“Twenty million dollars is a very small sum to fund clean energy investments in the Caribbean in any serious way. The enormous cost of building the infrastructure to transition from fossil fuels requires Caribbean governments to have access to concessionary financing from international financial institutions (IFIs).
The U.S. government has undertaken to support change in the criteria for concessional financing so as to allow qualification for Caribbean countries that up to now are ‘graduated’ because (apart from Haiti) they are not low-income countries. The change, if it occurs, will not do so with the required immediacy.
The majority of Caribbean countries also now confront high debt. With oil prices now substantially lower than they have been for decades, there is little incentive to incur the huge capital cost of moving to clean energy sources.
What appears to be driving this belated U.S. interest in the Caribbean’s energy sector are two things: a desire to neutralize the reliance of many Caribbean countries on Venezuela, which supplies petroleum and petroleum products under a payment scheme that incorporates long term loans at low interest rates, and the wish to sell U.S. natural gas and clean energy technology to the region.
The latter will not be achieved unless the United States provides direct funding on a concessionary basis and inducements to its private sector to invest. On the matter of Venezuela, Caribbean governments that now benefit from the advantageous payment scheme will not turn away from it while it continues.
If any U.S. government is seriously concerned with improving conditions in the Caribbean to achieve higher levels of prosperity that discourage refugees and illegal migration as well as reduce crime and promote greater political stability, it needs to develop a comprehensive plan for the area. It would best do so by consulting with regional governments on such a plan.
The writer is an International Affairs Consultant and Senior Fellow at the Institute of Commonwealth Studies at London University.
for more information about the writer visit: www.sirronaldsanders.com