Govt encouraging more energy investment in TT

GOVERNMENT will use funds from the Oil Revenue Stabilisation Fund and improved venture capital legislation to encourage greater local equity investment in Trinidad and Tobago’s energy sector. This was disclosed yesterday by Minister in the Ministry of Finance, Ken Valley. Speaking with reporters at the 2005 TT Petroleum Conference at the Hilton Trinidad, Valley said Government and natural gas export task force chairman, Prof Ken Julien, were on the same wavelength about the need to increase local equity participation in the energy sector. “Part of the plan is for the Government on its own as part of its Revenue Stabilisation Fund to use some of the money for investment in the energy sector.

So the Government would be demonstrating its commitment to that principle by getting involved,” he said. Valley said improved venture capital legislation currently before Parliament would offer another avenue for increased local equity participation in the energy sector. “Whereas the (Venture Capital) Act at present excludes the energy sector, the new legislation proposes to include the energy sector. More importantly we are talking about higher levels of investment,” the minister explained. He identified a venture capital fund with a $20 million maximum with the potential to go to $100 million and investment in equity capital of up to $50 million in companies as two of the important features of the new legislation. Valley said, “It means that infrastructure will be there. There is nothing further that the Government would have to do. One can use a venture company capital to do that.”

Asked if local companies would get tax breaks if they were to become more involved in equity participation in the energy sector, as foreign energy companies were already receiving tax breaks for greater equity involvement, Valley said Government “is obviously not going to be giving tax benefits and so on.” The minister said foreign energy companies do not receive tax breaks for equity involvement in the sector. “What you do, you may have it tax-paired and if local equity gets into the sector, they will qualify for the similar tax benefits that are existing. The only tax benefit that is given by Government for equity investment right now, is via the venture capital route. One can use that also given the new provisions that are in the legislation to invest in the energy sector,” he stated.

Valley was confident that there were many local companies exploring their options where equity investment in the energy sector is concerned. He singled out the Neal and Massey Group of Companies and the Ansa McAl Group as two corporate entities which were giving serious consideration to equity investment in the energy sector. “I think it’s a natural progression. I think it’s going to come,” Valley said. He added that Government will always do what it can to facilitate investment in the energy sector. During his address to the conference’s opening session, Prof Ken Julien hailed the Clico Group of Companies and chairman Lawrence Duprey for being a pioneer with regards to equity investment in TT’s energy sector.