ENERGY Caribbean Yearbook (2013-14)

Companies
CIBC firstcaribbean international bank
FCIB aspires to be the
region’s energy bank
Countries
CIBC FirstCaribbean International
Bank, successor
to the Barclays and CIBC
operations in the region
(making it the largest
banking institution in the Englishspeaking
Caribbean), will continue to
seek out funding opportunities in the
energy sector in 2013.
It has been most successful so far
in the area of electricity, where it has
helped fund the Jamaica Public Service
Company (with whom the Bank says it
has a “strong relationship”), the Jamaican
IPP West Kingston Power Partners, the
Bahamas Electricity Corporation and St
Lucia Electricity Services. It has also been
lead arranger/underwriter for an equity
issue by the Canadian power company
Emera Inc., in relation to its Caribbean
acquisitions.
But it is likely to pay more attention
in the future to upstream oil and
gas activity, downstream projects,
renewable energy and energy efficiency,
all of which are likely to need injections
of loan capital as new initiatives ramp up
in various parts of the region, including,
of course, Trinidad and Tobago.
The Bank has already taken part in a
US$235 million syndicated loan facility
for the Suriname national oil company,
Staatsolie, to which it contributed US$10
million, for production and refinery
expansion.
As the recently-approved Caricom
Energy Policy moves into its
implementation phase, with the
emphasis on greater take-up of
renewable energy (RE) and the adoption
of energy efficiency measures in the
region, CIBC FirstCaribbean International
will have even greater scope for
extending financial support to energyrelated
activity.
It already has an RE project to its
credit, having been part of a syndicate
that underwrote a US$54 million
secured term loan facility to NuCuraçao
Windparken BV for 30MW of wind
power generation. This represents,
according to the Bank, “almost 20% of
Curaçao’s annual energy demand.”
Sharaz Ahamad, CIBC FirstCaribbean’s
director for origination and capital
market products in the Southern
Caribbean, points out that the Bank has
even ventured into biomass-to-energy,
by “funding the first stage of a waste
recycling plant for a company called
Sustainable Recycling in Barbados,
which will collect household waste
and bundle it so it can be used in an
incinerator to provide energy to the
grid.”
Though Trinidad and Tobago has
signed on to the “sustainable energy”
that underpins the Caricom Energy
Policy, Ahamad has his doubts about
whether RE will catch on easily in a
“The economics of RE will be challenging in Trinidad
and Tobago: I don’t see a huge project in
solar or wind here”
country already self-sufficient in both
oil and gas sold at attractive prices for
electricity generation, transport and
cooking/water heating.
“The economics of RE will be
challenging in Trinidad and Tobago,” he
says, “I don’t see a huge project in solar
or wind here – the economics don’t
really lend themselves to it.”
He may be in for a pleasant surprise,
however, since the energy ministry in
Port of Spain seems determined to woo
consumers into looking more kindly on
RE and is itself active in promoting it.
Ahamad does concede that
Trinidad and Tobago may be a
strong candidate for the application
of energy efficiency measures, since
the very cheapness of energy tends to
encourage laxity in its conservation.
“There’s a huge opportunity here in all
Caricom members,” he insists. “Energy
costs are very high in most regional
states. The hotel plant in particular is a
very good candidate. In fact, we have
a programme of loans to hotels to
improve energy efficiency.”
Downstream industries from the
core petrochemical plants in Trinidad
and Tobago is another area where CIBC
FirstCaribbean is keen to be active. Two
such investments in which it has had
mild initial involvement – the Carisal
caustic soda/calcium chloride plant and
the EthylChem ethanol dehydration
facility – do not now appear to be
going forward, but no doubt other
loan opportunities will arise in the
downstream part of the energy sector
in due course.
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