EU financing Eastern Caribbean geothermal project

Wednesday, November 22, 2017

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The Caribbean Development Bank (CDB) and the European Union on Monday announced the formalisation of an agreement to kickstart the development of geothermal energy production in the Eastern Caribbean.

The EU has granted the Geothermal Risk Mitigation Programme for the Eastern Caribbean the amount of €12 million, to be administered through the CDB.

The project will facilitate the development of up to 60MW of geothermal energy capacity in five countries — Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.

“The €12 million in grant funding will be used to provide investment grants at the exploration phase, as well as technical assistance to support capacity-building initiatives and studies that explore opportunities for, and the feasibility of, interconnection between islands to facilitate the export of electricity by geothermal energy producers,” said a press release from the CDB.

The funding is intended to decrease the countries'‚ dependency on energy imports, thereby reducing their fuel import bills and electricity costs. The annual fuel import bill in the Caribbean is around US$9 billion per year — among the world's highest per capita energy costs.

“The EU grant contribution of €12 million will serve to jump-start geothermal development through co-financing for higher-risk investments required at the early stage services of exploratory drilling, within a programme, which could leverage additional financing of approximately €400 million,” commissioner in charge of international cooperation and development at the European Commission Neven Mimica said Monday.

The EU's contribution is being allocated from its five-year-old Caribbean Investment Facility, which supports investments located in the 15 Caribbean countries that have signed up to the ACP-EU Partnership Agreement. The agreement is known as the Cotonou Agreement because it was signed in Cotonou, the largest city in the West African country of Benin, on June 23, 2000.

It entered into force on April 1, 2003 and is set to expire on February 29, 2020.

Described as the most comprehensive partnership agreement between developing countries and the European Union, the Cotonou Agreement provides the framework for the EU's cooperation with close to 80 countries from Africa, the Caribbean and the Pacific on key matters such as climate change and food security. It established partnership in the areas of development cooperation, political cooperation, and economic and trade cooperation.

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