Jamaica to improve energy efficiency in government facilities, and to promote fuel conservation with better urban traffic management

The Inter-American Development (IDB) and the Japan International Cooperation Agency (JICA) will fund a $30 million project to promote electricity conservation in Jamaica by reducing electricity consumption, improving traffic flows in congested road corridors in the Kingston Metropolitan area, and enhancing the capacity of Jamaica’s Ministry of Energy to improve electricity sector planning.

Jamaica’s dependence on petroleum imports and the inefficient use of energy resources seriously impacts government expenditure and debt, which is currently estimated at around 124 percent of GDP.

The absence of a complete Urban Traffic Management System (UTMS) to synchronize 161 traffic lights is a key factor causing congestion in the Kingston Metropolitan Region, contributing to inefficient urban mobility and unnecessary fuel consumption. A better use of energy resources would free public funds through lower government bills and reduced oil imports, helping Jamaica further reduce debt.

This Energy Management and Efficiency Programme promotes energy efficiency and conservation as one approach to bring down Jamaica’s fuel bill. It mitigates against volatile oil prices, and contributes to Green House Gas emissions reduction.

The project targets the demand side of electricity generation and road transport sectors, which consume over 45% of the country’s energy. The primary focus of the programme is on replacing outdated equipment and inefficient systems consuming electricity in 73 health, education, and public agency government facilities, while demonstrating the attractive economic and environmental return of energy-efficient retrofits and investments.

The project will also finance the purchase and installation of equipment to complete the Urban Traffic Management System in the Kingston Metropolitan Region, taking advantage of the integrated use of information systems and telecommunications technology to better monitor and manage Kingston’s traffic.

Finally, the project also addresses the issue of capacity building to strengthen public institutions critical to the promotion of energy efficiency in Jamaica. For these investments to be sustained or scaled-up, targeted investments are needed in project management, electricity planning and supervision on a wide range of energy efficiency projects.

The project is a Specific Investment Operation in which $15 million will be financed by the IDB’s Ordinary Capital resources, while parallel financing totalling $15 million will be provided by the Japan International Cooperation Agency (JICA) through the Co-financing for Renewable Energy and Energy Efficiency (CORE) mechanism.

The IDB loan is for a 24-year term, with a 6.5-year grace period and a LIBOR-based interest rate.

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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.