SEVILLE, Spain, (CMC) -The Development Bank of Latin America and the Caribbean (CAF), says it has approved a US$100 million loan to the Bahamas to reform energy sector in the country.

It said that the loan will support the modernisation of electricity infrastructure, the expansion of renewable energy, and improve energy affordability and resilience for Bahamian households and businesses.

The loan was approved by CAF’s board of directors during its meeting here and marks the first sovereign financing to the country since it became a shareholder of the institution in November 2024.

The approved resources will support the Bahamas government in the implementation of key elements of its National Energy Policy, including strengthening the regulatory framework, modernising infrastructure, promoting renewable energy and improving energy efficiency.

The operation is aligned with CAF’s Green Agenda and will contribute to the country’s efforts to mitigate climate change by transitioning to cleaner and more sustainable energy sources.

With this approval, the Bahamas will be able to improve the reliability of its electricity system, reduce generation costs and increase its resilience to climate shocks. The reforms also seek to attract new investments in energy infrastructure.

“The Bahamas is one of CAF’s newest shareholder countries, and we are proud to approve our first sovereign operation in support of its national commitments to more sustainable energy,” said Sergio Diaz-Granados, CAF’s executive president.

“This approval reflects our commitment to be a reliable partner in the country’s path towards sustainable and inclusive growth. We understand the unique challenges faced by small island states and stand ready to further deepen our collaboration with the Bahamas,” Diaz-Granados added.

CAF said that the programme will also strengthen institutional capacities and lay the groundwork for long-term investments in the country’s energy transition.

“With this operation, CAF reinforces its support to the Caribbean, advancing its mission to provide financial and technical solutions tailored to the needs of its member countries,” it added.