JAMAICA'S energy fund, which now stands at some $665 million, is to start dispensing cash to approved projects by the second half of this year.

HENRIQUES. wants loan rates kept at single digit

The fund is a creation of the Petroleum Corporation of Jamaica (PCJ), but the company's new group managing director, Ruth Potopsingh, says it is to be managed by the Development Bank of Jamaica (DBJ), a state lender and financier of both large and small business initiatives.

That plan requires cooperation across government departments since DBJ answers to the finance ministry, while PCJ is answerable to the commerce and technology minister, who also has responsibility for energy.

"The Ministry of Commerce, Science and Technology and the PCJ are now looking at the legal and operational structure.," Potopsingh told the Sunday Observer.

"The PCJ is not a lending agency, so therefore we have to have the competent authorities, like the DBJ and the Ministry of Finance, to guide the project."
Still to be decided is the cap on loans, interest rate on loans, and repayment period. Typically, however, DBJ lends at 10 per cent, usually through a commercial bank, which retails the funds at a maximum 13 per cent.

The energy fund's creation is welcome news to renewable energy lobbyists, who have long identified the financing challenges for companies and private citizens who are willing to install cheaper and cleaner energy sources, such as solar and wind, but lack the upfront capital outlay that such systems require.

Louise Henriques, a director of the family-owned Automatic Control Engineering, sees a renewed interest in alternative energy emerging once the fund kicks in.

"The project has been in the pipeline for over 10 years, and if it is going to be a reality before the end of this year then I would be glad. We are far behind. Had we done this 10 years ago, I don't think that our oil bill would reach US$1.2 billion," said Henriques.

POTOPSINGH. PCJ is not a lending agency

Of interest, she said, would be the cost of financing under the fund.
"A lot of people are interested in changing over but can't because of the high capital outlay. I am really hoping that it will be a single digit interest rate that they would be offering," she said, adding that there were projects her company would like to undertake.

"Projects are there. That is not a problem. What would be are the requirements (and) we haven't been told anything. I have been hearing but until it is articled and we know, we can't do anything," she said.

The energy fund has had injections from three sources:
. US$10 million ($650 million) under the PetroCaribe oil deal between Jamaica and Venezuela;
. $10 million from the PCJ; and
. $5 million from the National Housing Trust.

The PetroCaribe deal, signed by Jamaica in August last year, provides several Caribbean countries, Jamaica among them, with crude oil from Venezuela on concessionary terms that allows payment over 25 years and at interest rates as low as one per cent.

Energy minister Phillip Paulwell announced the energy fund as a revolving loan school to both businesses and households that want financing for energy conservation programmes.

williamsp@jamaicaobserver.com

Feeding the multitude

DANGEROUS PETS

Pepper Pot