Solar firm IEG mulls property development to unlock legacy losses

Innovative Energy Group (IEG) wants to enter property development to augment its solar-installation business, and would seek approval to use legacy tax losses from the Ciboney Group, a listed entity it acquired.

“The bulk of the losses relates to real estate-related losses, which were the primary activities of Ciboney prior to acquisition,” Executive Chairman Nigel Davy told the Financial Gleaner. “Those losses, of course, are available to be used in a similar kind of business in which those losses were, let me say, achieved.”

In 2023 IEG bought a majority stake in Ciboney, a former resort company, from the state-owned bailout agency Finsac.

The Jamaica Stock Exchange-listed company holds losses of some $256.3 million “available for set-off against future profits and may be carried forward indefinitely”, subject to agreement with the Taxpayer Audit and Assessment Department, according to notes in the audited financials for the year ended May 2026. A year earlier, the figure stood at $247.9 million.

That tax position is prompting IEG to look beyond solar engineering and installation. Davy avoided characterising the move as a large-scale property play but said the company is evaluating real estate opportunities that complement its renewable energy ambitions.

“Utility-scale solar, as you can understand, requires hundreds of acres,” he said, noting that large solar developments involve land acquisition and site preparation. “You might see some housing, but predominantly, it’s going to relate to our core business of solar installation.”

Davy said the Government is expected to issue new requests for proposals for additional utility-scale solar generation blocks in the coming months, and IEG intends to compete.

“We are going to compete for those,” he said. “We expect over the next three to six months those RFPs will be released, and then we will, of course, respond with a tender.”

The group reported net profit of $107.3 million on revenue of $339.5 million, and lifted shareholders’ equity to $1.12 billion.

Recovery

The company is still recovering from Hurricane Melissa, which struck the island last October. The storm damaged several solar installations and delayed project execution. Weather-related delays affected a National Irrigation Commission solar installation in Essex Valley, St Elizabeth. “We are wrapping up, and we expect that to be completed in the next four to six weeks,” Davy said.

The Sangster International Airport solar project in Montego Bay remains on track for completion by the end of this year, he said, and another project for MBJ Airports begins shortly and runs about eight months.

Melissa also changed how IEG builds. The company is moving away from Category 3 and Category 4 hurricane specifications and will design future projects, particularly utility-scale facilities, to withstand Category 5 storms.

“Those days are behind us,” Davy said. “We have to design our projects for Cat 5.” Portions of the Sangster Airport project sustained severe damage because sections were built to Category 4 specifications, he noted. The upgraded approach adds stronger panels, deeper pile foundations, enhanced structural bracing, and additional clamps against extreme wind uplift.

“Many new solar projects in Jamaica, especially utility-scale or large commercial scale, must be Cat 5 design,” he said.

neville.graham@gleanerjm.com