Luis Alberto Moreno, president of the Inter-American Development Bank, says US$300 million will be available for green projects. - File

Linda Hutchinson-Jafar, Business Writer

WASHINGTON, United States:

Caribbean countries, net oil importers with a growing annual bill, need a 'bold energy strategy', an IDB official said here Tuesday, championing investments in renewables.

Luis Moreno, president of the Inter-American Development Bank (IDB), said with the exception of energy producer, Trinidad and Tobago, all other Caribbean countries were hurting by the escalating costs in importing oil.

He noted that the cost of imported oil in Jamaica grew by 41 per cent in 2005, by 30 per cent in 2006 and is projected to pass US$2 billion this year, almost in line with the country's merchandise exports which grew by 27 per cent to US$2.12 billion in calendar 2006, according to central bank data.

Burden on state

"This cost places a crippling burden on the state and cuts into the budgets of essential social services," Moreno said.

The IDB has an active programme that grants technical assistance for feasibility studies on ethanol, bio-diesel, wind, solar and geo-thermal energy.

The multilateral's private sector department is also preparing to launch a green energy programme that will provide at least US$300 million in loans for projects in energy efficiency and renewables, as well as a programme that is specifically designed to favour small countries.

"We certainly hope the Caribbean will be the first to take advantage of it," the IDB official said.

Projects under way

But some of what was proposed Tuesday - biofuels and wind - are projects already on the ground in Jamaica, for example, whose Wigton Windfarm is now looking to more than double its current 20.7 MW capacity while the ethanol-based gasolene project has ended its pilot phase and will move to E10 fuel at the pumps this year.

Moreno said the Caribbean has significant potential in biofuels and wind power, adding that the IDB itself was also just beginning to realise the savings to be had from serious conservation measures.

"Now more than ever, the Caribbean needs a bold energy strategy that combines energy conservation and efficiency with investments in renewable resources," he said Tuesday at the three-day 'Conference on the Caribbean: Vision 2020'.

Earlier this year, the IDB teamed up with CARICOM to finance a study on expanding biofuel opportunities in Jamaica, Guyana and Barbados which showed that with the right reforms and investments, each of these countries could substitute at least 10 per cent of their current gasolene consumption with domestic ethanol fuel.

"If they adopt the latest technology, these three countries could co-generate a total of 100 megawatts of electricity by burning sugar cane bagasse," said the IDB president.

Without naming Venezuela, Karen Harbert, the United States assistant secretary for policy and international affairs in the Department of Energy, said the U.S. was concerned that some countries in the hemisphere were closing their doors to foreign investments in energy by having hostile laws while increasing the involvement of national companies in the important energy sector.

Hostile relations

The U.S. and Venezuela's relations are growing increasingly hostile. The South American country has been supplanted as the No. 5 provider of oil to the U.S., having drawn back in its dealings with the Americans to supply larger quantities of fuel to the region, including CARICOM under the PetroCaribe accord.

Harbert on Tuesday urged energy diversification away from oil, selling it as an energy security issue for the Caribbean.

"Energy security ultimately depends on the choices that governments and countries make, and we're very concerned that some countries in our hemisphere are making choices that will not optimise the development of energy resources."

Meantime, she also underscored a point made by U.S. Commerce Secretary Carlos Gutierrez, who urged the region to create a more welcoming climate for investors.

"Companies and sources of financing want to do business where they see hospitable investment regimes and possible projects," said Harbert. "They will not go where there is no rule of law, a level playing-field or clear investment laws."

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