St. Vincent and the Grenadines receives funding for geothermal energy development
St. Vincent and the Grenadines (SVG) has received a grant of GBP4 mn to support the development of geothermal energy. The grant was approved through the signing of a Memorandum of Understanding (MOU) between the Caribbean Development Bank (CDB) and the Government of the United Kingdom, through its Department for International Development (DfID). The funding, contributed by DfID, complements an additional grant of USD9.7 mn, allocated from resources provided to CDB by IDB from its Clean Technology Fund. The grants will partially finance exploratory drilling in the vicinity of the La Soufri√®re volcano, and assess the feasibility of geothermal resource development for electricity production. “The transformation of the energy sector in our Borrowing Member Countries, to significantly increase energy security and sustainability, is a priority area of focus for CDB. Should this drilling project prove successful and the geothermal resources are proven sufficient to support a geothermal plant, it has the potential to significantly increase economic growth and development in St. Vincent and the Grenadines," said Patricia McKenzie, VP, Operations at CDB. The high costs of electricity in SVG, as well as countries across the Eastern Caribbean, have long been ranked as a major obstacle to facilitating private sector investment and growth. A 2010 World Bank Enterprise Survey ranked electricity costs as one of the biggest obstacles to doing business in SVG. The development of geothermal energy therefore, is expected to facilitate a more efficient electricity market, and underpin a more enabling business environment. “We are delighted to sign this agreement with the Caribbean Development Bank to provide support to geothermal development in St Vincent and the Grenadines as part of our ¬£17m renewable energy programme in the Eastern Caribbean. The ¬£4m grant funding will play a significant role in lowering the cost and risks of the drilling phase for the Government and will improve our understanding of the country' geothermal potential. We look forward to the results of this drilling phase as a step towards improved energy security and lower cost generation in the future," said Colleen Wainwright, Head of Office of DFID. As an active volcano, La Soufri√®re is expected to have excellent geothermal potential. Unlike other renewable energy sources, geothermal energy has the potential to supply base load power to meet electricity demand in St. Vincent. However, geothermal development has significant site-specific geological uncertainties, which make site selection, resource assessment, and even financing difficult. This exploratory drilling project will determine the feasibility of further geothermal development, and suitability for a proposed geothermal power plant. The project will start on December 1, 2016 and is expected to end on October 31, 2017. The Department for International Development (DFID) leads the UK' work to end extreme poverty, deliver the Global Goals, and tackle global challenges in line with the government' UK Aid Strategy.