Banks Express Belief in Caribbean Renewable Energy Future

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(Jamaica Observer, 29.Dec.2021) — Even with Jamaica not having any new request for proposal (RFP) since early 2016, more banks and other lenders have begun to embrace their role in de-carbonising the grid and facilitating the growth of renewable energy projects.

This comes after CIBC FirstCaribbean International Bank (CIBC FCIB) provided US$45.86-million multi-tranche loan in December 2020 to Content Solar Limited which operates the 20-megawatt (MW) solar farm in Content District, Clarendon. This was to refinance and upgrade the facility in what was the largest solar financing transaction for the year. The project was initially funded to the tune of US$62 million in June 2015 by the Overseas Private Investment Corporation (OPIC) and the US Government’s Development Finance Institution. Content Solar launched commercial operations in August 2016 under a 20-year power purchase agreement with the Jamaica Public Service Company Limited (JPS).

“We would like to continue making investments in Jamaica. We’re very enthusiastic about the hard work that’s been done in terms of creating a dynamic market. I think we’re all moving to a dynamic and shifting energy environment where we’ll have to learn some lessons going forward,” said president and CEO of WRB Energy Robert Blenker in an interview with the Jamaica Observer. Content Solar is a subsidiary of WRB Serra Partners Limited and WRB Enterprises, Inc.

Wigton Windfarm Limited refinanced US$49.2 million ($6.4 billion) in PetroCaribe loans in February 2019 for Jamaica dollar debt. Despite its revenue and net profit declining by double digits to $1.29 billion and $241.80 million in the first six months of its FY, it successfully repaid tranche A totalling $710 million in December 2020 and has a cash balance of $3.98 billion. In its 2021 annual report, Wigton remains ready to respond to any RFP by the Government Procurement Entity for the implementation of new generation capacity. It is also looking to diversify itself in the Caribbean region for other projects.

FCIB has deployed more than US$150 million in financing renewable energy projects to date across the region totalling more than 130MW. This has resulted in over 120,000 households in the Caribbean having access to clean, sustainable power. Associate director, Sales and Business Development at FCIB, Gregory Blackman, explained in an interview recently that FCIB provides up to 100 per cent financing for up to ten years for individuals and commercial entities. The current loan amount is up to US$50,000 according to the regional bank’s website.

NCB recently joined the push for energy transition by announcing its ‘Drive Green, Drive Clean’, which allows persons to borrow up to $15 million for electric vehicle purchases at an interest rate of 6.65 per cent. Managing director of Rekamniar Frontier Ventures, Angella Rainford, recently setup Soleco Energy Limited to fund solar power solutions across the Caribbean. Rainford was one of the leading forces behind the 51.5-MW Paradise Park solar farm in Savanna-La-Mar, Westmoreland. Soleco has already received approval to build out three renewable power facilities in Jamaica. BMR Energy setup the 36.3-MW BMR Wind Farm in St Elizabeth, which cost US$89.9 million and saw investments by the US and Canadian governments. BMR Energy is backed by Virgin Investments and offers a wide suite of services for energy infrastructure throughout the Caribbean and Central America.

Minister of Science, Energy and Technology Daryl Vaz announced a partnership with the United States Agency for International Development (USAID) to undertake a distributed energy project in the tourism sector to the tune of US$4 million. The Government of Jamaica currently plans to procure 268 MW of energy from renewable resources by 2025. Solar power currently generates two per cent of Jamaica’s energy, wind accounting for 10 per cent and natural gas for 11.1 per cent of installed capacity.

“The confidence in robustness of the regulatory structure, the respect for rule of law and contracts and JPS’s ability to work with renewable energy partners. I think there’s enough confidence that more conservative and traditional lenders can now get excited about 20-year debt facilities on a utility scale project. It really is worth applauding the people that have worked hard over the last decade to get Jamaica where it is now. There’s plenty of room to improve and evolve, but I think it’s worth recognising the success.” Blenker closed.

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By David Rose

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