Jamaica walked away from the Caribbean Energy Security Summit held in Washington, DC on Monday with a US$90 million capital injection for a wind farm.
The Jamaica Observer reported yesterday that the 34-megawatt (MW) greenfield wind farm being built by US-owned BMR Energy in St Elizabeth, Jamaica is to receive a US$90-million capital injection by way of a loan through a tripartite arrangement among the Overseas Private Investment Corporation (OPIC), the International Finance Corporation (IFC), and the Government of Canada. The announcement was made by US Vice-President Joe Biden.
Biden hosted the summit which brought together government officials from the Caribbean and Latin America as well as finance, private sector and civil society leaders from the US, Caribbean, and the international community. Guyana was represented by Prime Minister Sam Hinds and Minister of Natural Resources, Robert Persaud.
The summit was intended to push for an integrated approach to clean energy solutions for the mostly oil-dependent countries.
OPIC will be providing US$43 million, or 48% per cent of the funds to BMR and Biden said the loan to Jamaica is the first disbursement by the body, the Observer reported.
“When construction begins in June, it will be a tangible example of what can be achieved when the public and private sectors in both countries come together and meet this challenge head-on,” Biden declared while delivering the keynote address at the summit, the Observer reported. The wind farm, according to BMR, is expected to shave US$500 million, or a quarter, off Jamaica’s $2-billion-a-year oil import bill.
The Observer reported that Jamaica’s Energy Minister Phillip Paulwell disclosed that the BMR project, together with a soon-to-be-announced 20-MW project slated to be undertaken by another American company at a cost of US$60 million, will go a far way in the diversification of Jamaica’s energy supplies. “The message is that the Americans are facilitating their energy sector interests in the region and that, once we have transparent and clear regulatory systems, they will be encouraged to come, and I think Jamaica has demonstrated that,” said Paulwell.
The Observer reported that the United States Agency for International Development (USAID) also disclosed that it will be spending US$10 million over the next five years to help Jamaica clear some of the financial, technical, planning, and co-ordination hurdles on its way to achieving the 2030 renewable energy target. “Our programme is designed to help the Government [of Jamaica] meet those challenges. For example, in energy efficiency, Jamaica has a wealth of alternative energy sources particularly from the sun. So, we will be helping Jamaica to develop a market for technology that is solar-powered and through that we will be able to reduce the cost of energy for Jamaicans by putting more of that energy onto the grid,” explained Elizabeth Hogan, USAID’s acting assistant administrator for Latin America and the Caribbean Bureau.
She said the funds will be allocated based on the areas of priority, as agreed with the Jamaican Government. “The regulatory reform is certainly a big piece of that as it will take international expertise in addition to local expertise. It will go towards experimentation of some of these alternative energy opportunities that Jamaica has and it will go to the planning and policy regimes; helping the regulatory agencies, for example, [reform] the current regulations in order to allow for more investment in alternative energy,” she said.
The Observer noted that the summit was a follow-up to the Caribbean Energy Security Initiative held last June in Trinidad and Tobago. It highlighted ongoing efforts under the initiative to push for greater co-ordination to achieve energy security for the region.
According to the Observer, during the summit, the World Bank presented a proposal to create a Caribbean Energy Investment Network, which is intended to improve communication among development partners and help Caribbean countries match external support with local energy goals.
Transformation
Meantime, in a joint statement issued after the summit, the participants which included a number of Caribbean governments as well as international organisations and development banks, pledged their commitment to support the transformation of the energy systems of Caribbean states, to share lessons learned through new and expanded regional information networks, to report progress in relevant fora, and to pursue several initiatives.
Among these are comprehensive, planning-based and research-driven approaches to energy transition, including implementation of pilot and demonstration projects, based on successful models so that individual clean energy projects are part of a fully integrated, climate-resilient energy transition plan toward clean sustainable energy for all.
For the past few years, Guyana has been pursuing the controversial Amaila Falls Hydropower Project (AFHP) but it has stalled. Before US-based Sithe Global pulled out here in 2013 as the developer of the US$858.2 million, 165-megawatt hydro venture, the project was shrouded in controversy as costs escalated.
Caribbean countries at this week’s conference pledged to undertake necessary and specific reforms, including recommendations from the 2013 CARICOM Energy Policy and the outcome of the 2015 Dominican Energy Pact, to support policy and regulatory environments that facilitate the introduction of new technologies favoring sustainable and clean energy that provide legal certainty for investors and improved predictability in price and supply for users. Among the other commitments were to promote and develop, where technically and commercially feasible, affordable no- or lower carbon electricity generation through wind, solar, geothermal power, hydropower, bioenergy, ocean energy, energy recovery from waste, and other clean energies; and energy efficiency measures. It was also recognized that alternative fuels, such as natural gas, can play a useful bridging role.
The participants also pledged open, transparent, competitive and criteria-based processes, including liberalization where cost effective, to procure energy investment and facilitate access to finance for cleaner and climate resilient energy projects and infrastructure. They committed too to data and energy information exchange and coordination with, between, and among countries and stakeholders to minimize duplication and enable the monitoring and evaluation of energy projects to maximize the impacts of efforts toward fully integrated, low carbon and climate-resilient energy transition plans.
A commitment was also made, where viable, to align national legal and regulatory approaches to facilitate greater clean energy investment throughout the region, provided that countries can access finance and other resources on affordable terms, to set the stage for future electrical interconnection in keeping with the goals of Connect 2022.