GEORGETOWN, Guyana (CMC) — Caribbean energy services consumers are to benefit from a new initiative being spearheaded by the Caribbean Community (CARICOM) Development Fund (CDF) in collaboration with a number of regional and international organisations including the German-based Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ).

The Guyana-based CARICOM Secretariat said that the Credit Risk Abatement Facility (CRAF) seeks to facilitate ease of access to credit for small and medium enterprises (SMEs) within the region’s energy sector.

GIZ programme manager of the Renewable Energy and Energy Efficiency Technical Assistance (REETA) Programme, Glynn Morris, said all CARICOM citizens as well as anyone who requires energy services that are more reliable, more sustainable, and available where they may not already be available, will be the main beneficiaries.

“This is a business opportunity for financial institutions to access a new market, those energy businesses, who in-turn will provide energy services to customers,” he said, echoing the views of the CRAF’s strategic and implementing partners that the facility is an important emerging modality in the promotion of financing for more sustainable energy services within CARICOM.

A stakeholder validation workshop on the main design elements of the CRAF was held in Suriname late last month and the CARICOM Secretariat said it marked the conclusion of the first phase of the project, which was funded under the REETA programme.

“With regional partners having found common ground on the main design elements of the CRAF at the recently-concluded Paramaribo workshop, the focus has now shifted to Phase 2, which will see the preparation of a detailed design, a fundraising mechanism, and the inception work required for launching and operationalising the facility,” the Secretariat continued.

It said the second phase is expected to receive funding under the Technical Assistance Programme for Sustainable Energy in the Caribbean (TAPSEC), which is financed through the European Union under the 11th European Development Fund (EDF 11), with an additional financial allocation from the German Federal Ministry of Economic Cooperation and Development (BMZ).

The Programme is being implemented by the GIZ, together with the CARICOM Secretariat.

TAPSEC’s involvement in the development of the CRAF will be critical, as the programme also seeks to facilitate the establishment of innovative financing mechanisms for energy efficiency and renewable energy projects within CARIFORUM, with particular focus on their availability to local and regional project developers.

“This engagement is expected to support the programmes and actions within the CARICOM Secretariat that focus on encouraging the use of financial risk mitigation instruments, and blended public private financing structures to reduce the cost of capital; and disseminating and promoting successful models and approaches for creating sustainable markets for renewable energy and energy efficiency,” the Secretariat added.

The second phase is expected to start at the end of this year.