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Interest-free money available to prepare renewable energy projects

JAMAICAN companies and government entities are being urged to take advantage of loans at zero per cent interest to prepare for the establishment of renewable energy projects to replace existing petroleum-generated energy sources.

The loans become available on the carbon market next year, in which developing countries can access funding from developed countries wishing to reduce their carbon emissions into the environment.

Local stakeholders assisted by international experts met for two days this week to build their knowledge and capacity on the Clean Development Mechanism (CDM) under which the renewable energy investments can be partly financed. The CDM is a provision of the 1997 Kyoto Protocol, which sets targets for developed countries to reduce carbon emissions, which are responsible for fuelling climate change.

Led by the Petroleum Corporation of Jamaica, the Jamaica carbon market workshop, held at the Knutsford Court Hotel in St Andrew, involved policymakers and technocrats from the Ministry of Energy and Mining, other ministries and agencies in charge of planning, environment, finance, trade and investment, and the private sector.

Dr Hugh Sealy, an executive board member of the CDM, said the mechanism is supposed to provide additional revenue for the projects but not to be the main sources of funding.

“It provides a loan mechanism to borrow money from the UN (United Nations) to develop projects, and if the projects are successful and begin to generate carbon credits, the money is paid back into a revolving loan scheme. If the projects are not successful, you don’t have to pay it back,” he explained.

Sealy noted that registering a project under the CDM could be a lengthy process costing up to US$100,000 in up-front costs for consultants and designing documents. He said such costs could be a disincentive for small developing states, which was why the CDM was so important.

A consultant to the Government of Grenada and vice-chair of the Alliance of Small Island States (AOSIS), a negotiating bloc of 43 countries, Sealy says currently carbon credit is worth about US$10 per tonne of CO2 removed from the atmosphere.

Dr Earl Green, the Petroleum Corporation of Jamaica’s group technical director, said the workshop was the first in a series of workshops to educate stakeholders and the public on the CDM.

He said Jamaica had the potential to develop a number of projects through which the country could gain carbon credits to trade with developed countries. These types of projects include hydro, waste to energy and liquid natural gas (LNG).

Fitzroy Vidal, senior director in the Ministry of Energy and Mining told Career & Education that government’s energy policy seeks to provide incentives to the private sector to invest in renewable energy projects.

“We see an opportunity through the CDM to make a quantum shift from heavy fuel oil, old inefficient plants where energy is used unwisely, by bringing the private sector to the table and creating a framework in which they can invest in projects that are not only environmentally sustainable, but can also create jobs,” he said.

Also addressing the workshop were United States-based CDM consultant Jaap Smink, who is on a six-month contract with the government; and Canada-based Clayton Martin, president of CO2 Energy and who has five years experience working in China on renewable energy projects. China is considered the world leader in implementing CDM projects.

Source: Jamaica Observer

Category/ies:Jamaica News.
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