Small and medium-sized enterprises in Barbados now have an additional opportunity to boost their renewable energy and energy efficiency efforts, following the recapitalisation of the Energy Smart Fund (ESF) with US$13 million through a partnership with Government, the Inter-American Development Bank (IDB) and the European Union (EU)..
The Energy Smart Fund II has been replenished with US$6.7 million from the IDB and US$6.4 million from the EU.
It is expected to provide total loans of about $23.6 million to businesses for renewable energy and energy efficiency projects at an interest rate of 3.75 per cent up to a maximum ten years.
According to Ferdinand Straughan, Investment Manager of the Enterprise Growth Fund, administrator of the ESF, loans can be obtained for working capital for energy efficiency and renewable energy projects and for electric mobility projects to establish or expand fleets.
“The maximum any one applicant can access is $2 million in loan financing,” he said.
He said the technical assistance facility of ESF II will be capitalised with $1.6 million and will provide grants to applicants to conduct energy efficiency audits and renewable energy studies, as was the case under ESF I. However, under ESF II, grants can now be used to finance pilot studies.
“The third component of ESF II is the Air Conditioner Rebate Trade-In Facility. It will provide a 50 per cent rebate to businesses and households for the purchase of new efficient and ozone depleting substance (ODS)-free air conditioners, provided an old unit is disposed for each new unit supported. This facility will be rolled-out with selected retailers. The total size of the AC Rebate Trade-In Facility is $1 million,” he said.
Under the ESF I, some $27.1 million was approved in loans since the October 2013 inception to March 2022, supporting 5.38 megawatts of distributed solar photovoltaic capacity. An additional $438,000 was disbursed in technical assistance grants for energy efficiency audits and renewable energy studies, while $967,000 was used to reimburse retailers for discounts given to 2,600 customers purchasing energy efficiency appliances.
Speaking during a ceremony to relaunch the ESF at the Lloyd Erskine Sandiford Centre on Tuesday Straughan said approximately $1 million was used to fund the distribution of 58,845 LED light bulbs to residential customers of the Barbados Light and Power Company Ltd.
This comes as the island pushes ahead with the expansion of the renewable energy sector in an effort to phase-out the use of fossil fuel by 2030.
Deputy Permanent Secretary in the Ministry of Energy and Business Development Debra Dowridge said “robust investment” in the renewable energy sector, coupled with successful energy-efficiency programmes, will form key components to the island achieving its energy targets in the next seven years.
She said the partnership with the IDB and the EU to help fund the programme will also provide some needed momentum.
“As we are all aware, electricity cost is a major concern for the private sector and this is particularly so for small and micro enterprises which have their own unique challenges in accessing resources,” said Dowridge.
“By tapping into resources and financing options from the Energy Smart Fund, business owners can save significant money and energy, increase profits, promote their businesses, and reduce greenhouse gas emissions,” she said.
Viviana del Carmen Alva Hart, Country Representative of the IDB Group in Barbados, described the transition from fossil fuel to renewable energy as one of the most critical and complex challenges facing the world. She lauded Barbados for its efforts especially in the area of solar photovoltaic over the last decade.
She said it was now critical to support the SME sector through financial resources to develop energy efficient and renewable energy projects and with grants so they are better able to finance the required studies and pilot projects necessary.
“Having access to convenient interest rates and financial conditions is key for continuing the expansion of sustainable energy solutions and projects. This allows small and medium-sized enterprises to overcome barriers which, in the past, prevented the uptake of energy projects such as lack of appropriate resources to kick-start the planning and presentation of project ideas for their financing to become a reality,” she said. (MM)