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Climatescope 2012 Caribbean Case Studies

SOLAR PHOTOVOLTAIC ELECTRICITY – FOR FREE!

Bahamas

The Bahamas has 575MW of installed power capacity, all
oil- and diesel-generated, and is one of three Caribbean
countries to rely entirely on fossil fuels to meet its energy
needs1. Thus energy security is a major concern, and the
Caribbean island nation is striving to diversify its generation
mix. Known as a sunny vacation destination, the
Bahamas holds great potential for distributed photovoltaics
given the high local electricity prices, excellent
insolation and ever declining equipment costs. To better
understand the potential for solar in the Bahamian islands,
the Ministry of Environment has launched a pilot program
to distribute 100 solar water heaters and 33 residential

photovoltaic systems of 2kW to electricity end-users at no
cost. Consumers receiving solar panels will be able to
connect to the Bahamian national power grid, and the
government will monitor system performance to assess the
viability and potential for distributed generation. This pilot
initiative is funded by a grant from the Inter-American
Development Bank (IDB) and the Global Environmental
Facility (GEF), which aims to promote the use of renewables
in the Bahamas and reduce the country’s dependence
on fossil fuels.

 

INTRODUCING SOLAR ENERGY IN BELIZE – UNIVERSITY OF BELIZE PILOT PLANT

Belize

Of 26 Latin American and Caribbean countries, Belize
has the highest share of installed renewable energy
capacity, with 80MW of a total 136MW on line locally.
Still, there is plenty of room for capacity additions since
the Central American country imports 160GWh per year
from neighboring Mexico to meet around 30% of its
electricity needs. Non-renewable capacity is largely diesel
based. Coupled with the power imports, this has resulted
in Belizean consumers paying the third highest electricity
rates in the Latin American and Caribbean region at
$0.23/kWh, on average.
Partly in response, the University of Belize is currently
developing a solar energy pilot plant to study how this
technology can help reduce the country’s dependence

on fossil fuels and whether solar is a more economical
source of power generation. In February 2011, the
Japanese International Cooperation Agency (JICA)
committed $11.2m to develop the project, which will be
located on the university campus and be connected to the
national grid. Power produced will be sold to public utility
Belize Electricity Limited (BEL). An intriguing aspect of
the project is that revenue from the sale of solar power
will be passed along to the University of Belize in the form
of grants for research in clean energy. The project is
expected to be commissioned in August 2012 and stands
to be Belize’s first grid-connected solar plant.

 

SMALL COUNTRY, BIG CLEAN ENERGY POLICY AMBITIONS

Dominican Republic

The Dominican Republic has one of the most ambitious
clean energy policy frameworks among the nations
assessed for the Climatescope. This includes energy
market incentives, equity finance availability and tax
breaks. The country’s two most advanced policies are a
25% renewable energy mandate by 2020 and a clean
energy net metering program. The first relates to utilityscale
low-carbon projects, while the second focuses on
end-users’ contributions to the grid. The two main renewables
targets: 10% of electricity supply by 2015 and 25%
by 2020. The Dominican Republic is one of six Climatescope
nations to have a net metering law in place4 that
allows consumers who own clean energy systems to sell
their excess power back into the grid. The program came
into force in July 2011. Residential end users with systems
up to 25kW in size can participate. Industrial consumers
with up to 1MW systems can also take part. As of April
2012, 35 residential and industrial customers were selling
their excess power back to the grid. The Dominican
Republic’s policy framework is a testament to the country’s
ambitions, but time will tell whether its objectives will
be met.

 

PARTNERING WITH NORWAY TO CUT CARBON EMISSIONS AND ELECTRIFY THE HINTERLANDS

Guyana

Located on the northern coast of South America, Guyana
has made exceptional efforts to preserve its untouched
forests thanks in part to a partnership with the government
of Norway signed in 2009. The agreement created the
Low-Carbon Development Strategy (LCDS), a comprehensive
plan to limit carbon emissions by avoiding deforestation
and preserving Guyana’s forests, which cover over
two thirds of its 215,000 km2 of territory. Through the
LCDS, Norway committed to pay $5 per ton of avoided
greenhouse gas emissions to the Guyana government.
Those funds are then directed to clean energy initiatives
such as the Hinterland Electrification Program, which
seeks to expand energy access in rural regions of the
country mainly inhabited by Amerindian communities.
Guyana currently has an 82% electrification rate, and
most in the hinterlands lack grid access. The program
provides photovoltaic panels to close this gap, meeting
local needs with clean energy deployment. So far, $7m
has been committed.

 

CLEAN ENERGY POST-EARTHQUAKE RECOVERY THROUGH REMITTANCES

Haiti

Haiti’s energy sector had been in a state of crisis for years
prior to 2010’s earthquake. In the wake of that devastating
event, today only 12% of Haitians have access to electricity
and service remains intermittent. Post-earthquake reconstruction
has been slow overall and progress in the energy
sector has been no exception. The non-profit organization
Arc Finance and goods-based remittance company Food
Express saw opportunity in rebuilding through clean
energy deployment. The organizations partnered to create
a program which facilitates the purchase of small scale
clean energy products through remittances. The newly-

created initiative provides solar devices with prices from
$35–$80, which can be purchased by Haitians in diaspora
and sent to relatives living in the island. The small
solar kits replace kerosene lamps, preventing future fuel
costs and reducing health risks. The program’s goal is to
sell 5,000 low-cost sustainable energy products, bringing
electricity and quality of life to Haitians. Similar initiatives
are starting to spread through Haiti. In January 2012,
President Michel Martelly announced plans to commit
$30m in small loans to finance solar photovoltaic kits.

 

BRIDGING THE FINANCE GAP FOR SMALL BUSINESSES AND HOUSEHOLDS

Jamaica

Access to finance is an obstacle to clean energy deployment
in a number of Latin American and Caribbean
countries, which explains why local development banks
have stepped in to close the gap. The Development Bank
of Jamaica (DBJ), for instance, offers two unique credit
lines for renewables and energy efficiency projects
targeting small and medium companies. Jamaica has the
highest retail electricity prices in the Latin America and
Caribbean region. As a result, installing renewable power
systems has the potential not just to reduce small
businesses’ carbon footprints but to cut their electricity
costs and improve their competitiveness.
DBJ launched its first green credit line in 2010 through
the DBJ PetroCaribe Energy Fund. It provided $11.5m to
finance initiatives of up to $173,500 per company,
focusing on the installation of renewable electricity generation
sources and energy efficient practices. The Energy
Fund credit line provided favorable interest rates and
repayment periods of up to seven years. As of February
2012, DBJ had approved $3.7m in loans for small and
medium enterprises.
The success of this first green credit line prompted the
bank to launch a second, this time with a focus on households.
In March 2012, it began accepting loan applications
from homeowners seeking to install photovoltaic systems,
solar water heaters, or small wind turbines. The $1.1m
credit line will provide loans of up to $23,000 apiece with
an interest rate of 9.5%.

 

GREEN RURAL ELECTRIFICATION

Suriname

Suriname has one of the highest electrification rates
among Latin American and Caribbean countries with 97%
of its population connected to the grid. However, none of
its 277MW of installed capacity is represented by renewables
as the country relies solely on large hydro- and
diesel-generated electricity. This may soon change as the
government is developing a $25.9m rural electrification
initiative to unlock the country’s renewable energy potential
while bringing power to isolated communities. At the end
of 2011, the program received support from the Multilateral
Investment Fund (MIF) and the Global Environmental
Facility (GEF), which contributed $1.7m and $4.4m in
grants, respectively. The GEF has pledged an additional
$20.8m through loans to fund the initiative. The primary
project beneficiaries will be 10,000 residents in rural
villages Suriname’s interior. Most are Maroons (African
descendants) and Indigenous (Amerindians) who stand
to benefit from reliable and sustainable access to energy
through renewable sources. The project aims to install
almost 700kW of solar photovoltaic capacity and around
2.7MW of micro hydro plants.

 

GREEN FUND BACKS LOW-CARBON INITIATIVES

Trinidad & Tobago

Trinidad and Tobago is one of three countries assessed
for the Climatescope that relies solely on fossil fuels for
electricity generation.11 Natural gas accounts for 99% of
its 1.8GW installed power capacity, with the remaining
1% from oil and diesel-based facilities. This reliance on
fossil fuels prompted the Ministry of Housing and Environment
to create the Green Fund, a grant program to
support non-governmental organizations seeking to
develop low-carbon projects.
The fund has three main environmental focuses: remediation,
reforestation and conservation. Funding comes from
a special 0.1% sales tax on all Trinidad and Tobago
businesses. Revenues are then channelled to the Green
Fund, which in turn provides grants to the selected
initiatives. While the fund has not supported any clean
energy project yet, it has helped other initiatives aimed at
limiting carbon emissions. In 2011, it awarded $1.75m in
grants to two reforestation and forest preservation
programs and one recycling initiative. Looking ahead, the
Green Fund represents an opportunity for local organizations
to balance greenhouse gas emissions and work
towards a greener economy for Trinidad and Tobago.

 

For further information, please contact:
BLOOMBERG NEW ENERGY FINANCE
Maria Gabriela da Rocha Oliveira
climatescope@bloomberg.net
MULTILATERAL INVESTMENT FUND
Gregory Watson
climatescope@iadb.org
Visit us online at http://climatescope.fomin.org



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