BELEM, Brazil (Reuters) — Five Caribbean nations are joining forces to advance geothermal energy development by pooling technical expertise and separating drilling operations from power plant construction. The strategy aims to overcome longstanding financing challenges and cut costs in a region burdened with some of the world’s highest electricity tariffs.
After several unsuccessful attempts dating back to the 1970s, **Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines** announced following the U.N. COP30 climate conference in Brazil that they are working toward delivering clean, affordable energy. High electricity bills continue to strain household budgets across the Caribbean and undermine the competitiveness of the tourism sector.
According to the Organisation of Eastern Caribbean States (OECS)**, the five nations collectively hold an estimated **6,290 megawatts (MW) of geothermal potential—enough to power the region many times over. Harnessing this resource could save each country between **$5 million and $30 million** annually by reducing diesel imports by more than 90%.
Electricity tariffs in the region currently range from $0.29 to $0.40 per kilowatt-hour**, more than double the U.S. average of about $0.15, OECS data shows. The countries rely heavily on small, isolated grids and ageing diesel generators that require costly imported fuel.
In Saint Lucia, geothermal exploration has intensified ahead of civil works. The country also revised its drilling contracts this year to prevent cost overruns similar to those experienced in Dominica, said Arthur Antoine , technical director of the Renewable Energy Sector Development Project.
Dominica’s 10 MW geothermal plant**—expected to meet more than 75% of the island’s electricity needs—has taken over a decade to secure its $68 million** financing package from multiple lenders. Completion is anticipated early next year.
Globally, geothermal energy is gaining new momentum as advances in drilling and heat extraction technologies make development more feasible.
Grenada, meanwhile, has relied exclusively on grant funding for exploration. While this has led to delays and design modifications, it has protected taxpayers from financial risk, according to a spokesperson for the geothermal project management unit at the Ministry of Climate Resilience, the Environment and Renewable Energy. The country hopes its planned **15 MW** project will begin generating power in **2033**, supplying the equivalent of every household’s 2024 consumption level.
“The sizing is based on current demand and resource confirmation, and future expansion will depend on verified resources and available financing,” the spokesperson said in an emailed statement.
Climate Risks Add Urgency**
Successful geothermal development could significantly strengthen the fiscal resilience of island nations vulnerable to extreme weather events, said **James Fletcher**, climate envoy for the Caribbean Community (CARICOM), a 21-member grouping where hurricanes routinely damage infrastructure and interrupt diesel fuel shipments.
“Caribbean governments just don’t have that kind of fiscal space that would allow them to borrow, as it has been eroded by having to constantly respond to extreme weather events,” Fletcher said on the sidelines of the COP30 conference last month.
The OECS is supporting joint management of drilling rigs to reduce upfront costs—an obstacle that previously hindered Dominica’s efforts to secure financing, said **Chamberlain Emmanuel**, head of the organisation’s Environmental Sustainability Division.
**Saint Kitts and Nevis**, which plans to begin drilling in early **2026**, has tripled its project capacity to **30 MW**, secured financing in advance, and backed a debt-funded private power plant to mitigate risks, said **Albert Gordon**, general manager of the Nevis Electricity Company.