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Sustainable Energy Facility for eastern Caribbean to be supported by CBD and IBD
The Caribbean Development Bank (CDB) and the Inter-American Development Bank (IDB) have signed off on the Sustainable Energy Facility – a US$71.5 million grant package – that will fund renewable energy and institutional capacity projects in six Eastern Caribbean countries.
The signing by presidents William Warren Smith of the CDB and Alberto Moreno of the IDB took place Tuesday, ahead of the start of the annual Caribbean Renewable Energy Conference.
The financial institutions noted that Antigua & Barbuda; Dominica; Grenada; St. Kitts & Nevis; St. Lucia, and St. Vincent & the Grenadines are island nations with small and isolated electricity markets, lacking the scale necessary to import cheaper fossil fuels, such as natural gas, and inadequate development of renewable energy potential. And it said the Sustainable Energy Facility can change the energy matrix of those countries and increase energy security, which is critical for these economies to be competitive.
“This operation has the potential to trigger a radical transformation of the energy matrix of the Eastern Caribbean,” said Christiaan Gischler the IDB’s team leader of the Sustainable Energy Facility.
“Geothermal power plants established in each of the Eastern Caribbean countries with potential could have aggregate capacity of approximately 60MW, which would substitute the equivalent amount of diesel and heavy fuel oil currently used for base-load power generation. This would displace an average of almost a million barrels of oil per year, which is equivalent to a 44 percent reduction in oil imports or US$56 million per year.”
Gischler added that that public private partnerships could be a mechanism by which many of the energy projects could be successfully delivered.
“Under the Sustainable Energy Facility, Eastern Caribbean governments and geothermal developers will be encouraged to form public and private partnerships. The public-private partnership approach will encourage private partners to assume the loans and minimize the risks associated with the geothermal development. Governments will be able to diversify their energy mix without increasing their debt load,” he said.
A component of this facility is concessional financing from the Clean Technology Fund. The availability of these resources will catalyze the private sector capital and expertise required for developing sustainable energy projects in the region.
Tessa Williams-Robertson, Head of CDB’s Renewable Energy and Energy Efficiency Unit, highlighted the critical importance of a Facility like the Sustainable Energy Facility that makes concessional resources available for investment in sustainable energy.
“A substantial focus of the Sustainable Energy Facility will be to provide seed resources to CDB’s GeoSMART Facility which is being established to support geothermal energy development in the region. GEOSMART will provide financing instruments appropriate to address the level of risk associated with each stage of the geothermal development”, she said.
