rates offered by JPS of close to 40 US cents per kilowatt-hour.

Valerie Crawford, manager of trade financing at the EXIM Bank, said the bank was partnering with the Development Bank of Jamaica (DBJ) to offer energy loans at interest rates of 9.5 per cent for amounts over $15 million and eight per cent for under $15 million. She said US loans for energy projects could be obtained for as low as 4.5 per cent. She said the EXIM Bank was particularly targeting businesses in the productive sector.

DBJ general manager Emmy Lewars said although there were low interest loans available for energy projects, the take-up of the loans was "not high". She encouraged businesses in the productive sector to take advantage of the offer.

Owen Ferguson, branch manager of Capital and Credit Merchant Bank, disclosed that a $1.5-million loan from the bank at 9.5 per cent per annum could purchase a solar electricity system to replace JPS at a home using 340 kilowatt- hours, or $12,900 per month. This system, he said, could b e paid for in seven years.