Foreign Direct Investment in Latin America and the Caribbean 2017

72 Chapter I Economic Commission for Latin America and the Caribbean (ECLAC)
FDI flows to the
Dominican Republic
have been trending
upwards for the past
decade. Tourism and
real estate accounted
for more than half of
the investments.
Transnational companies have also expressed interest in other production and
business services sectors. In the agrifood sector, Kılıç Holding, a Turkish firm specializing
in aquaculture and fisheries, is examining the possibility of producing fish for export,
with investment of US$ 200 million. Australia’s Acquire Business Process Outsourcing
(Acquire BPO), which specializes in business services, announced the opening of a
contact centre in the Dominican Republic, with an investment of US$ 30 million, while
the Italian firm Ritrama, specialists in self-adhesive materials, continues to expand its
operations in the region and opened a slitting and distribution centre in the Dominican
Republic to service the whole Caribbean subregion, with an estimated investment of
US$ 29 million.
FDI inflows to Jamaica fell by 14.5% to US$ 790 million, with most going to
tourism, a sector that the government expects will grow by at least 5% per year. The
United States-based group, Karisma Hotels, announced that it would begin building the
first of three hotels in the Sugar Cane megaproject, an initiative first announced in 2015
(Jamaica Observer, 2016a), while the Spanish group, Riu Hotels & Resorts, will invest
US$ 60 million in the construction of its sixth hotel in Jamaica; hotel Riu Reggae will be
a five-star, adults only hotel with 454 rooms.
The renewable energy sector has also attracted foreign capital. Jamaica’s National
Energy Policy, 2009-2030, states that the country will seek to increase investments
and establishes a goal of 20% of renewable energy in the energy mix by 2030. In
2016, a 36 MW wind farm, a project valued at US$ 90 million, was opened to the
west of Kingston. The farm was acquired later that year by British investor Sir Richard
Branson, making it the largest private renewable energy project in Jamaica (Jamaica
Observer, 2016b). In addition, the United States biofuel company, Benchmark Renewable
Energy, announced a project for a large-scale bioethanol plant, with an annual production
capacity of 10 million gallons and an additional 3 MW of electricity for the local grid,
which will require investment to the tune of US$ 95 million. In the same area, the
German fund MPC Capital AG will invest US$ 50 million in a photovoltaic power plant
at Paradise Park, which is being developed by Eight Rivers Energy Company (comprised
of the French firm Neoen, which is the majority shareholder, and the Jamaican company
Rekamniar Frontier Ventures) (MPC Capital, 2016).
The business services market continues to develop thanks to foreign investors
and in 2016 India’s Hinduja Global Solutions (HGS) announced the opening of its fourth
customer service centre in Kingston, a project valued at US$ 100 million. Jamaica has
7.3% of the world’s bauxite reserves (ECLAC, 2016a) and, in a transaction valued at
US$ 229 million, the Chinese firm Jiuguan Iron & Steel Co. Ltd. (JISCO) purchased
the vertically-integrated Alpart aluminium refinery —which has been inactive since
2009— from the Russian company UC RUSAL. Reopening and improving the plant will
require an initial investment of US$ 220 million and JISCO has also announced that
it will invest some US$ 2 billion over the next four years to create an industrial zone
(Jamaica Observer, 2016c).
FDI inflows to the Bahamas were up 27.8% to US$ 522 million in 2016, but that
is still below the average for the last decade. 16 Capital inflows accounted for a lower
share of FDI (37%) and almost doubled their 2015 level.
In October 2016, Hurricane Matthew hit the Bahamas directly, causing severe
damage to infrastructure and property, as well as power outages and floods. The material
costs of that disaster together with those incurred following Hurricane Joaquin, which
preceded Matthew, are estimated at US$ 800 million (Bahamas Information Services,
2016). Most of the FDI that comes to the Bahamas goes to the tourism sector, which
16
The statistics from the Central Bank of the Bahamas are not fully comparable with those of other countries. In this document,
FDI data represent the sum of two items on the financial account: direct investment and other private flows.