July 2014

Our country is fortunate to be located in the tropics with abundant sunshine. However, we failed to utilise the natural free energy available to us.

Now that our country has passed four IMF tests and the macroeconomy is in a better health to attract international lending agencies, it is prudent that the Jamaican Government use all its available resources to negotiate a loan to provide solar energy for residential housing. The programme would be developed in phases. The aim is to get at least 25 per cent residential houses connected within year one.

The Jamaican Government should borrow US$100 million and establish a revolving fund. This programme should be managed by the National Housing Trust (NHT).

Arguably, the NHT is one of the best managed government organisations. This organisation has the requisite resources, infrastructures and locations to execute the programme throughout the country. Using this organisation would reduce the need for a new organisation that would incur additional expenses.

The NHT would be responsible for the following;

Implementation and management of the programme

Managing the funds

Importation of the solar equipment

Installation of the equipment

Collection of monthly payments

Charging a five per cent handling fee

Determining the energy requirement of each house by using the applicant’s last JPS light bill.

Establishing four standard energy solutions based on monthly consumption; 100KW, 200KW, 300KW, and 400KW.

Establishing four standard monthly payment plans of $5,000, $10,000, $15,000 and $20,0000.

Establishing a payment plan for over five years.

Establishing a deposit not exceeding $100,000.

Applicants would be required to do the following;

Make application to the NHT

Make a down payment not exceeding J$100,000.

Make a monthly payment to the NHT.

This initiative would reduce the country’s energy bill, reduce our dependency on foreign oil, and reduce environmental damage. It would also reduce the amount each applicant spends on his monthly energy bill.

JOHN MCINTOSH

Hotel management consultant

jpmcintosh@hotmail.com

US-OWNED BMR Energy aims to secure US$20 million in financing from the International Finance Corporation (IFC) for its multimillion dollar wind farm in St Elizabeth.

“IFC is considering a $20 million loan to BMR Jamaica Wind Limited to support the development of a 34 megawatt (MW) greenfield wind farm in St Elizabeth Parish, Jamaica,” said the private finance arm of the World Bank in a recent disclosure.

The financing from the IFC would include an “A Loan for its own account of up to US$10 million, and a concessional loan as implementing entity of the Canada Climate Change Programme of up to US$10 million”.

The rest of the debt financing needs of the project is slated to come from a long-term senior loan from the Overseas Private Investment Corporation, the IFC stated.

The planned 34 MW wind farm, which costs US$90 million ($9.9 billion), should slash US$500 million in oil imports over 20 years, company documents indicate.

The wind farm will be adjacent to the existing three MW wind farm in Munroe owned by the national power utility, Jamaica Public Service Company (JPS).

The BMR project should begin construction in the fourth quarter of 2014 and commence operations in mid-2015, stated the IFC.

BMR’s main partner includes American Capital Ltd (ACL), a management firm that seeks to invest in fast-growing companies via debt and equity.

Over the last three years ACL committed over US$2 billion in new investments. It recently increased its focus on investments in its American Capital Energy Infrastructure (ACEI) division with investments in Nigeria and Jamaica.

“ACEI partnered with a veteran management team to create BMR Energy LLC (“BMR”), a new energy company focused on developing and investing in power and related energy infrastructure throughout Central America and the Caribbean,” said the ACEI in its latest annual report. “ACEI committed US$25 million to BMR’s first project, which is a 34 MW wind farm in Malvern, St Elizabeth Parish, Jamaica.”

In September 2013, the Office of Utilities Regulation in Jamaica selected BMR to build, own, and operate the wind project.

The project falls under the Government’s drive to generate 20 per cent of the island’s energy from renewable sources by 2030.

Currently eight per cent of the country’s energy comes from renewable sources (including biomass) or three percentage points lower than the target of 11 per cent by 2012, experts indicate.