Caribbean Development Bank Press Release
The President of the Caribbean Development Bank (CDB) Dr. Gene Leon has cited the transition to sustainable energy as a critical imperative for regional development, speaking at the Turks and Caicos Energy Forum in Providenciales. Although alternative forms of energy — especially solar, wind, and ocean resources — are in unlimited supply in the region, the Caribbean is one of the most energy import-dependent regions in the world, with CDB’s 19 Borrowing Member States deriving more than 90% of their commercial energy from imported petroleum. The price of electricity in the region is among the highest in the world, averaging US$0.28 per kilowatt hour in 2019. High electricity costs increase import bills, worsen terms of trade, erode competitiveness, and stymie investment, while also affecting economically disadvantaged people who spend a greater share of their disposable income on energy.
Dr. Leon laid out five priorities for the transition: improving energy efficiency; diversifying energy sources; incentivising the private sector; investing in strategic partnerships; and using innovative, flexible, and affordable financing instruments. He cited a CDB and Inter-American Development Bank study establishing that renewable energy could generate 50 to 100 times peak domestic electricity demand in the region, and noted the significant geothermal resource potential and emerging opportunities for producing ammonia and green hydrogen. “With limited fiscal space available to governments, the private sector must play a leading role in driving this transition. There is more than enough room for households, small private investors, private utility companies, and large private independent power producers to invest in various sustainable energy transition projects,” Dr. Leon said. Financing options include public-private partnerships, feed-in-tariffs, renewable energy auctions, private equity capital and on-bill instruments targeting micro, small and medium-sized enterprises and households.