A Tale of Two Conferences

The best, and worst, part of my job is that I have to go to many conferences and seminars.

When they are done well they are stimulating, generate solutions and you come away having met great people and with an inspired outlook. When they are done badly, I know many of you have experienced those and understand my frustration so I needn’t go any further.

I recently had the pleasure of attending two great conferences. One put on by the Development Bank of Jamaica (DBJ) on Venture Capital Funding (VC) in Kingston and the other by consultancy firm KPMG on Caribbean Infrastructure in Miami. Both were excellently done.

Finding alternate forms of financing was central to both events. The creation of venture capital funding will help to mitigate a relatively high cost of doing capital for the Jamaican private sector. For a Government that is struggling to reduce debt and provide a high standard of services, public-private partnerships are an attractive option. And I am not just talking about Jamaica when I mention Government, many of the nations at the conference spoke about their financial restraints being a hindrance to necessary developments that will spur growth.

Public-private partnerships, often referred to as PPP or  the more hip P3, are one of the ways that many Governments are looking to finance major infrastructure. PPP is not new to Jamaica, Denise Gallimore of the Development Bank of Jamaica pointed out that the model has been used to finance development of the Sangster International Airport and one of Jamaica’s major roads, Highway 2000.

The model is being proposed for a number of major projects: the upgrading on the Norman Manley international Airport, three projects within the water sector and a host of others being prepared for consideration.

The DBJ is also pushing for a venture capital framework in Jamaica to open up access to capital for businesses here. Interest rates are currently creeping upwards and not only does this make borrowing more expensive but it is more difficult for a business to forecast its costs.  Not good!

Venture capital firms give businesses the necessary capital to grow but also take a piece of equity and in some cases a level of management control.  It can be both a blessing and a curse. Most see it as a blessing, however, as these firms will be able to lean upon the experience and connection of the VCs.

The purpose of the conference was to advance an understanding of the model and to begin to help businesses to prepare themselves to take advantage of the opportunities. Not only is the Development Bank of Jamaica preparing to launch a venture capital fund, the Bank is also beginning to set the framework for international funds to invest in local businesses.

While I understand how venture capital funding will be a boon to the local business community, I see the prospect of the PPP projects as being transformational for Jamaica. The UK is a leader in PPP arena and has used it effectively for infrastructure and other projects. That experience will be invaluable for Jamaica and the other nations in the Caribbean who are just beginning to use it.

For my own part, I will be looking to advance the PPP agenda locally and throughout the Caribbean as a development tool for our nations. So much so that UKTI might even stage an interesting conference in February 2014… watch this space!