The Inter-American Development Bank (IDB) has deployed $80 million in financing to advance The Bahamas’ renewable energy penetration on the islands affected by Hurricane Dorian, a press statement from the bank said yesterday, which also revealed that the initial funding is part of a larger $170 million conditional credit line for investment project (CCLIP) for the overall deployment of renewable energy in The Bahamas.
“This first ($80 million) operation will support the government of The Bahamas with the rehabilitation of critical energy infrastructure and restoration of electricity service in the islands affected by Hurricane Dorian, while facilitating the introduction of renewable energy,” the statement noted.
The statement also explained that the government has a 25-year period in which to pay off the $80 million, with a 5.5-year grace period. The interest rates are based on the London inter-bank offered rate.
“This operation is structured as a multiple-works investment loan, which entails the financing of several independent, but technically similar sub-projects towards the program’s objective,” the statement noted.
According to the IDB, the loan will help to rehabilitate energy infrastructure on Hurricane Dorian-affected islands, while introducing renewable energy micro-grids to shore up existing power infrastructure through the “deployment of decentralized solar PV plants, rooftop systems and innovative microgrids with storage capacity and grid modernization technologies”.
The loan will also help to modernize the institutional framework of the energy sector of The Bahamas by strengthening its legal and regulatory environment.
“The IDB project will finance the restoration of energy services and the rehabilitation of critical energy infrastructure in areas impacted by the hurricane. It will implement flexible and resilient microgrids in the affected islands,” the IDB statement noted.
“The Bahamas has a historic opportunity to transform its energy sector in the aftermath of Hurricane Dorian, addressing structural challenges that have made electricity costly and unreliable, constraining economic growth and dampening the quality of life for its population.
“The reconstruction and modernization of the archipelago’s energy system represents an opportunity to strengthen isolated and interconnected grid networks with resilient renewable energy (RE) resources, coupled with conventional power systems designed to withstand the increasing frequency and severity of extreme weather events. It also presents an opportunity to raise awareness of RE as a new energy sub-sector and the employment and economic opportunities this presents for Bahamian citizens.”
The IDB’s team leader for this project Malaika Masson said bolstering the power infrastructure for the island is a priority for the government and the IDB.
“I am glad we were able to mobilize needed resources promptly to prioritize access to electricity in these locations,” Masson said.