Barbados will be increasing its investment in renewable energy capacity and energy efficiency with US$30-million loan approved by the Inter-American Development Bank (IDB) under the Sustainable Energy Investment Program (Smart Fund II).
A continuation of the Smart Fund I programme, the Sustainable Energy Investment Program (Smart Fund II) will focus on developing financial instruments along with technical assistance to promote the introduction of renewable energy and energy efficiency measures in small and medium-sized enterprises (SMEs).
“Innovative financial mechanisms, enhanced skills coupled with smart technologies are critical for the energy sector in Barbados,” said IDB Energy Specialist Veronica R. Prado. “This will be an opportunity to greatly promote the faster adoption of renewable energy and energy efficiency measures”.
In addition, the IDB Smart Fund II programme intends to instal at least 11 Megawatts (MW) of distributed generation in public buildings, invest in efficient and smart technologies during the execution period. Barbados has already advanced in that regard since the number of distributed grid-connected photovoltaic increased from 10.4 MW in 2015 to 27 MW by 2017.
The programme will implement energy efficiency measures in the public sector by financing the retrofit of buildings, including hospitals, clinics, schools, administrative, and operational facilities coupled with renewable energy technologies. The same approach will be used to promote renewable energy and energy efficiency in SME and also in the tourism industry given its importance to the Barbados’ economy and high potential for energy and financial savings.
The project will also finance the expansion of the government’s electric vehicle fleet, including charging infrastructure It will also complement the electromobility pilot program currently being implemented in the country with the IDB support.
The Eastern Caribbean island will, therefore, reduce its dependence on imported fossil fuels, which account for 94.6 per cent of its energy matrix, though it is a small gas and oil producer. The country’s energy mix also includes natural gas, biomass, and solar energy.
Barbados Light & Power Limited, a private vertically integrated utility, has an installed capacity of 256.6 Megawatts (MW) and 85 per cent of its power generation is based on heavy fuel oil and 15 per cent on diesel fuel. Moreover, the high cost of international oil prices has affected Barbados’ economy in the last two decades.
The IDB credit line loan is US$30 million for a 24-year term, with 6.5 years period of grace and an interest rate based on LIBOR. The operation also contains an investment grant of $15.4 million from the European Union, Caribbean Investment Facility (CIF).