The Caribbean Development Bank (CDB) has approved a US$34.8mn loan to the Government Power Company (GPC) of Dominica for the construction of a 10MW geothermal power plant in a bid to strengthen the region’s energy security, reduce the production costs of electricity, and lower carbon emissions within the sector.
The construction of the plant follows significant strides in the development of geothermal energy within the Caribbean, especially within Dominica. Estimates suggest that the geothermal potential lying underneath the surface of the island could provide electrical power capacity up to 50-times the current peak demand (approximately 18MW).
CDB’s funding – with resources from the Inter-American Development Bank and the Government of Canada – covers 51% of the total project costs, with the CARICOM Development Fund contributing 22%, and the remaining amount as equity from the GPC.
Therese Turner-Jones, CDB’s Vice President of Operations, commented, “This plant will go a long way in helping Dominica achieve its sustainable energy goals and transition from fossil fuel-based electricity generation to entirely renewable sources.”
Change is in the air
Currently, Dominica imports more than 90% of its energy, 70% of which is diesel-generated. Harnessing the abundance of geothermal potential that lies within the East Caribbean region will provide a critical solution for reducing diesel dependence.
Alongside Dominica, other Caribbean nations have received support under the GeoSmart Initiative where a US$9.4mn grant has been approved for test drilling in Grenada, while St. Kitts and Nevis has received US$17mn for the drilling of production wells. Previously, CDB has provided US$27mn to support geothermal exploration in Saint Vincent and the Grenadines.
Joseph Williams, Coordinator of the CDB’s Sustainable Energy Unit, noted the importance of the Dominica funding, stating, “This is a key financial mechanism that helps address the high drilling risk and unlock private investment. The CRG allows for the funding of exploration such that if the drilling is unsuccessful, the funding remains a grant, with government or developer not having to repay a loan.”
By tapping into the potential lying underneath the Caribbean islands, the region is determined to strengthen its energy security and become a resilient player in the race against climate change.