OECS Media Release
Tuesday, November 6, 2022 — The International Renewable Energy Agency (IRENA), through the SIDS Lighthouses Initiative, in collaboration with the Organisation of Eastern Caribbean States (OECS), hosted a two-part capacity building event at the Beachcombers Hotel in St. Vincent and the Grenadines from November 28 to December 2, 2022. This training workshop was a follow-up to one held from November 22-24, 2022, at the Harbor Club Hotel in Saint Lucia. The goal was to enhance the capacities of local actors in different Caribbean countries in structuring financing deals for renewable energy projects dubbed, “Project Financing and Facilitation in the Caribbean.”
Improving the capabilities of local policymakers, regulators, and power utilities on the practical design of key clauses for risk allocation and pricing, and enabling their ability to negotiate these clauses, is still needed to enable the development and use of Power Purchase Agreements (PPAs) fit to increase investments in renewable energy projects in the region. The training workshop was delivered in two parts. Firstly, via a roundtable event focusing on lessons learned from existing projects, to create a mutual understanding of the concrete needs of project developers, investors, lenders, and governmental bodies. Secondly, by providing training on the design of bankable PPAs for local regulators and utilities.
A Power Purchase Agreement (PPA) is a long-term electricity or energy supply contract between two parties, usually between a power producer (seller of electricity) and a customer (the buyer of electricity such as an electricity company or trader). It defines the conditions of the agreement, such as the amount of electricity to be supplied, the negotiated prices, accounting, and penalties for non-compliance. It is a beneficial form of financing renewable energy projects such as solar, wind, geothermal, hydro, and biomass, to name a few. The bankable PPA is a stabilizing factor in long-term power delivery since it tells you the legal and financial obligations of the seller and purchaser of electricity. All of the OECS Member States that are developing renewable energy projects such as geothermal, solar, or wind power, will most likely use the PPA to secure financing for the construction and operation of their power plants.
At the opening ceremony, the Prime Minister of St. Vincent and the Grenadines, Dr. Ralph Gonsalves, gave the feature address in which he explained the vision of the Government of St. Vincent and the Grenadines in the areas of hydro, solar and geothermal energy through the framework of a National Energy Policy. He welcomed the participants and stated that St. Vincent and the Grenadines has experience in setting up an efficient PPA which protects the nation and warned that the advice of experts must be taken seriously. He further explained that to succeed in the development of his country’s geothermal resources, it will require sound technical advice, transparency, and patience.
Remarks were also delivered virtually by Mr. Gubuz Gonul, Director of Country Engagement and Partnership at IRENA, who gave a comprehensive outline of IRENA’s work and partnership to build capacity and provide technical assistance to help Small Island Developing States (SIDS) to meet their national energy targets and climate commitments under the Paris Agreement. Moreover, he spoke of the collaboration between the OECS GEOBUILD Programme and the Ministry of Urban Development, Energy, Airports, Seaports, Grenadines Affairs, and Local Government with IRENA, to make the workshop possible and successful.
In addition, Ms. Judith Ephraim-Schmidt, OECS Programme Director for Sustainable Energy, gave brief remarks in which she thanked IRENA for the opportunity for the OECS Commission to join in delivering this timely capacity-building intervention to the region through the OECS Geothermal Energy: Capacity Building for Utilisation, Investment, and Local Development (OECS GEOBUILD) Programme, which launched last month. This three-year comprehensive capacity-building programme for geothermal energy is funded by the Caribbean Development Bank (CDB) with resources from the Inter- American Development Bank (IDB), and the European Union Caribbean Investment Facility (EU-CIF). Ms. Ephraim-Schmidt spoke eloquently of the urgent need to accelerate our transition toward increased energy security, energy independence, and energy resilience.
The OECS GEOBUILD Programme seeks to work with OECS Member States in building capacity so that they can be better able to develop their geothermal energy in a timely, safe, and sustainable manner. Geothermal energy is generated from heat produced in the earth’s core. It is a clean, reliable, renewable natural resource that can be used to bring affordable electricity and several other benefits to OECS Member States. Several OECS countries have an abundance of geothermal resources, including St. Kitts and Nevis, Saint Lucia, the Commonwealth of Dominica, St. Vincent and the Grenadines, Grenada, and Montserrat. There is an operating geothermal plant at Bouillante Guadeloupe, which has been operating since 1984.
The objective of the training workshop was in keeping with IRENA and the OECS GEOBUILD Programme – to enhance the capability of policymakers, power utilities, and regulators to design and negotiate bankable PPAs – with the final goal of securing an effective commitment of financial resources for the development of renewable energy projects in the Caribbean SIDS. In short, to build capacity and investment in the OECS.
The participants included representatives of government ministries including regulators, power utilities, and project developers from Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia and Saint Vincent and the Grenadines, Belize, the Bahamas, Barbados, the Dominican Republic, Trinidad and Tobago, and Guyana. Some representatives joined virtually via the Zoom platform.
IRENA, with a membership of 168 countries, is the leading global intergovernmental agency driving the global energy transition and provides state-of-the-art data and analyses on technology, innovation, policy, finance, and investments. IRENA drives the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar, and wind energy in the pursuit of sustainable development, energy access, and energy security, for economic and social resilience and prosperity and a climate-proof future.
About the OECS
OECS is an International Inter-governmental Organization dedicated to regional integration in the Eastern Caribbean. The body now has eleven members states comprising Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St. Kitts and Nevis, Saint Lucia, and St. Vincent and the Grenadines, with the British Virgin Islands, Anguilla, Martinique and Guadeloupe as associate members.