4 Strategies to Promote Foreign Investment in Renewable Energy in the Caribbean

Photo by Alain Alminana

by Adriana Valencia Jaramillo and Christiaan Gischler

The Caribbean is a region with some of the highest energy costs in the world. The recent 2015 Caribbean Renewable Energy Forum sought to address this issue by gathering key stakeholders to explore investments in renewable energy in the region. To promote sustainable development, investments must be made in low carbon economic growth, which includes exploring opportunities for developing infrastructure for regional integration. Decision makers present at the event, including Inter-American Development Bank President Luis Alberto Moreno, suggested taking a coordinated approach to transform the Caribbean’s energy sector.

Participants at the event discussed creating a green energy roadmap for the Caribbean to help address issues of global warming in the region, provide a model for sustainable energy, to improve competitiveness, energy security and to make energy more affordable.  Discussions held by the participants made loud and clear that more investment in sustainable energy is needed. Sustainable energy includes energy efficiency, renewable energies, cleaner fuels such as natural gas and the regulatory framework required to adopt these technologies.  The following four strategies could be used to promote such investment:

1. Increase the impact and effectiveness of energy diversification strategies through greater coordination of initiatives within the region. This will avoid the duplication of efforts and projects.
2. Increase access to funding resources from public, private and multilateral sources for sustainable energy for sustainable energy investments through the region. Cohesive and coordinated regional architecture framing the relationship among stakeholders will add value in the most efficient and cost effective manner.
3. Involve the private sector in investments because there is not enough public financing for integral solutions for sustainable Energy.
4. Have governments play a role in creating an environment to allow private sector participation/ attract investment.

At the forum, President Moreno and President William Warren Smith of the Caribbean Development Bank announced a $71.5 million loan and grant package to create a Sustainable Energy Facility for Eastern Caribbean countries, focused on geothermal development. This massive investment will promote energy security in a region that has long been tied to the volatility of oil prices, and it will provide a sustainable energy future for the region. President Moreno said, “I look forward to working together with the CDB and the countries to realize the dream that has existed in the Eastern Caribbean around changing their energy matrix and significantly making energy more affordable to the people of these countries.”

At the forum, the Caribbean Community Secretariat (CARICOM) in cooperation with the IDB, the Japan International Cooperation Agency (JICA) and the German Development Cooperation Agency (GIZ) announced that they would help  the region meet its sustainable energy targets, particularly for energy efficiency.

Part of the effort to help the region diversify its energy mix includes a discussion of the importance that natural gas could play in the region.  The US Department of Energy and the IDB convened a work shop to discuss supply chain and  options  for financing natural gas investments. To learn more about the feasibility of including natural gas in the Caribbean energy mix, download our new study here.

_{Photo by Alice Driver}

 

 

 

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