(ZIZ News) — St. Kitts and Nevis is among the borrowing member countries of the Caribbean Development Bank (CDB) set to benefit from a US$20 million loan from the Inter-American Development Bank.
IDB Representative, Joel Branski made the announcement at the launch of the CDB’s Regional Public Private Partnership (PPP) support facility last week.
The loan, called ‘Sustainable Energy Facility for the Eastern Caribbean’, is meant to support energy efficiency and diversification of the energy sector in the region.
“The loan is for $20 million from the IDB. It is expected to leverage financing from the CDB and other partners for at least another US$50 million. St. Kitts and Nevis, Antigua and Barbuda, Dominica, St. Lucia, St. Vincent and the Grenadines and Grenada will all be beneficiaries of this loan which is expected to be approved by the end of this year,” he explained.
Branski outlined some of the reasons why the Inter-American Development Bank is offering the loan to OECS (Organisation of Eastern Caribbean States) countries.
“Private sector alone isn’t always willing to develop geothermal energy given the risk-return ratio in small scale projects. On the other hand, public sector alone has limited fiscal and institutional capacity to develop geothermal energy. The risk of drilling is very high in the early stages of the project which deters private sector investments. Appropriate policy and regulatory framework is not in place and doing PPPs by contracts poses a major challenge due to the difficulty of negotiating those contracts,” he said.
One of the main components of the loan is the use of PPP arrangements in the development of geothermal energy in the OECS.