Caribbean Countries Unite for Major Renewable Energy Overhaul Backed by World Bank

“Across the Caribbean, residents are paying some of the highest electricity prices in the world, which places a strain on households and businesses,” noted Lilia Burunciuc, World Bank Division Director for the Caribbean.

In a landmark move to overhaul its energy landscape, the World Bank’s Board of Executive Directors has approved a transformative $110 million investment initiative titled the Caribbean Resilient Renewable Energy Infrastructure Investment Facility. Designed in collaboration with the Eastern Caribbean Central Bank and governments in the region, the initiative aims to significantly accelerate the transition to clean, resilient, and affordable energy systems in Grenada, Saint Lucia, and Saint Vincent and the Grenadines. The program also offers an open invitation for other Eastern Caribbean countries to join in the future.

Tackling the Caribbean's Longstanding Energy Challenge

The Caribbean has long struggled with an overreliance on imported fossil fuels—an issue that has made its energy sector not only expensive but also highly vulnerable. Over 90 percent of electricity in the region is generated using imported fossil fuels, resulting in some of the highest electricity tariffs globally. Between 2016 and 2021, Eastern Caribbean nations collectively spent an average of $444 million annually on fossil fuel imports, accounting for 15.4 percent of total imports and 17.1 percent of the trade balance.

This dependency has created a significant fiscal burden for small island economies and left them exposed to volatile global oil prices. Additionally, despite increasing awareness and concern over climate change, progress in shifting toward renewable energy has been limited. As of 2022, renewable sources made up only 11.6 percent of electricity generation in the region.

Regional Strategy with Local Impact

To confront these persistent barriers, the newly approved Facility adopts a regional approach to energy transformation. The strategy involves aggregating renewable energy projects across participating countries, thereby lowering project costs, increasing scalability, and making the sector more attractive to private investors.

“Across the Caribbean, residents are paying some of the highest electricity prices in the world, which places a strain on households and businesses,” noted Lilia Burunciuc, World Bank Division Director for the Caribbean. “Through this project, we want to help lower costs and improve the reliability of electricity by investing in renewable energy and resilient infrastructure.”

At the national level, the initiative will focus on modernizing electricity transmission and distribution infrastructure. This includes installing advanced battery energy storage systems to better integrate variable renewable sources like solar and wind while improving grid stability and resilience. These upgrades will help build a more robust and flexible energy network capable of withstanding climate shocks and disasters.

Mobilizing Private Investment and Reducing Risk

To overcome one of the most critical hurdles—access to finance—the Facility will leverage commercial credit of up to $120 million. By providing partial credit guarantees, the program aims to de-risk renewable energy investments and unlock much-needed private sector capital. This blended financing model creates a more secure investment environment for developers and financial institutions alike.

The initiative will also deliver comprehensive technical support, capacity building, and regulatory assistance to stakeholders across the region. This includes streamlining project preparation, ensuring compliance with evolving regulatory frameworks, and mitigating investment risks.

A key innovation of the Facility is its collaboration with the Caribbean Catastrophe Risk Insurance Facility (CCRIF) to develop a specialized insurance product that protects renewable energy infrastructure from catastrophic events such as hurricanes. This initiative is vital for island nations increasingly impacted by extreme weather driven by climate change.

Investing in Human Capital and the Future of the Energy Workforce

Beyond infrastructure and finance, the Facility prioritizes human capital development. It will support scholarship programs and apprenticeships to train the next generation of energy professionals. These efforts aim to cultivate a skilled workforce capable of managing, operating, and expanding renewable energy systems throughout the region.

The project is expected to generate both short-term construction and installation jobs and long-term employment in system operation and maintenance—stimulating economic activity while supporting a greener future.

“We cannot transform our region without a transition to renewable energy,” said Timothy Antoine, Governor of the Eastern Caribbean Central Bank. “This Facility is an important vehicle for our journey to build institutional and generating capacity, enhance energy security, boost competitiveness, and lower electricity prices for our families and businesses.”

A Broad Coalition of Support

The $110 million investment is primarily funded through the World Bank’s International Development Association (IDA), which provides grants and low-interest loans to low-income countries and small island economies. Additional funding and support are provided by the Climate Investment Fund (CIF), the Energy Sector Management Assistance Program (ESMAP), and the Canada Clean Energy and Forests Climate Facility.

This multi-stakeholder effort underscores the global community’s commitment to supporting vulnerable regions in achieving energy security, climate resilience, and economic sustainability.

Looking Ahead

With energy prices rising and climate risks intensifying, the launch of the Caribbean Resilient Renewable Energy Infrastructure Investment Facility marks a significant step forward for the Eastern Caribbean. As the region begins this transition, the Facility offers a comprehensive blueprint for sustainable energy development—one that not only addresses immediate economic concerns but also lays the foundation for a more resilient, self-sufficient, and prosperous future.

As more countries consider joining the initiative, the Caribbean is poised to become a global example of small island innovation in clean energy transition.