The Renewable Energy Industry in CARIFORUM Countries

COUNTRY INDICATOR ANALYSIS

4.6.1 | CAPITAL MARKETS

As indicated in the previous assessment the region needs to mobilize some US$60 Billion to complete the transformation work for its grids. This may be estimated at US$6 Billion annually but the national requirements will depend on the energy road map established for each country. In order to maintain the effort and rate of investment in RE and EE, the region will depend largely on available international funding, significant investment from the local financial sector and direct investors. The C-SERMS report estimates that the Caribbean will require US$20 Billion in energy investment to achieve its 2027 C-SERMS targets, which represents a subset of the total transition investment. Given the significant investment required across the region, multilaterals and other international funding institutions alone are unlikely to invest enough to meet the full requirement. Beside sustainable energy investments, the region also has many other development priorities which compete for funds, such as health, education, and public security.

The USA-CARICOM Taskforce report suggests that many of our countries face limited access to capital markets along with unique regulatory and policy frameworks, which can create barriers to realizing the required investments to affect the necessary energy sector transformation. The prevailing high energy cost is believed to contribute to a sustained cycle which also inhibits growth. The IDB in their assessment of the development of the renewable energy sector in the Caribbean, considers the actual investment of US$0.8 Billion between 2006 and 2012, to be small (IDB, 2014). Of this, wind energy attracted over 50%. Dominican Republic benefited from 78% of this investment largely due to its favourable tax incentives. In 2010, Jamaica would have received some investment for wind and small hydro, and Guyana for biomass. In summary, most of their investment did not reach most of the Caribbean territories.

Biomass & Waste

Small Hydro

Small Scale Dist.

Wind

Geothermal

Solar

Dominican Republic Jamaica Guyana Bahamas Haiti Trinidad & Tobago

Suriname Barbados

0 100 200 300 400 500 600 700

Million USD

Source: IDB assessment of RE investment in Latin America and the Caribbean Figure 4.16 | Cumulative RE Investment in Caribbean IDB Countries (2006–2012)

The Renewable Energy Industry in CARIFORUM Countries

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