The Ministry of Planning and Sustainable Development announced yesterday that T&T had secured a commitment from the Inter-American Development Bank (IDB) of US$600 million over the next six years for the Energy Fund for Caribbean Sustainability.
The ministry has been working with the IDB to develop an energy project for the last two years. Prime Minister Kamla Persad-Bissessar, first announced the commitment by the Government of Trinidad and Tobago to initiate a Multi-Donor Energy Co-Financing Facility in the region in January in Washington DC at the energy conference hosted by US President Barack Obama.
In February, a memorandum of understanding was signed between the IDB and the Government of Trinidad and Tobago which formalised the framework for cooperation in the establishment of the facility. This initiative involves support from other international donors as well, and is an unprecedented step in addressings the energy issues facing the region
In a letter to Planning Minister Bhoe Tewarie, T&T's Governor on the IDB Board, Gerard Johnson, Head of the Caribbean Desk at the IDB commended the Prime Minister for her bold leadership in initiating this facility. Tewarie also came in for praise for "conceptualising" the fund and for winning enthusiastic support from Caricom heads.
"The idea is to move not only towards cleaner forms, but also renewable forms of energy," Tewarie told the Guardian, giving the example of Dominica, which now obtains "40 per cent" of its energy from geothermal sources, and Barbados, which is moving "increasingly towards solar energy.
"The fund is for the Caribbean region, and especially for Caricom," said Tewarie, who added that to qualify for funding, proposed projects must be viable. "They must make economic sense, they must make sense in terms of renewability and they must be feasible," said Tewarie, stating that the projects would be assessed individually.
The Caribbean Development Bank also has a key role to play in channeling support to OECS member states in this process. The proposed investment period is six years with a target mobilisation amount of US$1 billion.
This facility will be managed by the IDB and will draw on global support and resources to affect structural long-term energy transformation in the region. This IDB pledge adds value by providing additional resources to implement reform of the energy sector in the form of financial support that can be utilised by the states in this region burdened with high debt and narrow fiscal space.
The energy co-financing facility will provide grants for knowledge generation, project preparation, pre-feasibility studies, lending for public sector policy and institutional reforms, opportunities for equity participation, facilitation of public/private partnerships and lending for private sector ventures aimed at enhancing the transformation of the energy sector in the region.
The facility is being designed to provide technical and financial support to Caricom countries with a specific focus on improving energy efficiency, increasing the use of renewable resources and developing alternative fuel electricity generation."If we can manage this properly, we can make a greener zone," Tewarie said.