Minister of Science, Technology, Energy and Mining (STEM), Hon. Phillip Paulwell, is urging small and medium sized enterprises to take advantage of the energy management loan facility being offered by the Development Bank of Jamaica (DBJ).
The DBJ/PetroCaribe (SMEs) Energy Fund allows SMEs to access loans of up to $30 million at a rate of 7.5 per cent to retrofit their operations to accommodate energy efficiency, energy conservation and alternative energy sources.
Under the programme, business operators across all sectors of the economy are encouraged to refurbish their facilities with renewable energy solutions, such assolar water heaters and solar panels, in an effort to effectively manage and conserve energy in their day-to-day operations.
However, speaking at the DBJ’s GreenBiz Energy Fair at the Emancipation Park in New Kingston on Friday (October 12), Mr. Paulwell pointed to the low take-up of the loan since its introduction.
He noted that the reluctance may be as a result of business owners being afraid of taking risks, but pointed out that this was “an amazing facility”, which must be utilised by SMEs.
“I want to commend the DBJ for this facility, [as] I don’t think in the recent history of our country; there has been such a facility available for businesses,” he remarked.
The Energy Minister further noted, “I have to say to my business friends, some of us are justifiably risk averse, but we have to shed that clothing. The future for Jamaica is to grow this economy [and] to invest in the economy.”
He added that energy is not only the platform to make things better for businesses, but it is also a business in itself. “I believe that the SME sector is well suited to look at the opportunities now to access the resources that are available and to get back into doing business and to take risks in this country,” he urged.
Meanwhile, Managing Director, DBJ, Milverton Reynolds, stated that in an effort to encourage further take up of the loan facility, the Bank has gone one step further to offer guarantees on the energy loans.
He said, it was found that, one of the main reasons many SME operators were reluctant to come forward, was that there was a challenge in accessing security for the loans.
“What we have decided to do is that we are now providing guarantees on these energy loans of up to $10 million or 80 per cent of the loan,” he noted.
“This means that if you have a project, which costs $10 million, and the financial institutions are somewhat reluctant to accept the equipment that you are providing as security, the DBJ will guarantee $8 million of the $10 million that you are borrowing,” he clarified.
The DBJ Managing Director said he hopes that this new offer will further spur demand for the loan facility.
Mr. Reynolds also informed that further studies showed that other contributing factors to the low take up of the loan was a lack of awareness and public education on the uses and benefits of energy efficiency, conservation and renewable sources of energy in Jamaica.
He noted that as a result of this discovery, the DBJ has partnered with the Inter-American Development Bank (IDB) to conduct a $72 million project to encourage small and medium sized enterprises to participate in the benefits of energy conservation.
Of this amount, the IDB provided a grant of $53 million and the DBJ contributed $19 million.
The aim of the project is to encourage SMEs to become involved in prudent energy management practices. The project focused on three main components: including a study to assess the demand for energy efficiency/conservation and alternative sources; a training programme for certified energy auditors/managers; and a public education campaign through the use of demonstration projects at selected SMEs in various sectors.
Mr. Reynolds noted that at the completion of the project, it is expected that there will be an increase in the uptake of financing and implementation of energy saving measures within the SMEs sector, and also the number of energy auditors/managers available to support the utilisation of the energy fund.
The DBJ/PetroCaribe energy loan can be accessed through the DBJ’s approved financial institutions (AFIs), which includecommercial banks, merchant banks, credit unions, the National People’s Cooperative Bank, the National Export Import Bank of Jamaica Ltd and micro-finance institutions.