The Enterprise Growth Fund Limited (EGFL) has pumped close to $16 million into energy projects through its Energy Smart Fund. In addition, it has also started a Landlord Metering System pilot through which it collects remittances from the sale of electricity to the national grid.
Reporting substantial progress in helping to expand the renewable energy sector in Barbados, the fund’s Chief Executive Officer Timothy Simmons said he was especially pleased since the lending facility had disbursed $15.9 million under its energy fund for various related projects and started the metering project over a year ago. Under the latter, the EGFL funds the renewable energy project for a company and assumes the role of landlord so that it collects the monies from the sale of the electricity to the grid, and uses those funds as amortization for the loan.
“That is a way of mitigating a lot of the risk because we don’t have co-mingling of the funds that naturally flow from the sale of the renewable energy with the funds of the company. That should allow us to rapidly roll out a renewable energy solution with a number of companies and entities that hitherto, would have had challenges providing us with adequate security to collateralize our loan,” he explained.
Once the loan is repaid, remittances for the sale of the electricity that is produced from the renewable energy source to the national grid, then goes directly to the company.
“That is an exciting project. We are looking to aggressively roll it out across Barbados,” he said, pointing out that another loan has recently been approved for a second company to join the project with a 150 kilowatt solar photovoltaic system.
He said the interest in renewable energy among companies in Barbados remained high and he was hoping that this year the EGFL could help in the introduction and expansion of “some fairly exciting initiatives” within the sector.
“We are in tough economic times but there are some green shoots. We have had a lot of interest in the renewable energy sector. As a matter of fact, that is where we have most of our action across the various sectors,” said Simmons.
The EGFL, which is celebrating its 21st anniversary this year, disbursed a total of $214 million in loans to approximately 331 SMEs over the years, with $108.4 million going to the tourism sector; $39.2 million to agriculture; $19.1 million to manufacturing; $31.4 million to other service businesses and $15.9 million to the renewable energy.
“Our funding interventions have assisted in creating or maintaining approximately 3,000 jobs. It is noted that our funding in the tourism sector has supported the expansion and modernization of approximately 1,200 hotel rooms,” said Simmons, as he reported on the EGF’s performance over the past 21 years.
The EGFL has approximately $122 million in its finance portfolio. It offers loans from as low as $100,000 to as high as $4.5 million.
Simmons said the delinquency rate was currently about 30 per cent on average. He explained that while the figure may seem high it is a rate that the fund can sustain since most of the capital is really capital injected as equity. “So we have not borrowed to on-lend,” he added.
The EGFL has assets of approximately $28 million and 12 staff members, after starting with a capital base of just $3.5 million and two staff members. The fund also now owns its Barbarees Hill, St Michael building, constructed to the tune of $3.3 million.
For its celebrations this year the EGFL will be hosting a church service at the St Leonards Anglican Church on January 6 and a public lecture at the Grand Salle on Wednesday, January 9.