The Inter-American Development Bank (IDB) approved a US$ 170 million Conditional Credit Line for Investment Project (CCLIP) to advance deployment of renewable energy in The Bahamas along with the first operation of the CCLIP in the amount of US$ 80 million.
This first operation will support the Government of the Bahamas with rehabilitation of critical energy infrastructure and restoration of electricity service in the islands affected by hurricane Dorian, while facilitating the introduction of renewable energy.
On September 1st, 2019 The Bahamas was hit by Dorian, a category five hurricane and one of the strongest ever seen before in the country, leaving a trail of destruction to houses, essential infrastructure and entire ecosystems. Hurricane Dorian has impacted approximately 18% of the population mostly in the islands of Grand Bahamas and Abaco and caused an estimated $3.4 billion in damages.
The Bahamas has a historic opportunity to transform its energy sector in the aftermath of Hurricane Dorian, addressing structural challenges that have made electricity costly and unreliable, constraining economic growth and dampening the quality of life for its population.
The reconstruction and modernization of the archipelago’s energy system represents an opportunity to strengthen isolated and interconnected grid networks with resilient Renewable Energy (RE) resources coupled with conventional power systems designed to withstand the increasing frequency and severity of extreme weather events. It also presents an opportunity to raise awareness of RE as new energy subsector and the employment and economic opportunities this presents for Bahamian citizens
The IDB project will finance the restoration of energy services and the rehabilitation of critical energy infrastructure in areas impacted by the hurricane. It will implement flexible and resilient microgrids in the affected islands. According to the IDB Project Team Leader, Malaika Masson, “the restoration of power in these islands is a priority to the Government of the Bahamas and to the IDB. I am glad we were able to mobilize needed resources promptly to prioritize access to electricity in these locations”.
The IDB project includes the deployment of decentralized solar PV plants, rooftop systems, and innovative microgrids with storage capacity and grid modernization technologies to improve the reliability and resiliency of the power network.
Another important feature of the IDB project is modernization of the institutional framework of the energy sector in the Bahamas. The project envisages supporting the Government of the Bahamas to strengthen its legal and regulatory environment to foster deployment of renewable energy and enable broader participation of the Bahamian society in the sector.
The first operation of CCLIP in the amount of US$ 80 million has a 25 years amortization period, 5.5 years period grace and a Libor-based interest rate. This operation is structured as a multiple-works investment loan, which entails the financing of several independent, but technically similar subprojects towards the program’s objective.
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.