Jamaica National Small Business Loans (JNSBL) is looking to vamp up interest in its US$2.5-million adaptation to climate change line of credit, catering exclusively to small and medium size enterprises (SMEs) from the agriculture, tourism and related sectors.
“In the coming months, JNSBL will be strengthening its efforts through collaborations with related parties in the tourism and agro value chain to further promote the special loan facility,” said Jacqueline Shaw Nicholson, JNSBL’s communications and client services manager.
“We will also support the education of persons on matters of climate change as well as adaptive and mitigation techniques available to them,” she told The Gleaner.
So far, SMEs have drawn down on J$19.5 million of the available funds to finance the installation of rainwater harvesting systems, drip irrigation systems, water recirculation systems, solar water heating system, and energy smart system.
The first loan was approved in December, following the official launch of the line of credit earlier in the year.
“JNSBL is pleased with the take up of the loan facility so far, with 51 per cent to the Tourism sector and 49 per cent to the agro sector in disbursements,” said Shaw Nicholson.
For those persons wishing to drawn down on the funds, criteria for selection include not only that they be operating a tourism or agro-related business, but also that proposed projects must enhance their capacity to cope better with the increased changes and effects of climate change.
“Collateral is required and can include machinery and equipment of trade or to be purchased, motor vehicles that can be comprehensively insured or registered titles as well as lien on deposits, guarantors are also acceptable,” revealed Shaw Nicholson.
The maximum loan amount that can be awarded is $5 million, with an interest rate of four per cent per annum on the reducing balance.
However, Shaw Nicholson said, “borrowers can also utilise other loan facilities available at JNSBL to further support project implementation where needed”.
The line of credit is one of two financing mechanisms under the Pilot Programme for Climate Resilience. The other is the Special Climate Change Fund (SCCAF) that is being administered by the Environmental Foundation of Jamaica (EFJ).
The SCCAF finances adaptation and disaster risk-reduction projects and cover associated programme management cost.
It is accessible by community-based organisations, other civil-society groups and select public-sector agencies specifically for “clearly defined high-priority activities, particularly related to building the resilience of the natural environment and contributing to livelihoods protection and poverty reduction”, according to project documents.
The EFJ recently awarded 18 grants to the tune of $84.9 million to undertake projects designed to boost the ability of communities to respond to climate change threats.
Counted among those threats are increased and/or more severe extreme weather events, such as hurricanes and droughts, which destroy agricultural and tourism livelihoods.
Climate change also brings warmer temperatures, which, too, have negative implications for not only human livelihoods but also marine life. This is given, as one example, the negative effects of increased sea surface temperatures on coral reefs.
It is a look at these implications that, at least in part, provides the basis of JNSBL’s decision to pursue administration of the line of credit under the PPCR.
“Increasingly, agro-related activities were experiencing negative changes in production yield, both in quality and quantity, which affected their ability to earn as per usual. We, therefore, wanted to assist with educating our clients and staff on matters of climate change and assist them to obtain the systems and techniques necessary to adequately respond to matters of climatic variability,” Shaw Nicholson said.
“JNSBL is also cognisant of the wider threat climate change poses to food security and as a part of our own mandate to support economic sustainability, JNSBL wanted to provide well needed support to the MSME sector to adequately mitigate and adapt for sustainability,” she added.
Power utility boss Kelly Tomblin views Softbank’s acquisition of Fortress Investment Group, to which New Fortress Energy is affiliated, as positive for furthering plans to build out gas facilities in Jamaica,
American company New Fortress Energy is a gas supply partner to Jamaica Public Service Company (JPS).
Last November, the partners celebrated the commissioning of Jamaica’s first LNG-fired plant at Bogue in Montego Bay, and they are about to start development on another gas facility in St Catherine. In both cases, New Fortress invests separately in the gas-supply infrastructure, while JPS develops the power plant.
The marine terminal and gas power plant development at Old Harbour in St Catherine is to get off the ground “in a couple of weeks,” said Tomlin, the president and CEO of JPS, on Friday.
JPS secured funding locally for its plant, while New Fortress planned to finance the project themselves with cash rather than debt, Tomlin, who noted that the acquisition by Softbank means “they will have a lot more cash”.
New Fortress did not return Gleaner calls up to press.
Last Wednesday, the two parties jointly announced a US$3.3 billion deal for Softbank of Japan to acquire New York-based Fortress Investment Group. Fortress, which is co-chaired by Pete Briger and Wes Edens, said its senior executives would remain with the company.
“I am in dialogue with Wes Eden,” said Tomblin. “I am assured that this acquisition doesn’t harm the project and that also he is excited about this deal; and so too the members on the ground who work for New Fortress,” said Tomlin.
Asked about any other implication to Jamaica, she said there would be “absolutely none”.
New Fortress plans to build and operate a liquefied natural gas marine terminal and pipeline within the Portland Bight area or close to the Goat Islands, according to the environmental report released last year.
The project will be executed through affiliate NFE South Holdings Limited. The marine terminal will feed gas to the 190MW plant that JPS will be developing at Old Harbour.
However, Dennis Chung, the chief executive officer of the Private Sector Organisation of Jamaica (PSOJ), says if Government wants to divest its shares in JPS it might make sense, noting the valuation of the shares would be based on future prospects of the business.
Governor General Sir Patrick Allen, delivering the Throne Speech in Parliament on February 9, said the Government will this year begin the process of privatising its minority shareholding in JPS.
“The Government will take steps to ensure that there is broad retail and institutional participation and Jamaican owners in the divestment process,” he said, adding that an enterprise team will be appointed to lead it.
JPS is primarily owned by Marubeni of Japan and Korea East West Power Company, each of which holds 40 per cent interest.
Paulwell said the Government’s expressed plan to offload its shares in the power utility “doesn’t mean it’s going to happen as we have seen from last year’s Throne Speech”.
Notwithstanding that, “I am opposed to the divestment of the shares at this time because we would get the least possible value on those assets in JPS, largely because everybody is aware that 290 megawatt of JPSCo capacity will become scrap metal in a matter of time when the new 190MW plant is established.”
The 190MW plant to which he referred is the proposed gas-fired power station at Old Harbour Bay, St Catherine, on which construction is slated to start in early March.
“For me, the Government should participate in the new 190 (megawatt) plant which will preserve and enhance its value, and after that plant has been established, that’s the time you can think about selling the shares,” Paulwell told the Financial Gleaner.
“If you were to sell the shares now, we would end up not getting much because we owe JPSCo so much money now; so nothing will go to the government’s coffers, because any money we make from the sale will have to go and clear our debt with JPS,” he said.
He noted that the Government currently owes the JPS more than $2 billion in bills, including for street lighting.
“So if it were to sell the shares now it will be at a depressed value. The net effect would not mean anything coming into Government’s coffers,” said the energy spokesman.
What the Government needs to do is to participate fully in construction of the 190-megawatt plant, Paulwell said. “It will cost them about US$20 million in equity,” he said, noting that for that plant, the JPS has a 20-year power purchase agreement which guarantees that project a significant rate of return on the investment for 20 years.
“That is one of the safest investments you could make. Why would the Government not be a part of that? And at that time it could contemplate on how to dispose of its shares,” said Paulwell.
“And, in any event, if it’s going to do that, the Jamaican people must be the people to whom those shares are sold,” he said.
Chung indicated that in making the decision to divest its shares in JPS, the Government must know what is happening.
He said he did not see it as a big deal to divest the shares and make Jamaicans a part of the ownership.
Referring to Paulwell’s opposition to the sale at this time, Chung noted that valuation of the shares would be done based on what is expected in terms of business.
“If you know, for example, that you have a contract to sell twice what you sold this year, then you can build that knowledge into the valuation,” he said, adding that the valuation would also be based on future prospects.
He noted that shares are traded at a price-earnings ratio and sometimes can be valued at many times more than the book value of an entity.
“So it’s based on information that people have,” he said, adding that if investors believe they are going to make a killing “out of this thing, going forward, then you value the shares accordingly”.
WITH A changing climate that threatens to wash away entire communities and derail livelihoods, local civil society organisations and small businesses are being empowered to respond – with capital.
This is thanks to financing made available through the Pilot Programme for Climate Resilience (PPCR).
There exist two financing mechanisms, according to Dr Winsome Townsend, project manager for the Adaptation Programme and Financing Mechanism under the PPCR.
One is the Special Climate Change Fund (SCCAF) that is being administered by the Environmental Foundation of Jamaica.
The SCCAF, according to project documents, is “to finance adaptation and disaster risk-reduction projects and cover associated programme management costs”.
“Grants from this trust fund will be accessed by community-based organisations, other civil-society groups and selected public-sector agencies, for clearly defined high-priority activities, particularly related to building the resilience of the natural environment and contributing to livelihoods protection and poverty reduction,” the documents revealed.
Last Monday, the first 18 beneficiary organisations were awarded sums to the tune of $84.9 million to undertake projects designed to enhance resilience at the community level.
“There was a call for proposals in October last year and out of that, about 80 proposals were received and about half that amount were shortlisted. They were further assessed and out of that, an initial 18 were approved,” said Townsend.
“Twelve were pending approval. Those 12 have now been approved. So out of that first call, approximately 30 have been approved,” she added.
Projects to be pursued include water harvesting and greenhouses, aquaponics systems and food processing, as well as various ecosystem restoration initiatives.
Townsend said another call will be issued later this month or early March.
The second mechanism is a line of credit, intended “to provide loan financing to support adaptation measures of farmers and other businesses in the agricultural sector, and small hoteliers and other businesses in the tourism sector”.
Five projects have been approved to the tune of some $25 million, Townsend said. However, the overall level of interest in the line of credit – administered by JN Small Business Loan – is not immediately clear.
“Because it has started soft, we don’t know yet. We can’t at this time make any determination as to the level of enthusiasm,” Townsend said.
Still, she is hopeful for its success, given what is at stake.
“It is not just the Government who needs to put in measures in terms of climate change adaptation, but everybody, including citizens. Of particular interest is the private sector because businesses are under threat from climate change, and so the private sector needs to respond to these threats,” she said.
“The micro, small and medium-size businesses are at greater risk because of their capacity to respond. They are not as resilient as the more established or bigger enterprises,” Townsend noted.
The push to get 30 per cent of Jamaica’s electricity from renewable sources by 2030 is not a pipe dream and will be achieved, Government Senator Matthew Samuda has insisted.
The senator said that energy generated currently from renewable sources is 10.5 per cent of net electricity generation.
Speaking last week in the State of the Nation Debate in the Senate, Samuda noted that energy minister Dr Andrew Wheatley, upon taking over the portfolio last year, increased the 2030 target in the national energy policy to 30 per cent from 20 per cent.
According to Samuda, the target “certainly complements the top line objective of 5 in 4”, referring to the Government’s objective of achieving a GDP growth of five per cent by the end of the 2020-2021 fiscal year.
“This (energy target) is not a pipe dream, nor is this lip service being paid to the nation’s energy supply. I am happy to state here today in this chamber that Jamaica will target a further 100 megawatt (MW) of renewable energy for the grid, with a new invitation for proposals to be made public in the very, very near future.”
Added Samuda: “This project will have a transformative effect on the sector, and indeed, the country. These projects will, no doubt, strengthen a pillar for competitiveness and development, which is cheap, reliable, and clean energy.”
Last year, an additional 80MW of generating capacity from renewable sources was connected to the national grid, Samuda noted.
WITH ECONOMIES under threat due to climate change and prevailing high production costs, the recent Caribbean Sustainable Energy Forum (CSEF) served as a call to urgent action to realise energy efficiency and energy sustainability within CARICOM.
Kim Osborne of the Executive Secretariat for Integral Development at the Organisation of American States, said it is past time that talk be translated into action.
“There is always the challenge of maintaining a healthy balance between dialogue and implementation. Several studies and reports have noted that our region faces an ‘implementation deficit’, but I would venture to say that the region also suffers from a ‘dialogue surplus’,” she noted.
She was addressing participants at the Caribbean Sustainable Energy Forum (CSEF), held in The Bahamas last week.
“There is a serious mismatch between meetings and results in our region. My point here is twofold: that dialogue is not an end to itself, and that dialogue that does not lead to action and to results is meaningless,” Osborne added.
At the same time, she said that energy must not be looked at in isolation, but rather in the context of sustainable development.
“In the normal course of things, energy is not provided in a vacuum. It impacts and is impacted by several factors, such as poverty, water availability, disaster risk, climate change, health, education and human resource development, human rights, and coastal and marine management,” Osborne said.
“I am proposing that to the fullest extent possible, an integrated approach should be adopted towards the goal of sustainable energy management,” she added.
For his part, Dr Devon Gardner, programme manager for energy with the CARICOM Secretariat, emphasised three things – partnership, integration and action.
“The partnerships are not just for the CSEF, but with the World Bank and the United States Government, we are able to implement the Caribbean Sustainable Energy Road Map ad Strategy (C-SERMS) platform … . Because of partnerships, we have been able to work with the member states,” he said.
On integration, he noted: “The CARICOM secretariat is really there to serve the member states. We do what the member states require to get the job done. The CARICOM is a group of countries within the Caribbean that we want to do some things together because it makes sense for us to work together to achieve mutual and shared objectives. And the role of the secretariat is to help the member states to realise this objective.”
Added Gardner: “We believe that all that CARICOM desires – from economic development to climate resilience to social resilience to security – is underpinned by having a strong energy sector … . We see energy as a critical part of the regional integration tool.”
In the end, Gardner said there was no question of realising C-SERMS energy targets that include 47 per cent renewable power capacity by 2027 without urgent action.
A number of regional leaders – among them Dr Regilio Dodson, Minister of Natural Resources in Suriname – have noted their support for an integrated and unified approach to the energy efficiency and sustainability in the region.
“We should work together … . We have to actively promote success stories … and learn from each other and go together and try to determine what is for our region the best way forward,” he said.
“If we work together to get this going and get the cooperation between CARICOM countries going, then we will have our energy security in our own hands, ” he added.
Among the topics explored over the three days of discussions at CSEF 2017 were ‘The CARICOM Energy Policy Road Map and Strategy: Shifting the C-SERMS from Concept to Action’; ‘The Regulator Within the Integrated Resource Planning Process’; and ‘The CARICOM Energy Transition: Lessons from the Last Five Years’.
The forum also saw the meeting of regional working groups on key thematic areas, including information and knowledge management, finance, capacity building and research, as well as policy and regulations.
BEGINNING FEBRUARY 7, the USAID-funded Jamaica Rural Economy and Ecosystems Adapting to Climate Change II (Ja REEACH II) project, in collaboration with the Meteorological Service of Jamaica and the Rural Agricultural Development Authority will host a series of agrometeorology farmers’ fora.
The fora are geared at equipping farmers and other stakeholders with climate-smart risk management strategies. The series will explore common terminologies used by weather experts in delivering the weather news, enabling farmers to interpret and use this information. The workshop will also feature presentations on climate outlook for the upcoming six months and how to prepare for any unexpected changes in the weather to reduce exposure of livelihoods.
“The farmers will also benefit from awareness sessions focused on the impact of climate change and variability on agri-business enterprises, the role of insurance products in the management of climate risks, and planning for climate risks at the farm or community level using the participatory integrated climate services for agriculture tool. This will be complemented by an interactive demonstration of the risk associated with disasters and early warning climate service (flooding or drought) by the MSJ,” Ja REEACH II said in a release to the media.
GraceKennedy Insurance has partnered with the Ja REEACH II project to provide Livelihood Protection Policy coverage valued at $300,000 which will be presented to selected farmers during the series. The Livelihood Protection Policy offered by GK Insurance is a trigger-based insurance policy which is designed to help especially non-salary income earners to cope with severe impacts on their livelihood following extreme weather events (rain and wind).
This is the third staging of the agrometeorology fora which builds on the engagement of some 575 farmers, extension officers and other stakeholders who have participated.
The Ja REEACH II project is a four-year initiative funded by the USAID and implemented by ACDI/VOCA. Through a range of interventions, Ja REEACH II works with government, private sector, civil society and community- based organisations to increase awareness and application of practical actions that help Jamaicans to become more resilient to the impacts of climate change.