CDB: Region must "stay the course" with renewables and efficiency
The Caribbean Development Bank (CDB) has stepped up its drive to encourage public and private sector investments in sustainable energy - energy efficiency and renewable energy projects as a matter of priority, in spite of lower oil prices. To this end, the Bank is expanding the range of funding and technical assistance programmes that can be tapped by governments and commercial interests. In a recent interview, Head of the Bank's Renewable Energy and Energy Efficiency Unit, Tessa Williams Robertson said the multi-lateral funding agency was particularly keen to support projects in solar, wind and geothermal energy, as priorities, but would support other renewable energy options such as bio-energy. "We are looking at the inclusion of renewable energy and energy efficiency components in all of our projects wherever the opportunity presents itself," Mrs. Williams Robertson said. This approach is consistent with the Bank's Climate Resilience Strategy, which recognises the critical role of sustainable energy in achieving climate resilience, and contributes to the achievement of targets set within the CARICOM Sustainable Energy Strategy. Mrs. Williams Robertson advised that the Bank is now developing special products to support renewable energy and energy efficiency projects on concessionary terms. Two such special facilities are the geothermal energy development facility and the proposed Sustainable Energy for the Eastern Caribbean (SEEC) Programme. The Bank is in discussions with donors and contributors on the establishment of the geothermal facility. Last year CDB, Inter-American Development Bank (IDB) and Japan International Cooperation Agency (JICA) signed a Memorandum of Cooperation to collaborate on the promotion of Renewable Energy and Energy Efficiency in the Eastern Caribbean, with a special focus on geothermal energy development. "Our objective is to support the development of geothermal - from exploration, studies, all the way through to field development and plant installation. Developing geothermal is not low cost, and much of the investment will need to come from the private sector. It is also highly technical covering a range of disciplines; so it makes sense for us to work with credible developers/investors who have the capacity and the experience," Mrs. Williams Robertson explained in a recent interview. The SEEC is under consideration by EU Caribbean Investment Fund and DFID for grant funding, and is now in the final stages of approval. "We will be blending the CDB market resources with those grant resources to produce a more attractive interest rate for our member countries in the Eastern Caribbean for investing in energy efficiency and renewable energy. Also, we expect to be financing not only investments, but technical assistance for building capacity and strengthening legislative and regulatory frameworks," Mrs. Williams Robertson said. Effective energy efficiency interventions in government buildings and in street lighting will necessitate collaboration between government and the electric utility in an effort to reduce public sector electricity bills. In some cases, the reduced government expenditure could have a beneficial impact on high government indebtedness and fiscal deficits. "Recent declines in oil prices, although welcomed, have not removed the persistence of vulnerabilities associated with high dependency on imported fuels. Even at the lower oil prices, the costs of electricity to consumers is still relatively high, at approximately two to three times those in the USA, and many other countries with which our member countries compete. Consequently, CDB encourages its BMCs to take the longer term view in responding to energy sector challenges," Mrs. Williams Robertson said. CDB has made energy security a cross- cutting theme in its new Strategic Plan 2015 to 2019. This means that energy security is a consideration in all of the technical assistance and investment projects which CDB finances. Additional Background CDB's emphasis on sustainable energy by the Bank is in response to long-standing energy security concerns, including the relatively high cost of energy imports and the impact on economic competitiveness for the majority of borrowing member countries (BMCs). A radical shift in the supply and use of energy to reduce the dependency on imported fuel is urgently required, particularly in the context of persistent economic challenges. The Bank has been providing financing and technical assistance in this area to its borrowing member countries throughout its 45-year history. While this support has been largely for conventional energy, the Bank has occasionally provided funding for renewable energy including via a pilot "alternative energy" initiative in the 1980's. In collaboration with the USA/USAID and under the Regional Energy Action Plan, an Alternative Energy Systems Project produced resource assessments and some demonstration projects utilizing solar, hydro, biomass and biogas in several BMCs. This work was developed further under a Technical Cooperation Agreement with Germany/GIZ during the 1980s. More recently through the Basic Needs Trust Fund (BNTF) Programme, CDB has included renewable energy components in many of its rural and hinterland projects. For example in Guyana, Communities previously without access to electricity have benefitted from the installation of solar PV systems in schools, and community and health centres. An example is the Kwatamang Village, in Guyana where there is no grid-connected electricity supply and residents relied on a few manual hand pumps to access. The inclusion of 700W of PV installed capacity in the sub-project design for the operation of a submersible pump in the borehole has allowed for the distribution of water to five standpipes in the village. This has improved access substantially, and providing for running water at the village primary school and health centre. Water is pumped to the elevated storage tanks and through the distribution network provided by the project. The entire village of 408 persons - 220 males and 188 females, including 65 youth - are beneficiaries of a regular supply. In 2014 the Bank produced a study "A New Paradigm for Caribbean Development: Transitioning to a Green Economy" which examines the merits of transitioning to increased energy energy efficiency and use of renewable energy.