Barbados to improve energy security and diversify the energy mix with a US$34 million IDB loan

Project to aid Barbados in transitioning to a cleaner energy future, meeting its current natural gas demands, and contributing to the creation of a regional Liquefied Natural Gas (LNG) supply chain

This US$34 million Inter-American Development Bank (IDB) loan will enhance Barbados’ energy security and sustainability by diversifying its energy mix through promoting the use of cleaner fuels for power generation, increasing the use of renewable energy sources, and increasing energy efficient applications by Barbados’ Government and private sector.

The Barbadian Government’s priorities in the electricity sector include reducing electricity prices, increasing energy security, using cleaner fuels, and reducing negative environmental impacts. Barbados aims to have renewable energy contribute 65 percent of total peak electrical demand by 2030 and to achieve a 22 percent reduction in electricity consumption by 2029. Barbados intends to achieve a 30 percent economy-wide reduction in Greenhouse Gas emissions by 2030 compared with 2008.

The project will finance improvements to Barbados’ existing natural gas infrastructure to ensure natural gas service continuity. The loan will increase energy efficiency and renewable energy applications within the National Petroleum Corporation’s (NPC) and Barbados National Oil Company Limited’s (BNOCL) operations to reduce Greenhouse Gas emissions. It will also enable the implementation of a Public-Private Partnership project to import and supply LNG for power generation as well as to provide technical support to NPC/BNOCL to foster greater operational efficiency.

Juan Carlos de la Hoz, IDB’s Representative in Barbados stated: “This is the first IDB loan promoting LNG in the Caribbean which will not only substantially improve the natural gas network and expand the Micro LNG plant for industrial and commercial use in Barbados.” “The loan also promotes the use of renewable energy, by providing more than 1 megawatts (MW) with a combination of wind and solar power, contributing to increase Barbados’ installed renewable energy capacity for power generation from zero in 2009 to 19 MW in 2016; this represents more than 12 percent penetration of renewable energy in the country’s energy mix,” de la Hoz added.

The loan is for a 24-year term and will be financed by the IDB’s Ordinary Capital resources with a 6.5 year grace period and a LIBOR-based interest rate.