Dominica’s Geothermal Energy Project Moves Closer to a Reality

BRIDGETOWN, Barbados – The Barbados-based Caribbean Development Bank (CDB) says it has reached financial close on a facility for the landmark Dominica geothermal energy project.

Dominica geothermal plant projectIt said that the facility is made available to the Geothermal Power Company of Dominica (GPC) that was established specifically to implement the 10 megawatt project. GPC is a wholly owned subsidiary of Ormat Technologies Inc, a leading international geothermal developer.

The CDB said that this transaction is the first geothermal project in the region to reach this stage with a private sector partner.

“This is a pivotal transaction for the Bank, for the Commonwealth of Dominica, and for the region. It showcases the potential of blended concessional finance to mobilize private sector expertise and deliver transformative clean energy solutions in small island developing states,” said Isaac Solomon, CDB Vice President of Operations.

The power plant development phase is being implemented as a private sector-led initiative, with CDB acting as the lead financial arranger.

The project has secured US$34.8 million in concessional funding. Of this amount, U$ 25.4 million is provided by the Green Climate Fund (GCF) in the form of a concessional loan, which was mobilized through the Inter-American Development Bank (IDB)-GCF programme titled “FP020: Sustainable Energy Facility for the Eastern Caribbean.”

An additional US$9.4 million is being provided from Canada’s Supporting Resilient Green Energy Initiative in the Caribbean (SuRGE) programme. The CARICOM Development Fund (CDF) is also contributing US$15 million in loan financing out of its own capital fund resources, as the major element of the CDF’s Country Assistance Programme for Dominica.

CDF chief executive officer, Rodinald Soomer, spoke of the strategic regional importance of the project.

“It leverages Dominica’s natural resource endowments to create a sustainable productive asset that helps the country address the inherent disadvantages it faces as one of the Least Developed Countries in CARICOM, in producing goods and services for regional and global markets at internationally competitive prices,”  he said.

Dominica’s Energy Minister,  Dr. Vince Henderson, said that the development of this truly green, resilient and renewable energy infrastructure in Dominica is a massive step forward for the island and the wider region.

“We are pleased to see our regional financing partners take a lead role in providing concessional financing for this initial 10 MW geothermal power plant.”

IDB’s general manager for the Caribbean, Anton Edmunds, in congratulating the other financial stakeholders said “this milestone represents a ‘before and after’ moment in Dominica’s energy transformation and underscores the steadfast commitment of our institutions to advancing sustainable development.

“As the implementing entity of the GCF, we at the IDB are proud to have played a key role in securing the financing for the first geothermal power plant to operate under a public-private partnership in the English-speaking Caribbean.

“When the plant starts to operate, the very next day, up to 70% the energy matrix of the country will be powered by geothermal energy, liberating important resources that were used to import fossil fuels for power generation Edmunds said.

The director of the Green Climate Fund’s Department of the Latin America and the Caribbean region, Kristin Lang, said “we are pleased to see the growing momentum of this landmark geothermal energy project, which is turning ambitions and partnerships into clean energy solutions for small island developing states in the Caribbean.”

She said by deploying catalytic capital to unlock clean energy access, this initiative demonstrates how innovative financing, including the private sector, can transform the energy sector in the region”.

Canada’s High Commissioner to Barbados and the Eastern Caribbean, Brenda Wills, emphasized support for the initiative, saying “Canada is pleased to partner with the Caribbean Development Bank in enhancing access to clean energy in Dominica and supporting the country’s ambition of becoming more climate resilient and energy secure.

“This project is an important part of Canada’s Supporting Resilient Green Energy Initiative in the Caribbean (SuRGE) programme, which aims to accelerate the region’s transition towards sustainable energy.”

The Dominica geothermal plant is seen as a transformative initiative, setting the stage for the full development of the country’s extensive geothermal resource, estimated at up to 1000 MW. Construction of the facility in the Roseau Valley is underway and, once operational, it will deliver firm renewable energy to the national grid, replace diesel-based generation, and lower electricity production costs.

The CDB said the project is expected to enhance energy security, stabilize tariffs, cut greenhouse gas emissions, and drive long-term economic growth.

It said it also supports Dominica’s climate resilience and development goals while creating opportunities to engage in the global market for green energy products such as green electricity, green hydrogen, and green ammonia.

The initiative reflects CDB’s commitment to advancing a clean, resilient, and inclusive energy future for the region, the region’s premier financial institution added.