10 months ago
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Innovative Energy Group Limited, IEG, has signed a distribution agreement with Huawei Technologies that’s projected to achieve US$50 million in sales over five years, amid the Chinese tech company’s push for market share in Jamaica’s fast-growing renewable energy landscape.
IEG says the two-year renewable agreement grants distribution rights for Huawei’s Tier 1 digital power products, including inverters, battery energy storage systems, and power conversion systems, and SCADA monitoring equipment.
Jamaica’s renewable energy penetration currently stands at about 20 per cent. The Jamaican government is aiming to more than double the penetration to 50 per cent renewables by 2030. That goal contemplates utility-scale projects that contribute to the national grid, smaller scale industrial projects and domestic setups.
Executive Chairman and CEO of IEG Nigel Davy says his company will be marketing the products throughout Jamaica and the Caribbean.
“The target countries, of course, are those in the English-speaking Caribbean. We have that reach and we’re actively getting ready to launch our marketing campaign across the region,” Davy told the Financial Gleaner.
Over the past two years, IEG’s subsidiary, IEC, has procured over US$6 million worth of Huawei’s digital power products. IEC has also collaborated Wigton Energy on renewable energy projects at the Sangster International and Norman Manley International airports, and the Essex Valley Agriculture Development Project in St Elizabeth.
Davy said phase three of the Sangster International project is nearing completion, and that IEG has otherwise secured approvals for other projects.
“We don’t want to get ahead of ourselves, so I will exclude those but you’ll hear about another major contract to be signed in the next week or two,” he said.
Huawei says it aims to capture at least 50 per cent market share in Jamaica, and the Chinese company already has another Tier 1 agreement with energy products distributor and manufacturing company, FosRich. Officials from Huawei Technologies Jamaica were not immediately available for comment, but CEO of FosRich Company Limited, Cecil Foster, says his arrangement with Huawei relates to smaller systems whereas IEG appeared to be mainly focusing on commercial grid systems, saying those would be in the order of 100MW, 150MW, “to even 500 megawatt plants”.
“We know that that market exists, but it is a lot slower, and the infrastructure, in terms of expertise, is always going to be huge,” Foster said.
However, given the resource requirements and the two-to-five year time horizon for those large projects, FosRich would rather stick with domestic projects, he said.
Under the deal with IEG, Huawei will be providing renewable energy products, and support for IEG with marketing resources, advanced training, and trade credit facilities.
Davy said the US$50 million sales target is doable, saying IEG will be heavily involved in the deployment of 540MW of new PV solar systems, plus batteries, over the next five years.
“We expect to on-sell Huawei products in those opportunities in the next five years. So that’s a part of the US$50 million. Of course, approximately 10 per cent of those projections that we have will relate to regional sales,” Davy said.
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