Five Caribbean Community (CARICOM) countries are to benefit from a European Union grant to the Geothermal Risk Mitigation Programme for the Eastern Caribbean.
President of the Barbados-based Caribbean Development Bank (CDB), Dr. Warren Smith and the Commissioner in charge of International Cooperation and Development, Neven Mimica, Monday signed the Euro 12 million agreement.
The Geothermal Risk Mitigation Programme for the Eastern Caribbean will facilitate the development of up to 60MW of geothermal energy capacity in Dominica, Grenada, St. Kitts-Nevis, St. Lucia, and St. Vincent and the Grenadines.
“The programme will help to increase renewable energies in the Caribbean by supporting the development of geothermal energy,” said Mimica, adding that the grant will serve to jump start geothermal development through co-financing for higher-risk investments required at the early stage services of exploratory drilling which could leverage additional financing of approximately Euro 400 million.
“It will decrease dependency on energy imports – reducing fuel import bills, electricity costs and help to decrease greenhouse gases emissions and other pollutants,” Mimica added.
Smith said that the CDB welcomes the EU-CIF’s contribution to geothermal energy development in the Eastern Caribbean.
“This funding will add momentum to our ongoing efforts to transform the energy sector in the Region, and support our borrowing member countries in harnessing their renewable energy resources. The signing of this agreement represents a strengthening partnership between CDB and the European Union.
“We look forward to collaborating further to support economic growth and competitiveness, and creating a more sustainable future for the people of our region,” he added.
The CDB said that the project will help geothermal energy development in the five islands with isolated electricity markets and high dependency on energy imports.
“They lack the necessary scale to import cheaper fuels, and rely on expensive diesel and heavy fuel oil. As such, electricity tariffs in these states are among the highest in the world,” the CDB added.
It said that geothermal energy would relieve these five states from oil imports, by up to 722,000 barrels per year, as well as lower current electricity prices. Additionally, it is a clean and renewable energy technology that will reduce greenhouse gas emissions and contribute to climate change mitigation.
The funding will be used to provide investment grants at the exploration phase, as well as technical assistance to support capacity-building initiatives and studies that explore opportunities for, and the feasibility of, interconnection between islands to facilitate the export of electricity by geothermal energy producers, the CDB added.