CAC, Tropical Battery form new energy venture
Published:Sunday | June 6, 2021 | 12:06 AMKarena Bennett - Business Reporter
CAC 2000 and Tropical Battery have forged an energy partnership under a joint venture called ENRVATE Limited that will trade in energy-saving solutions in Jamaica and the Caribbean.
The company, which was incorporated at the end of April and became operational on June 1, is being led by Steven Marston, who recently gave up his role as CEO of CAC 2000 Limited to Gia Abraham in January but remains its executive chairman.
ENRVATE Limited is offering custom-built and environment-friendly solutions that do real-time measurement of energy consumption. Its market-entry pitch includes helping to deliver savings of a minimum 25 per cent on energy costs by switching out high-energy products for more efficient solutions customised to the client.
The company will cover the cost of procuring and installing its systems then recover the funds by billing clients in instalments.
It will provide solar panels and energy control and management systems to commercial business operating in the small and medium-sized category. It is also looking to capture business from the higher end of the residential market.
Both Tropical Battery Company Limited and CAC 2000 operate in the energy market already, the former as a supplier of energy-storage devices and the latter as a provider of air- conditioning systems.
The joint-venture partners, each of which will hold 50 per cent interest, have not disclosed the investment made in ENRVATE but said that the systems or projects to be tackled by the company would be financed through green bonds, that is, debt specifically earmarked for climate, clean energy, and environmental projects.
Marston told the Financial Gleaner that ENRVATE already has verbal commitment for financial backing but is awaiting the term sheet before saying more.
Concurrently, the company is looking to enter discussions with local and international financing institutions for other green financing. Marston is also mulling over the idea of listing the new venture on the Jamaica Stock Exchange to raise equity capital for the business.
“Electricity in Jamaica is one of the highest in the world and region, and despite it being so expensive, most businesses and homes use electricity inefficiently. What ENRVATE will do is by measuring your electricity, we will work with you and help you bring your monthly costs down,” he said.
“Let’s say a client pays $50,000 towards their energy bill monthly but wants to save $10,000, what we will do is borrow the money and then lend it to the clients, and in doing so, work to ensure that the client gets the desired monthly saving. But there is also the factor of the client contributing to a cleaner environment that’s not necessarily in the financials,” he added.
Once their energy systems have been commissioned, customers will be required to make monthly payments to ENRVATE to cover the financing and installation. The terms under which clients will repay will vary according to project size and investment.
Tropical Battery, whose core business is in energy storage,will serve as primary supplier of solar batteries for ENRVATE while CAC 2000, which distributes air-conditioning units including Carrier, LG, and Fujitsu and has expertise in electrical and energy-consumption services, will provide equipment and technical expertise.
ENRVATE also has a partner lined up from which it will source solar panels for its business, but Marston did not disclose the company’s name.
The partners will first seek to make a market for ENRVATE from their existing client bases and then shop for new clients – with Marston and Tropical Battery Deputy Managing Director Daniel Melville anticipating that the new venture would hit its stride in about two years.
Tropical Battery has been operating in the battery-storage business for over 70 years. The current version of CAC emerged from a management buyout, done in two phases in the 1990s and the summer of 2000, but before that was known as Conditionedair and Associated Contractors. CAC, which has been around for eight decades, went public and listed on the junior stock market in January 2016. Tropical Battery followed in September 2020.
“We see the future being solar energy, and we are confident that we can provide energy-saving solutions for businesses like hotels, households, by combining our solar expertise along with Tropical Batteries’ storage expertise,” Marston said.