Sustainable 'leasing' to promote renewable energy in Panama

With the growing interest in renewable energies, the practice of processes within the ecological and environmental framework has become an unstoppable aspiration.

All this has been accelerated as a result of the pandemic and the regulatory advances resulting from the new policies that several countries have already adopted in order to fight pollution, climate change and high temperatures.

Currently, banking and the private sphere in particular are being redesigned towards sustainability, which has brought a boom in green financing and investment products, among which leasing or financial leasing stands out, to convert this trend into something habitual and raise awareness about its importance for the sustainability of the planet.

Sustainable banking

For Ricardo Saied, Banistmo's Vice President of Business and Government, the leasing product for sustainable projects seeks to support the energy transition and its clients in financing projects that are aligned with the purpose of the organization to stimulate cities and communities more sustainable, promoting the well-being of all.

“This financing also contributes to the achievement of the Sustainable Development Goals, such as: SDG No. 7 (on affordable and non-polluting energy, by increasing the proportion of renewable energy); SDG No. 9 (on industry, innovation and infrastructure); SDG No. 11 (on achieving more sustainable communities and cities); and finally SDG No. 13 (on climate action)”, he said.

This ends up “allowing our clients to access new technologies with cleaner production mechanisms, renewable energy, energy savings, sustainable mobility, and construction with more environmentally friendly methods and mechanisms,” Saied explained.

In addition, it established that the interested parties receive personalized support from the analysis and feasibility stage of the project; The structuring of the operations is built according to the flow of each client, understanding their business cycles and adapting to them, offering long terms, depending on the type of asset, from which projects of up to 120 months can be financed.

Taking as an example of success an iconic shopping center in the province of Chiriquí, with an interconnected photovoltaic solar system that saves 291.2 tons of CO2 per year, with an installed power of 499.59 KW (1562 modules) and 66.3 MWh/year of power supplied; in addition to an interesting solar park in the province of Coclé, with an interconnected photovoltaic solar system of 20 hectares, with 4,140 tons of CO2 saved per year, an installed capacity of 9.9 MW (33,326 modules) and 13.8 GWh of energy supplied.

An opportunity for rural electrification

In our country, one of the greatest needs that arises is undoubtedly rural electrification, to improve service in certain areas and reach those Panamanians who are not connected, since they live in areas of difficult access.

Today, the Rural Electrification Office attached to the office of the Minister of the Presidency maintains 76 projects to interconnect 3,500 homes and improve the quality of life of 18,000 people, according to official data.

For María Esparza, Business Development Manager of Aggreko in Panama, the figure of sustainable leasing from private support can speed up and help this process.

“The electrification of rural areas is usually associated with the budget available for the execution of projects. The cost of not electrifying can be high when you consider factors such as education, health, and overall development that is brought to a community when it has access to electricity,” she added.

In addition, "a way to speed up this process can be through contracts for determined periods, where the energy rate contributed is paid monthly, without this necessarily representing a long-term commitment such as a PPA, but rather a temporary solution . Aggreko can work with this business model, in addition to offering the option of short, medium and long-term contracts depending on the schedule for budget approval or project execution," Esparza asserted.

He also added that as a strategy to support this important point included within the Energy Transition Agenda proposed by the National Secretariat of Energy, it could be considered starting a pilot plan by identifying a community that requires electrification and developing the technical proposal, as well as the business model that best suits the requirement. The results of this pilot can then be replicated in other communities.

He highlighted the idea of ​​offering Aggreko as an alternative for these communities, with the combination of solar energy together with batteries for storage during the day, and at night, thermal energy with efficient equipment that reduces fuel consumption and obtaining a lower cost, reducing carbon emissions.

Being a model already implemented by this company to 26 populations without electrification, remote and distant from each other in Brazil, where 137 MW were installed under a rental model, since there was no budget available for it, facing the biggest challenge that was that of transporting all the equipment through the Amazon River for a route of more than 20,000 km, using efficient generators to reduce diesel consumption by 8% compared to other equipment, also reducing carbon emissions and providing development possibilities to these communities.

The author is a lawyer, president of the Energy Law and Sustainability Commission of the National Association of Jurists of Panama, co-founder of Mujer y Energía and member of the International Network on Energy, Climate Change and Human Rights.