The Inter-American Development Bank (IDB) has approved a US$70 million loan to help Barbados reduce its dependence on fossil fuels by diversifying its energy matrix, promoting sustainable energy sources, and supporting power saving efforts.
According to an IDB press release, the operation, which is the second in a series of two programmatic loans for the sector, will support policy and legislation aimed at promoting renewable energies as well as the rational and efficient use of fossil fuels.
As a result, Barbados is expected to reduce its electricity consumption by 19 percent by 2029, the release added.
Greater efficiency will also enable Barbados to cut its oil import bill by about 30 percent over a 20-year period, yielding cumulative savings of approximately US$600 million.
And this could have a dramatic economic impact on the population at large, as soaring prices of oil used for power generation mean that Barbados residential users currently face one of the highest electricity rates in the world — US$0.30 per kilowatt hour.
Under the plan, the release noted, the country will aim to have 29 percent of electricity consumption come from renewable sources such as photovoltaic, solar water heating, wind, biomass cogeneration, and waste-to-energy projects by 2029.
The programme will also advance plans to promote the use of biofuels by blending ethanol with gasoline, encouraging the use of natural gas as a substitute for other types of fossil fuels, and replacing incandescent light bulbs with more efficient alternatives.
The programme, the release said further, will enable Barbados to reduce greenhouse gas emissions by around 4.5 million tons of carbon dioxide equivalent by 2029; it will support energy sector climate-change initiatives; and will help fund institutional strengthening, public education and awareness, and capacity building drives to promote sustainable energy and conservation initiatives.
The loan is for a 20-year term, with a five-year grace period, and at a variable interest rate based on LIBOR (London Interbank Offered Rate); the LIBOR rate being the average interest rate that leading banks in London charge when lending to other banks.
