US$2 million will also facilitate sale of carbon credits by hotels that invest in efficient equipment
The Inter-American Development Bank (IDB) approved the Caribbean Hotel Renewable Energy and Energy Efficiency Action – Advanced Program (CHENACT-AP), a US$2 million grant to help the tourism sector in Barbados, Jamaica, The Bahamas, Suriname, Trinidad and Tobago, Belize, Haiti, Dominican Republic and Guyana to become more energy efficient.
The four-year project will finance energy audits for hotels in participating countries that want to cut their operational costs through greater energy efficiency. Efficiency measures in areas such as lighting, water use and air conditioning provide great opportunities for savings, particularly for small and medium-sized hotels. IDB studies have estimated that many of these hotels have the potential to reduce water consumption by 50 percent and overall energy consumption by 30 percent to 50 percent, when implementing an integral set of efficiency measures and microgeneration with renewable energies.
But in order to make sound choices regarding efficiency improvements or obtain credit for such investments from donors or banks, hotels need to obtain detailed audits of their energy use. By providing grants for such audits, the IDB program intends to jump-start efficiency investments in the hotel sector.
The program will also finance an innovative scheme to enable individual hotels to generate revenue from the sale of carbon credits in the international carbon market. Christiaan Gischler, project team leader at the IDB, explained that the transaction costs involved in selling carbon credits can make it prohibitive for an individual hotel or company to participate in the carbon markets.
To overcome that barrier, the IDB will work with participating countries to bundle carbon emission reductions generated from energy efficiency or renewable energy application in the Caribbean hotel sector as a consequence of the CHENACT-AP. It will help them to certify those emission using United Nations carbon finance instruments.
“In this way, multiple hotels will be able to access carbon markets at once, reducing the transaction costs of this process,” said Gischler. “This will make it easier for participating hotels to sell carbon credits to offset the costs of their efficiency investments, while promoting green tourism and helping to market the Caribbean as one of the main ‘low carbon tourism’ destinations.”
Furthermore, the project will help hotels access existing funds and identify opportunities for new financial schemes to strengthen local governments and promote energy efficiency on a regional level.
Counterpart funds provided by the governments of Barbados, Jamaica and The Bahamas as well as a number of regional and international organizations will bring the project grant up to a total of US$5,145,000 million. The grant will be paid out over a period of four years.
CHENACT-AP was launched on Thursday, October 13th at the 2011 Caribbean Renewable Energy Forum (CREF), the biggest and most influential gathering of renewable energy stakeholders in the Caribbean. Representatives of the Governments of Barbados, Jamaica and the Bahamas will be present during the signature of the agreement between IDB and the Caribbean Tourism Organization (CTO), executing agency of the Program with operational support from the Caribbean Hotel & Tourism Association (CHTA) and the Caribbean Alliance for Sustainable Tourism (CAST).
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