News

The Jamaica Promotions Corporation (JAMPRO) is using packaged investment projects (PIPs) to make it easier for investors to find and evaluate investment prospects in Jamaica. PIPs are essentially investment opportunities that are carefully pre-assessed and prepared for presentation to potential investors, detailing the project’s feasibility, financial forecasts, and the amount of capital required.

“By providing investors with all the information they need in one place, IPAs (investment promotion agencies) can save investors time and money, and increase the chances of successful investment,” explained Norman Naar, vice-president, investments and linkages at JAMPRO.

PIPs were introduced in Jamaica to fill the same gaps and challenges for which they were developed in other countries. They address hurdles such as lack of local information on investment opportunities, lack of local expertise to identify and evaluate investment opportunities effectively, as well as the need to mitigate the perception of high risk through pre-assessed and prepared investment information that inspires confidence.

“PIPs make it easier and simpler for investors to compare different opportunities and understand the terms and risks associated with each through standardisation,” Naar elaborated. “[For example] ROI (return on investment), IRR (internal rate of return) and payback period are useful markers for assessing investment options.”

He was prudent to point out, however, that “investment carries inherent risks, and it is the responsibility of investors to make informed decisions based on their own analysis and assessment of the investment opportunity.

“No guarantees are typically given to potential investors in terms of financial projections and return on investment for PIPs,” he said. “Investors are usually advised to conduct their own due diligence to assess the accuracy and reliability of the information presented in the PIP.”

For an investment promotion agency like Jampro, PIPs are an invaluable tool for distinguishing Jamaica from competing countries, maximising promotional resources by focusing on the most promising investment opportunities and raising awareness of the island’s investment potential.

“PIPs help to attract more foreign direct investment (FDI) to the country at a faster rate as it makes it easier for investors to find and evaluate investment opportunities,” the vice president pointed out. “FDI can lead to job creation and economic growth, which benefits both the IPA and the country as a whole.”

Speaking on the effectiveness thus far in using PIPs to attract investment, Naar disclosed that Jampro has “implemented a version of PIP in the past called ‘Shovel Ready Projects’ primarily in the tourism sector and has had a fair amount of success with that approach.”

“Our more recent approach around PIPs now cuts across a number of key sectors and includes comprehensive financials,” he added. “This has been implemented just over a year now and while we would have closed only one opportunity to date, using this approach has greatly supported our efforts in marketing key investment opportunities in the country and facilitating meaningful dialogue with a number of financiers and investors. We expect this to pick up in the coming months and for us to see some early deal conversions.”

Noting that it is still early days to offer a full assessment of which projects attract investment and which ones do not, Naar reports that initial signs suggest projects demonstrating financial viability and a well-defined business plan are more likely to attract investment. Also, projects in the tourism sector continue to be popular with investors.

“We anticipate that projects looking to leverage special economic zones (SEZs) will be seen as more attractive for investors based on tax and other incentives,” he added. “Some of this is being leveraged by investors in the global digital service sector.”

Based on this experience and analysis Jampro is making tweaks to its PIPs initiative with even more focus on well-structured business plans supported by robust financial data, presenting them in a manner that is compelling and attractive to potential investors.

Additionally, technology will be utilised to enhance the visibility of PIPs.

“We are looking to use technology to make it easier for investors to find and evaluate PIPs,” Naar revealed. “In particular, PIP information is being included on our dobusinessjamaica.com website and similarly, we are exploring how we can leverage other global online platforms that maintain databases of projects for mounting our PIPs to allow investors to browse PIPs and request more information should there be a need.”

JAMPRO has also started to use online advertising and social media to promote packaged investment projects.

Other avenues in their multifaceted approach to the marketing of PIPs include direct outreach to potential investors through discussions via e-mail, phone or in-person meetings to tailor PIP recommendations.

Participation in global investment promotion events, including trade shows and conferences, also serves as a platform to present PIPs to potential investors. Networking efforts engage investors, financial institutions, and organisations like the Caribbean Association of Investment Promotion Agency (CAIPA) through various channels. And exploring partnerships with entities like chambers of commerce and development banks helps to promote PIPs.

JAMPRO’s continuing development of PIPs, as well as improvements in their promotion, will save time and money in presenting and evaluating opportunities for investors who, in turn, will enjoy reduced risk through JAMPRO’s expertise and knowledge of the local investment landscape.

-By Alexis Monteith Business Writer–Jamaica Observer