8 / 27
Getting an
energy loan
from DBJ
For businesses to
access DBJ energy loans,
they have to go through the
its approved financial institution
partners. These include all
commercial banks, credit
unions, the National
People’s Co-operative Bank,
National Export-Import
(EX-IM) Bank, Jamaica
Money Market Brokers and
Capital and Credit Mer-
chant Bank.
The partners will
then forward the loan
application to the
DBJ on the business’
behalf. So call your
bank, credit union
or any of the entities
above and start
looking for the
huge savings that
could come from
greater energy
efficiency.
FILE
Development Bank of Jamaica managing director Milverton
Reynolds (left) and chairman Joseph M. Matalon test out the
new online MSME Finance Directory launched January 21,
at the bank’s headquarters in New Kingston.
T
HE HIGH cost of electricity has often been cited as one of the major deter-
rents to investment locally and a strain on existing businesses.
This prompted the Government, through the Development Bank of
Jamaica (DBJ), to introduce an energy loan facility in 2009.
The objective of the energy loan programme is to promote and finance invest-
ments in energy conservation, energy efficiency and renewable energy technologies
thereby reducing cost and increasing business competitiveness, output and growth.
Under the programme, the DBJ has been making energy loans available through
the islandwide network of its approved financial and micro-finance institutions.
To date, the DBJ has approved loans of approximately $2.2 billion to support
the implementation of 238 energy-efficiency projects facilitating overall energy
investments of $5.8 billion.
Entities financed so far include companies in manufacturing, agriculture,
PLUG IN
8
GOING FOR GROWTH FEATURE
| THURSDAY, MAY 7, 2015
‘Jamaica Teas bubbles
with energy loan’
– Page 27
agro-processing,
restaurant/food serv-
ice, tourist attraction,
small hotel, retail store,
contact centre, offices, as
well as energy equipment
suppliers and energy serv-
ice companies.
“We are very proud of the
success that we have had with
this particular programme,” said
the DBJ’s managing director, Mil-
verton Reynolds.
“For the last fiscal year (2014-
2015) we had actually budgeted to do
$414 million and we did $596 million in
loans for alternate energy, so we exceeded
our targets for energy loans.”
The DBJ has set an energy loan target of
$520 million for the current fiscal year.
$30M IN LOANS AVAILABLE
DBJ energy loans of up to $30 million are
available for businesses in all sectors at 9.5 per
cent for up to seven years. Additional loans are
available to support larger energy projects from
DBJ’s other lines of credit at 10 per cent.
Micro, small and medium-size enterprises
(MSME) and businesses with revenues of less than
$425 million are able to access energy loans for up
to 90 per cent of the cost of an energy project,
while larger businesses can access up to 75 per
cent of the value of the project.
According to Reynolds, the main focus has
been on businesses, and particularly the
MSMEs, as a significant part of the cost of
their operations is energy, and he has been
very encouraged by their reaction to the
programme.
“We are really heartened with the
response we are seeing from the SME
sector in particular and that is
where the need is greatest,” said
Reynolds.
“One of the things
that make it
so accessible is the
credit guarantee that
we provide for the
energy loans, which is
up to 80 per cent while
for our regular loans it
is only 50 per cent,”
Reynolds highlighted.
“We increased the
amount of guarantee that
we provide for these loans,
because in most instances,
the equipment is what is nor-
mally used as collateral by most
of these businesses. We recognise
that because these are specialised
equipment most financial institu-
tions don’t necessarily want to take it
as security, so in order to overcome
this, we increased it (guarantee) to 80
per cent of the loan and they will only
need to look at security for the other 20
per cent.
“So that is another way that we have made it
possible for small businesses, in particular, to
easily access these loans.”
Reynolds further noted that in many instances
small-business operators who want to invest in
energy efficiency, conservation and renewable
energy projects have to undertake a professional
audit to inform the decision.
The cost to conduct these audits is sometimes
high for small businesses struggling with cash-
flow issues.
In response the DBJ, in 2010, launched the
Energy Audit Grant aimed at boosting the
uptake of its energy line of credit. Small
businesses can now access a grant of up to
$200,000 to cover the cost of an energy
audit for their business.
Forty-two energy audit grants
have been approved since
2010, of which 36 have
been completed.
DBJ helps small businesses put
high light bills under wraps
to energy loans