The Inter-American Development (IDB) and the Japan International Cooperation Agency (JICA) will fund a $30-million project to promote electricity conservation in Jamaica and improve traffic flows on Kingston’s congested roads, the IDB has anopunced.

The project will also enhance the capacity of Jamaica’s Ministry of Energy to improve electricity sector planning, the IDB said in a press statement, noting that Jamaica’s dependence on petroleum imports and the inefficient use of energy resources seriously impacts government expenditure and debt, which is currently estimated at around 124 per cent of GDP.

“The absence of a complete Urban Traffic Management System (UTMS) to synchronise 161 traffic lights is a key factor causing congestion in the Kingston Metropolitan Region, contributing to inefficient urban mobility and unnecessary fuel consumption,” the Washington-based bank said. “A better use of energy resources would free public funds through lower government bills and reduced oil imports, helping Jamaica further reduce debt.”

It said this Energy Management and Efficiency Programme promoted energy efficiency and conservation as one approach to bring down Jamaica’s fuel bill and mitigated against volatile oil prices while contributing to the reduction of greenhouse gas emissions.

The project targets the demand side of electricity generation and road transport sectors, which consume over 45 per cent of the country’s energy. The primary focus of the programme is on replacing outdated equipment and inefficient systems consuming electricity in 73 health, education, and public agency government facilities, while demonstrating the attractive economic and environmental return of energy-efficient retrofits and investments, the IDB said.

The project will also finance the purchase and installation of equipment to complete the UTMS in the Kingston Metropolitan Region, taking advantage of the integrated use of information systems and telecommunications technology to better monitor and manage traffic. It also addresses the issue of capacity building to strengthen public institutions critical to the promotion of energy efficiency in Jamaica.

“For these investments to be sustained or scaled-up, targeted investments are needed in project management, electricity planning and supervision on a wide range of energy-efficiency projects,” the bank said.

The project is a Specific Investment Operation in which $15 million will be financed by the IDB’s ordinary capital resources, while parallel financing totalling $15 million will be provided by the JICA through the Co-financing for Renewable Energy and Energy Efficiency (CORE) mechanism.

The IDB loan is for a 24-year term, with a 6.5-year grace period and a LIBOR-based interest rate.