Loans available for renewable energy, Bajans told

- by Marlon Madden June 10, 2023

By Marlon Madden

President of the Barbados Bankers’ Association (BBA) Anthony Clerk is urging residents to take out loans to invest in renewable energy.
He noted that with the banking system awash with excess liquidity and interest rates on loans at an all-time low, Barbadians should take advantage of the situation.
Clerk issued the call on Friday as officials from the World Bank Group, in partnership with the Caribbean Development Bank (CDB), gathered at the Barbados Hilton Resort to officially launch the Regional Private Sector Diagnostic (RPSD) report, which highlighted the need for greater investment in the renewable energy sector in the region.
“In terms of finance there is some good news,” he declared.
“The bank has a lot of money to lend. Liquidity is extremely high in Barbados. Surplus liquidity in the banking sector is over $2 billion, probably about $2.5 billion. That is a lot of money,” Clerk told the audience during a question and answer session.
“The other good news is that the banks are well-capitalised. So we can lend and interest rates are at an all-time low in Barbados. So you are talking about five per cent or less than five [per cent]; very good interest rates both on the residential side and on the commercial side. So if you want to borrow, now is the ideal time to borrow.”
The study launched on Friday, Promoting Private Sector-led Growth to Foster Recovery and Resilience in the Caribbean, also highlighted the need for improvements in several other areas, including the need for greater access to finance by small and medium enterprises’ investment in digitisation.
Clerk, who is the Managing Director of Republic Bank (Barbados) Ltd, told the gathering that his financial institution was in the process of reviewing millions of dollars in funding for a long list of projects, including several renewable energy-related ones.
“We have a number of projects in our pipeline. In terms of [those that are] approved and in the analysis stage, and if you were to add on the discussion stage, we are talking about over BDS$500 million in projects that we have and are looking at, at Republic Bank. And there are a variety of projects. We have a whole long pipeline of renewable energy projects,” he disclosed.
However, with battery storage now required to be a part of the mix when installing renewable energy systems, Clerk said some of those projects were on pause.
“That is a little challenge we have to overcome, but there is a long list of projects. Everybody and his brother want to do something in renewable energy,” he quipped.
The long-time banker said the projects before Republic Bank were spread across several sectors, including tourism.
“Of course, there are a whole set of people who own villas, high-end townhouses and so on. So there is a lot happening in the private sector. If you multiply what we are seeing at Republic Bank, which is 20 something per cent of the market, if you multiply that by four or five, you are looking at the kind of number that we need to really move the needle in Barbados. I think that is good news and I am confident that we will continue to get these things going,” said Clerk.
He said he expected at least two large hotel plants to start later this year, as well as at least two specialised medical facilities.
“All of those have some sort of foreign exchange impact. Either they are going to provide foreign exchange in terms of tourism and entertainment or they are going to save in terms of renewable energy. The medical facilities are not just for Barbados but for the wider region, so they all have some kind of foreign exchange impact,” he added.
The 145-page report also points to the need for closure in the connectivity, trade facilitation and trade policy gaps.
President of the Barbados Private Sector Association (BPSA) Trisha Tannis said she believed that in order for the private sector to ramp up investment, governments needed to create a more enabling environment.
As such, she suggested that in addition to institutions providing adequate funding to the private sector, developmental partners should consider providing technical assistance to governments.
This, she said, would help them “strengthen their technical competence capacity to get those legislative and regulatory frameworks up and running very quickly so that investors can have a much more seamless ease of doing business”.
“We hear that there is no end to funding at very attractive rates. There is no end to research capacity; we have a best-in-class university in the region. What we don’t have, however, are very nimble legislative and regulatory structures,” said Tannis.
“We do need to also look seriously at how we assist not just the private sector but how we assist the governments in securing the technical competence to actually create the environment for these industries to flourish.
“In Barbados, we have a renewable energy sector that is very investor-rich right now in terms of intent [and] attraction [but] we have capital that is stalled, and if you know about the private sector that is not a very good mix at all. Capital does not stay stalled for very long. It is going to look for more nimble jurisdictions,” she cautioned.
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