Business

US$33-m BPO projects in the pipeline

Wednesday, July 09, 2014    

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EIGHT technology projects valued at $3.7 billion are currently slated for Jamaica.

The investment is expected to generate 8,000 jobs, according to the Government's global bond prospectus posted this month.

The project represent part of a drive to attract business process outsourcing (BPO) firms to the Caribbean country.

"The Development Bank of Jamaica (DBJ) has approved six projects and is considering two additional applications with a total estimated investment of US$33 million," said the Government in a supplementary document to its US$800-million bond prospectus posted to the US Securities and Exchange Commission (SEC).

The new projects would increase the curent employment in the sector at some 14,000 to over 22,000 or nearly 60 per cent.

Last week, Yoni Epstein, chairman of the Business Processing Industry Association of Jamaica (BPIAJ), estimated that the sector could employ as many as 45,000 professionals before reaching a saturation point.

The association estimated that BPO operators in Jamaica earn more than US$350 million in annual revenues. That figure is slated to double in the medium term.

The Government has also been promoting the establishment of economic free zones, "in which no tax on profits is paid, and exemptions from general consumption tax and common external tariff", according to the SEC filing.

Last week, Government raised its largest-ever debt from the international capital markets: US$800 million with 7.65 per cent interest.

The state apparently aimed to raise US$500 million but that figure was up-sized to accommodate the final order book from institutional investors in the US and in Europe.

The new global SEC registered bond will pay off a (euro)150 million bond, which carries an interest rate of 10.5 per cent and which becomes due at the end of October.

The new bond, which was underwritten by Citibank and France's BNP, matures in 2025, but principal repayments are to be made in three equal tranches from 2023 to 2025.

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