December 18 (Renewables Now) - The Inter-American Development Bank (IDB) and the Caribbean Development Bank (CDB) have committed to provide some USD 85.6 million (EUR 75.3m) for geothermal development in five Eastern Caribbean nations.
The deal builds on an earlier partnership between the two lenders from 2015 when they provided a USD-71.5-million loan and grant package to back renewable energy in six Eastern Caribbean countries. The latest financing will be an expansion of the programme and will encompass Dominica, Grenada, St Kitts and Nevis, St Lucia and St Vincent and the Grenadines.
The Sustainable Energy Facility for the Eastern Caribbean (SEF-Expanded) will be funded via three tranches. The package includes a USD-60-million loan from the Green Climate Fund (GCF), with a 20-year term, for the development of geothermal plants and transmission lines. GCF will also provide USD 16 million in the form of contingent recovery grants for exploratory drilling initiatives, which will also benefit from USD 5.6 million in grants from the Italian government. The third component of the package will be for USD 4 million in the form of GCF grants, to be used for capacity building for geothermal analysis, environmental and social safeguards.
Apart from promoting the development of geothermal projects, the financing initiative will help the specific countries cut their carbon footprint and lower dependence on fossil fuels. The lenders also expect to attract more private investments in the geothermal sector.
(USD 1.0 = EUR 0.880)