Tuesday, October 20, 2015

Caribbean: Funding Provided for Development of Possible 60 MW Geothermal Energy

IDB and CDB fund Sustainable Energy Facility for Eastern Caribbean (News Release)

The Inter-American Development Bank (IDB) and the Caribbean Development Bank (CDB) have signed off on the Sustainable Energy Facility, a US$71.5 million loan and grant package that will fund renewable energy and institutional capacity projects in six Eastern Caribbean countries.

The IDB noted that Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines are island states 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 SEF 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 SEF.

Geothermal power plants established in each of the Eastern Caribbean countries with potential could have aggregate capacity of approximately 60 MW, which would substitute the equivalent amount of diesel and heavy fuel oil currently used for baseload power generation. This would displace an average of almost a million barrels of oil per year, which is equivalent to a 44 per cent 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 SEF, Eastern Caribbean governments and geothermal developers will be encouraged to form public and private partnerships. The PPP 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.

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