The Renewable Energy Industry in CARIFORUM Countries

BARBADOS

RENEWABLE ENERGY INDUSTRY STAKEHOLDER ASSESSMENT

3.3.3 | FINANCIAL INSTITUTIONS

The financial institutions in Barbados include commercial banks, credit unions and other non-bank financial institutions. They control the local lending capacity required to supplement that provided by government and external funders. No special emphasis is placed on RE companies or RE projects and their business is targeted towards the private sector. While they see RE as a new lending market, the lending criteria applied to assess risk, payback, ability to pay, management capacity, borrowing ceilings, etc, are determined in the same manner as for all other sectors. Some non-bank entities like credit unions and other financial institutions actively pursue these opportunities but do have bond limits to comply with; in some cases, up to US$175,000. This maximum amount could fund PV systems up to 100KW, covering most MSME needs but not adequate for larger scale commercial or utility scale systems. RE systems are treated as part of a dwelling for residentials and as a part of a building for commercial entities. The historic concerns of RE systems have therefore faded with this type of investment now being treated evenly amongst all other types of investments, and sometimes on a case by case basis for commercial implementations. Occasional lower interest promotions do present opportunities, but not specifically for RE systems. Despite a knowledge of national goals and targets there has been no corresponding strategic business alignment within the financial sector. No special dispensation is in place for the RE sector. Their relationship with the other key stakeholders is depicted in the diagram right.

The commercial banking institutions tend to have better relationships with the large funding agencies and local investors, while the smaller non-bank financial institutions tend to have better relationships with the RECs. This may be related to the bond limits which exists for the non-bank institutions.

LEAD GOVERNMENT MINISTRIES

PRIVATE SECTOR INSTITUTIONS

REGIONAL INSTITUTIONS

FINANCIAL INSTITUTIONS

UTILITIES REGULATOR

FUNDING AGENCIES

HIGHER EDUCATION INSTITUTIONS

RENEWABLE ENERGY COMPANIES

Figure 3.13 | Relationships of Barbados’ Financial Institutions

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The Renewable Energy Industry in CARIFORUM Countries