The Caribbean region is facing significant energy challenges rooted in its heavy reliance on imported fossil fuels.
According to a press release from the World Bank, with imports accounting for approximately 90% of the petroleum consumed—a stark contrast to the global average of 21%—Caribbean nations are increasingly looking towards renewable energy solutions to enhance their energy sustainability.
Ahead of this curve is Dominica’s geothermal power plant in Laudat, still under construction, set to be the second such functioning facility in the region. The first is located in Guadeloupe.
The World Bank statement further announced that its Board of Executive Directors has approved a new project aimed at improving energy efficiency and expanding the use of renewable energy across Grenada, Guyana, and Saint Lucia, investing a total of $131.87 million.
The Caribbean’s energy landscape is deeply affected by its dependence on aging infrastructure, with 96% of its power generation sourced from diesel-fired plants. This reliance poses significant risks, particularly as small island nations are susceptible to the damaging effects of hurricanes, floods, and droughts.
For example, Grenada has faced economic setbacks due to infrastructural damages brought on by extreme weather, having to allocate 6% of its GDP for rebuilding efforts after Hurricane Ivan in 2004. With many of its generating units nearing the end of their operational life, the urgency for a transition to renewable energy options is more critical than ever.
Along those lines, the Caribbean Efficient and Green Energy Buildings Project will focus on cutting energy consumption in public buildings while boosting the integration of renewable energy systems. Key elements of the project, as outlined by the World Bank, include retrofitting around 500 public buildings with energy-efficient technologies and installing rooftop solar panels to harness solar power. These initiatives aim to reduce energy consumption by at least 20%, which promises to yield both financial savings and environmental benefits. By reducing reliance on fossil fuels, the project is poised to bolster resilience against power outages, a common occurrence in the region.
To create a sustainable energy ecosystem, the project will assist Grenada, Guyana, and Saint Lucia in developing regulatory frameworks that promote investments in green energy. This includes enacting energy performance standards, implementing net billing for solar energy, and crafting policies to facilitate the integration of electric vehicles and charging infrastructure. By standardizing regulations across these nations, the project hopes to unlock economies of scale, leading to substantial cost savings and enhanced energy security across the region.
Structural collaboration stands at the heart of this endeavor. Lilia Burunciuc, World Bank Director for the Caribbean, emphasizes that this project fosters regional cooperation and allows participating countries to leverage shared platforms and resources. The initiative not only focuses on energy transition but also aims to create green jobs while encouraging female participation in the energy sector, addressing gender disparities in this critical industry.
The funding for this extensive project comes from various donors and mechanisms. The World Bank’s International Development Association will provide concessional financing, contributing $40 million to Grenada, $30 million to Guyana, and $30 million to Saint Lucia. Moreover, the Organization of Eastern Caribbean States Commission will receive $3.3 million for pooled procurement at the regional level, while the Caribbean Centre for Renewable Energy and Energy Efficiency will be allocated $0.7 million for technical assistance. Additional support will come from the Global Environment Facility and the Canada Clean Energy and Forest Climate Facility.
“The Caribbean stands to gain significant economic benefits from this project…” concluded Burunciuc.