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DBJ approves $124M in renewable energy loans

The Development Bank of Jamaica (DBJ) has dismissed reports that there have been no takers for the loans for renewable energy projects for the micro, small and medium-sized enterprise (MSME) sector.

However, it has admitted that clients have experienced challenges in taking up the loans, which are disbursed through approved financial institutions (AFI), such as commercial banks, merchant banks, credit unions and micro finance institutions and the National People’s Co-operative Bank.


Some $84 million in loans has been disbursed with another $40 million approved to eight clients under the programme since 2008, general manager of the DBJ’s AFI relationship division, Yvonne Lewars disclosed on November 10.

“There has been take up of the funds, but not as fast as we would like,” Lewars told Environment Watch.

The DBJ’s managing director Milverton Reynolds, stating that renewable energy was of “strategic importance” to the organisation, said the DBJ recently negotiated a grant of US$591,000 or approximately $51 million from the Inter-American Development Bank (IDB) dedicated to energy usage.

The grant would be used for three things, namely:

* to implement a study to determine the demand for energy in Jamaica;

* to support the training and certification of energy auditors in partnership with the University of Technology; and

* to launch a public education programme about the importance of renewable energy.

Describing the cost of energy as “too onerous and burdensome” for businesses in Jamaica, Reynolds said this ought not to be a huge problem because the island has “endless sunshine and wind”.

He was speaking at the opening of the Scientific Research Council’s 23rd science and technology conference and exposition at the Jamaica Pegasus Hotel in Kingston on November 9.

However, responding to complaints that the loan approval process was too complex, Lewars explained that before an alternative energy loan is disbursed, an energy audit must be carried out. This involves assessing the energy usage of an entity or business and determining how much can be saved by making adjustments, such as changing bulbs, properly sealing windows, and improved ventilation to areas, even before a loan for alternative energy is disbursed.

Lewars said in an effort to improve the approval process, the DBJ had developed models for various sectors in order to reduce the need for MSMEs to pay for audits. Models had been done for poultry businesses and manufacturing, among other sectors.

“It’s a very specialist area. We are training our staff on the various alternative energy sources that can be used, but before we use alternatives, what can we do with the existing business to reduce cost? For example, a simple water heater in a hairdressing business can greatly reduce the energy supply chain,” she said.

In the meantime, the DBJ said it was developing better relationships with AFIs and meeting with business persons to make the applications more acceptable.

Former energy minister Clive Mullings has been among persons calling for the DBJ to disburse alternative energy loans itself, instead of wholesaling them though AFIs.

The loans provide up to $15 million or 90 per cent financing to clients at 9.75 per cent interest.

Read more:–124M-in-renewable-energy-loans_8141068#ixzz16tdEaYOk

Category/ies:Jamaica News.
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