FLORIDA, USA — The Caribbean Development Bank (CDB) and the Inter-American Development Bank (IDB) yesterday signed a multi-million-dollar loan and grant agreement dedicated to building out geothermal technologies in the six countries that are part of the Eastern Caribbean bloc.

The funds, which will total US$71.5 million, will be administered under the Sustainable Energy Facility (SEF) and will be accessible through public/private to the islands of Antigua & Barbuda, Dominica, Grenada, St Kitts & Nevis, St Lucia, and St Vincent and the Grenadines. The SEF will include technical cooperation, staffing, public outreach and the design of roadmaps of targets and deliverables.

President of the IDB Luis Alberto Moreno explained at the signing at the Intercontinental Hotel that the intention is to diversify the sub-region’s energy matrix by increasing the penetration of renewables, while driving down the cost of energy.

Research by the Economic Commission of Latin America and the Caribbean two years ago showed that the average electricity rates among residential customers using 100 kWh of electricity or less per month was $0.38. The highest was recorded by Grenada, with $0.42, while St Lucia had the lowest, with $0.34. Oil prices have since fallen, by between 30 and 40 per cent, which have resulted in reduced rates.

To Moreno and other players in the industry, that means it’s time to act.

“We have a window of opportunity, and I don’t know how long it will last,” the IBD head said yesterday. “That is for Eastern Caribbean countries, and the Caribbean as a whole, which are largely importers of oil and have been largely dependent on fossil fuel, to change to renewable energy and change in a way that makes the best use of leveraging resources across the institutions.”

“Let’s hit the ground running and make this a reality to assist many countries in the eastern Caribbean [by] changing the energy matrix and significantly changing the cost of energy for so many people,” Moreno added.

Financing for the SEF is pulled from the following sources:

1) a contribution of US$29,435,000 from the CDB to finance projects which meet SEF objectives;

2) a global credit loan of up to US$20 million from the IDB’s Ordinary Capital Resources; and

3) a grant to the CDB of up to US$19,050,000 from the Clean Technology Fund; and another of up to US$3,013,698 from the Global Environment Facility Trust Fund.

The SEF follows on the establishment of the Sustainable Energy for the Eastern Caribbean (SEEC) programme also available through the CDB. Like the SEF, the SEEC is a blended loan/grant facility, facilitated by the UK Department for International Development and the European Union’s Caribbean Investment Facility.

“With resources from CDB IDB, Clean Technology Fund and the Global Environment Fund, the SEF will allow CDB to offer a range of appropriate financing instruments for the purpose of supporting energy sector priorities of the six beneficiary countries,” president of the CDB Dr Warren Smith.

Addressing concern raised about the perceived amount, Smith pointed out that the scale of the energy issues in the Eastern Caribbean are directly proportional to the countries’ small size and should, therefore, not require huge capital outlay.

Meanwhile, the IDB announced that it has a US$1- million deal with Japan and Germany for those countries to share their best practices in renewable energy with the region. Further, it is expected to sign an MOU with Caricom, the CDB and the US Department of Energy next month, to “demonstrate the cooperation of the entities going forward”.