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PetroCaribe funding tapped for ICT infrastructure loans

Published:Friday | November 25, 2011 | 12:00 AM
Dr Christopher Tufton, minister of industry, investment and commerce. - Rudolph Brown/ Photographer

The Ministry of Industry, Investment and Commerce announced a US$20-million (J$1.7b) line of credit for call centre companies to develop their own factory space.

The funding facility marks a reversal in Government policy, which previously developed factory space for investors to either lease or purchase.

Information and communications technology and business process outsourcing (ICT/BPO) operators will be able to tap financing at 4.5 per cent to construct tier one or purpose-built facilities for their own use.

The initiative, said Industry and Commerce Minister Dr Christopher Tufton, is intended to net the country another 350,000 square feet of ICT-ready space and another 10,000 ICT jobs.

The ministry signed a memorandum of understanding with state agencies Development Bank of Jamaica (DBJ) and JAMPRO Thursday - both of which will administer the new scheme.

PetroCaribe Development Fund

DBJ is the administrator of the PetroCaribe Development Fund, from which financing for the programme will be tapped.

Loans under the ICT/BPO infrastructure scheme will be capped at US$5 million per operator, repayable at 4.5 per cent over 12 years.

"The facilities, which are to be constructed under the facility, must be used for ICT/BPO projects for the duration of the loan. If there is a change of use of the building before the loan is fully repaid, the interest rate will be increased to 6.5 per cent per annum," Tufton said.

JAMPRO will screen loan applicants, while the DBJ will conduct due diligence, credit checks and financial evaluation of applicants referred to them by JAMPRO.

The loan programme marks a switch of strategy, under which the Government itself, through the Factories Corporation of Jamaica and a number of public-private partnerships, has customised operating space in Montego Bay, St James and Naggo's Head, Portmore, primarily.

DBJ managing director Milverton Reynolds said the loan was designed in consultation with sector members, which includes 26 BPO operators.

"They wanted a suitable period in which the loan could be amortised, cheaper rates and an 18-month moratorium," Reynolds said.

All concessions were made, he said.

Other initiatives being rolled out to grow the ICT/BPO sector, said Minister Tufton, include training programmes for workers, the development of legislative framework to simulate and protect the industry and market studies.

He said broadly two models were being pursued: the build out of infrastructure; and the push to attract investors who manage business on behalf of clients.