Scotia Jamaica has created a new loan facility for small and medium-sized enterprises (SMEs) and homeowners wishing to purchase renewable energy systems.

The loan offer, at a rate of 9.75 per cent per annum, is now available to SMEs and individual residential mortgage customers, Scotia announced on Friday. An unsecured rate of 15.99 per cent is also available under this special package, added the financial institution.

Scotia's base lending rate is currently 15.75 per cent.

The energy loan is the first of its kind for Scotia. It can be applied to a range of projects including the installation of solar panels, solar water heaters, the setting up of grid panels and the purchase of equipment to support green energy systems installation.

"This loan offer is timely and supports the national objective of identifying cheaper, renewable energy sources and promoting its use in homes and businesses," said Wayne Powell, Scotia's executive vice president retail banking.

Customers of Scotia Jamaica Building Society can access a maximum loan amount of $2 million at a fixed interest rate of 9.75 per cent for the first three years, after which it reverts to the existing standard rate. The maximum loan term is five years.

For small and medium business enterprises, the interest rate of 9.75 per cent is fixed for the life of the loan. The term of life is five years.

Renewable energy — power from natural resources such as sunlight, wind, rain, tides, and geothermal heat — is fast becoming a more economical alternative for commercial entities, especially in Jamaica as the price of oil on the world market continues to lead to higher energy costs and spikes in their foreign currency energy bill.

Crude oil is currently hovering at just below US$100 per barrel and Jamaica's oil bill at the end of fiscal 2011 was US$2.4 billion.