Category Archives: Caribbean Development Bank

The Caribbean Region is not energy poor – CDB President

-  Member states urged to transition to new energy paradigm

By Kiana Wilburg
After establishing that high energy prices remain the primary source of the Caribbean’s uncompetitiveness, President of the Caribbean Development Bank (CDB), Dr. William Warren Smith said at the recent opening ceremony of the Board of Governors 44th meeting at the Guyana International Conference Centre, that in order to unlock the opportunities for competitiveness, it is imperative that a new energy paradigm be created.
Dr. Smith said that there has been a perception that Trinidad and Tobago is the only

CDB President, Dr. William Warren Smith, with Finance Minister, Dr. Ashni Singh.

energy-rich country in the Caribbean. But this he proved to be an inaccurate view as he highlighted that Guyana alone has enough renewable energy potential, mainly in the form of hydro-power to meet all of its electricity requirements for the foreseeable future; supply all of the needs of immediate neighbours, Grenada and Trinidad and Tobago; and still have enough left over to sell to neighbouring Brazil. The situation, he said, is similar for Suriname.
Additionally, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines have great potential to generate their entire base-load electricity requirements from geo-thermal sources.
The CDB President said that although their domestic markets are quite small, technological advancements in the development of undersea transmission cables would allow these countries to exploit their relatively large geo-thermal reserves for export to neighbouring countries.
“For example, Jamaica can meet up to 30 percent of its electricity needs from renewable sources such as wind, solar, mini-hydro and waste-to-energy.  According to a study by the World Watch Institute in the USA, Jamaica’s annual average solar insolation (a measure of solar radiation), ranges from five to eight kilowatt hours per square metre per day.  In comparison, Germany, the global leader in solar photovoltaic (PV) (materials which convert energy from sunlight into electricity), has only a few locations with a capacity in excess of 3 kilowatt hours per square metre per day.   Jamaica’s situation is not unique.  All borrowing member countries boast similarly strong solar potential.”
Dr. Smith said that all of these renewable options have the potential to lower electricity costs, and increase foreign exchange reserves from reduced energy imports.
The CDB President believes that the legislative and regulatory environment is a major hindrance to the pursuit of a new energy paradigm for the Region, and as such, the two priority areas require urgent government action.
“One, we need to change the legislative framework, at the national level, in order to facilitate access for renewables by altering the monopoly on generation where this exists in borrowing member countries.  Revisions in the framework should ensure equitable pricing for supply from independent power providers or small, distributed renewable generators of electricity.
“It is noteworthy that CARICOM energy ministers have already adopted “net-billing” as a feasible mechanism for “ensuring equitable pricing”.  As a matter of urgency then, all borrowing member countries should follow the lead set by Barbados and Jamaica, which have already enacted the supporting legislation.”
Additionally, Dr. Smith said that an appropriate regulatory framework needs to be established for each borrowing member country to ensure that equitable tariffs and rules for optimal performance are in place and to make certain that the interests of consumers, investors and governments are balanced.
“Given the constraints of market size, and the availability and cost of specialized skills necessary for the effective administration of the regulatory function, it makes sense for a collective approach to be adopted. It is for this reason that CDB welcomes the Eastern Caribbean Energy Regulatory Authority initiative, applauds those OECS countries that have already committed, and looks forward to the full participation by other member countries.
“I would go so far as to say that such a supra-national regulatory body is critical for full and sustainable development of the geothermal potential in the sub-region, to encourage private investment in the sector, and to make interconnectivity a reality. The building of a new energy paradigm must give priority to energy efficiency, which is relatively low-cost and yields a high return on investment with a short payback period.”
The CDB President also explained that a successful energy efficiency programme, incorporating appropriate tax incentives, would reduce household expenditure on electricity and other forms of energy, thereby increasing disposable incomes.  He mentioned as well that businesses, especially the critically important micro, small and medium sized-enterprises (MSMEs), would also see improvements in their efficiency and their competitiveness.
Dr. Smith expressed that the fight against high energy prices could, potentially, also open the door for the emergence and growth of new non-traditional businesses that promote the use of energy efficiency technologies and services to reduce energy consumption.
In his closing remarks on this subject, the CDB President said, “The growth of industries producing and/or installing solar water heating systems is the most familiar of the new industries that have emerged in our region as a response to high energy prices. In the new energy paradigm, we should expect an expansion in new industries around a range of energy services, and the manufacture and installation of PV and other renewable energy systems and energy-saving devices. The new paradigm is integral to the “Green Economy” approach currently under consideration by some borrowing member countries and is consistent with the CDB’s Climate Resilience Strategy.”

Developing human capital is important if Guyana is to move forward – President Ramotar tells CDB forum

At the opening ceremony of the 44th Annual Meeting of the Board of Governors which was held at the Guyana International Conference Centre (GICC) yesterday, President Donald Ramotar admitted that the development of the country’s human capital is crucial

President Donald Ramotar

to its progress.
He noted, however, that the Caribbean Development Bank (CDB) is playing a significant role in this regard. As recent as Tuesday, a state of the art nursery school was unveiled at Tuschen, East Bank Essequibo. The funding for the $98.8M school was made possible through government and the CDB.
President Ramotar said that the countries with booming economies are not necessarily those blessed with lots of natural resources but those with strong human capital. He said that this is an important point to note and that other member states, particularly Guyana, should recognize the importance of strengthening human capital in health, and other areas. This, President Ramotar said, is vital to the development of the region.
He added that the CDB is one of the most important institutions in the Caribbean.
“We need strong institutions to consolidate our resources in the Caribbean and the CDB is one such institution…The Bank has played an important part already and will continue to do so in the promotion of integration of the region. The Region is facing many challenges. While some countries have graduated from poor to middle income countries a lot of concessional financing to the region is being dried up…”
“The Caribbean states need to build on its successes and immunize itself from some of the difficulties it faces.  It would be a tragedy if we retrogress and we need some type of concessional arrangement to ensure steady progress. Many of our problems originate from outside of the Caribbean and have impacted heavily on us,” the President added.
He also stated that what has been clear over the years is that technology has impacted every aspect of life and as such it is important for the Caribbean region to develop ways in which this can be integrated into the agricultural sector among other areas.
He said, “Our food importation bill is too high and we need to continue to see food security as being extremely important. We need to broaden what we produce and harness our agricultural potential and invest in the area.”
“We must always be cognizant of the inequalities that exist in our world and see what policies can be pursued to close the income gap within our region and even internationally. Some of the figures are too startling and that tells us that if we don’t do something we are courting disaster.”
The President highlighted as well the importance for member states to continue to broaden international relations as it is also important in giving countries greater possibilities.
To the CDB members he said, “On the issue of climate change, it is imperative that we continue to fight for a solution. However, one of the big challenges that you can help to make a major contribution in is to help to identify new sources of growth.
“Additionally, and probably more significantly, one of the things the bank needs to look at is how do we deal with the big debts that many countries in the region face. Debts that are becoming a millstone around the necks of the region and helping to retard the development of the region… These are the immediate challenges that confront us .The region or the bank is not short of talent and we can find a way forward.”

Based on Guyana’s huge hydropower potential…

President Donald Ramotar, left, exchanges a handshake with President of the CDB, Dr. Warren Smith, after he delivered an address in which he (Smith) stressed Guyana’s huge potential for economic benefits through the development of hydropower (Adrian Narine photo)

CDB President advances wide ranging regional energy proposals

PRESIDENT of the Caribbean Development Bank (CDB), Dr. William Warren Smith, has acknowledged the role of renewable energy in unlocking opportunities for competitiveness and growth in the Region.

CDB President, Warren Smith, during his presentation to the opening session of the 44th annual CBD Board of Governors meeting (Adrian Narine photo)

Speaking at yesterday’s opening of the 44th annual CDB Board of Governors meeting, in the Guyana International Conference Centre (GICC), Liliendaal, Greater Georgetown, he emphasised Guyana’s huge potential for economic benefits through the development of hydropower.
“Guyana alone has enough renewable energy potential, mainly in the form of hydropower to meet all of its electricity requirements for the foreseeable future, supply all of the needs of immediate neighbours, Grenada and Trinidad and Tobago, and still have enough left over to sell to neighbouring Brazil,” Dr. Smith said.
Slated to be this nation’s most ambitious undertaking, the Amaila Falls Hydro Project (AFHP) is touted to be able to provide Guyanese with a cheaper, reliable and sustainable power supply. It involves the construction of a hydropower plant in the area of West-Central Guyana, where the Amaila and Kuribrong rivers meet.
Electricity produced there would be delivered to Georgetown and Guyana’s second largest town, Linden. The Amaila Falls Hydro Project is anticipated to result in substantial savings to the nation’s coffers, particularly in terms of foreign exchange and the purchase of heavy fuel oil.

“Guyana alone has enough renewable energy potential, mainly in the form of hydro-power to meet all of its electricity requirements for the foreseeable future; supply all of the needs of immediate neighbours – Grenada and Trinidad and Tobago; and still have enough left over to sell to neighbouring Brazil” – CDB President, Warren Smith

POTENTIAL BENEFITS
The potential benefits of a more stable and reliable source of energy through the advance of hydroelectricity was also targeted by the International Monetary Fund (IMF), last December, as an area for continued focus.
On July 18 last, the combined political Opposition defeated the Hydroelectric Power (Amendment) Bill in Parliament and, in August, the Government took the legislation back to the National Assembly and received the backing of the Alliance For Change (AFC) but A Partnership for National Unity (APNU) voted down the bill and motion.
However, the current PPP/Civic Administration has since made public its commitment to ensuring that hydropower is a realisation for Guyana.
The CDB President said the Caribbean is not energy poor, contrary to public opinion.
According to him, in addition to Guyana, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia and St. Vincent and The Grenadines have great potential to generate their entire base-load electricity requirements from geothermal sources.
He said: “Although their domestic markets are quite small, technological advances in the development of undersea transmission cables would allow these countries to exploit their relatively large geothermal reserves for export to neighbouring countries.
“Evolving renewable energy technology and recent price reductions can potentially bring about a transformation in the energy landscape to the extent that all BMCs (Borrowing Member Countries) can now harness their available resources.

“We cannot transform the Caribbean’s competitiveness landscape without a frontal attack on energy costs and the generally poor state of our electricity infrastructure” – CDB President

“…all of these renewable options have the potential to lower electricity costs and increase foreign exchange reserves from reduced energy imports.”
Smith cited the fact that it is noteworthy that CARICOM Energy Ministers have already adopted “net-billing” as a feasible mechanism for ensuring equitable pricing.
“As a matter of urgency then, all BMCs should follow the lead set by Barbados and Jamaica, which have already enacted the supporting legislation,” he pointed out.
The CDB President agreed with the nexus between competitiveness and economic growth and the role that energy plays in this mix.
“The inability to compete stands out as a major challenge for our Region,” he posited.
Smith said that pursuing the development of renewable energy has considerable potential to enhance regional energy security, save foreign exchange and improve the competitiveness of Caribbean economies.
He argued that, for economic growth to be sustainable, it must be undergirded by competitiveness, which has to be “global” in its outlook and reach.
“We cannot transform the Caribbean’s competitiveness landscape without a frontal attack on energy costs and the generally poor state of our electricity infrastructure,” the official submitted.
The CDB President stated that the building of a new energy paradigm must give priority to energy efficiency, which is relatively low cost and yields a high return on investment with a short payback period.
“The majority of our BMCs are caught in a vortex of low growth and stagnant or declining living standards. In contrast, many of the SIDS are out-performing us and the newly emerging countries of Africa, Asia, and South America are either catching us or rapidly leaving us behind. We are very good at analysis but we need to become excellent at praxis. We know what needs to be done and we just need to do it.
“…a successful energy efficiency programme, incorporating appropriate tax incentives, would reduce household expenditure on electricity and other forms of energy, thereby increasing disposable incomes. Businesses, especially the critically important micro, small and medium sized-enterprises (MSMEs), would also see improvements in their efficiency and their competitiveness.
“Our fight against high energy prices could, potentially, also open the door for the emergence and growth of new non-traditional businesses that promote the use of energy efficiency technologies and services to reduce energy consumption.”
The CDB President pointed out that in the new energy paradigm, the Caribbean Region should expect an expansion in new industries around a range of energy services and the manufacture and installation of other renewable energy systems and energy saving devices.
“The new paradigm is integral to the ‘Green Economy’ approach currently under consideration by some BMCs and is consistent with the CDB’s Climate Resilience Strategy,” he said.

THREE ACTIONS
To this end, Dr. Smith made the call for action and proposed three actions:
* The recognition that the Caribbean Region has a competitiveness problem, which is responsible for our relatively low rates of economic growth;
* The recognition that the high price of electricity and our heavy reliance on imported fuels make us vulnerable and are the primary sources of our Region’s uncompetitiveness; and
* The realisation that Caribbean nations can increase energy independence substantially; reduce the cost of energy; and create a whole new industry based on this new paradigm.
Smith said: “First, Caribbean countries have a competitiveness problem and it is at the root of our difficulty in achieving the high rates of economic growth which we need to be able to provide the standard of living to which our people aspire.
“Second, the high price of electricity is a major source of our Region’s uncompetitiveness and of our vulnerability to external shocks.
“Third, we can increase our energy independence substantially; reduce the cost of energy and, in the process, create a whole new industry based on a new paradigm.”
The CDB President questioned the impediments in moving forward with the hugely beneficial paradigm shift. “With falling prices of renewables, including solar energy technologies, what prevents us from taking advantage of the opportunity to create a Shakespearian-type sea change in the Caribbean’s energy landscape?” he asked.

PRIORITY AREAS
According to him, the legislative and regulatory environment is a major hindrance to the pursuit of a new energy paradigm for the Region. There are two priority areas for urgent Government action.
“One, we need to change the legislative framework at the national level in order to facilitate access for renewable, by altering the monopoly on generation where this exists in BMCs. Revisions in the framework should ensure equitable pricing for supply from independent power providers or small, distributed renewable generators of electricity.
“Two, an appropriate regulatory framework needs to be established for each BMC to ensure that equitable tariffs and rules for optimal performance are in place and to make certain that the interests of consumers, investors and governments are balanced. Given the constraints of market size and the availability and cost of specialised skills necessary for the effective administration of the regulatory function, it makes sense for a collective approach to be adopted.
“It is for this reason that CDB welcomes the Eastern Caribbean Energy Regulatory Authority initiative, applauds those OECS countries that have already committed and looks forward to the full participation by other member countries.”
Smith asserted that a supra-national regulatory body is critical for full and sustainable development of the geothermal potential in the sub-region, to encourage private investment in the sector and to make interconnectivity a reality.
Additionally, he addressed the role of the CDB in advancing efforts relative to the competitiveness challenge and to make the transition to the new energy paradigm.
Dr. Smith said: “Promoting poverty reduction through inclusive and environmentally sustainable growth and building resilience to external shocks and natural hazard events underpin all of CDB’s development financing and technical assistance to its BMCs.
“Within that broad framework, the Bank has been intensifying its focus on renewable energy and energy efficiency.
“Our flagship programme, the Basic Needs Trust Fund (BNTF), has been a useful mechanism for encouraging the use of renewable energy at the community level. Through the BNTF, therefore, CDB has been creatively using renewable energy solutions to improve the quality of life of the poor.”
He highlighted, as well, the Renewable Energy/Energy Efficiency Unit that was created, among other things, to prepare a new Energy Sector Policy and Strategy for CDB; develop new financing instruments and champion the Bank’s interventions in the area.
This Unit will benefit from specialist expertise provided by the Government of Germany.
CDB, he said, has also financed electricity generation, transmission and distribution facilities in its BMCs virtually since the Bank’s inception and is expected to continue to do so, including through collaborations with development partners.
“It is estimated that as much as US$10B investment in new generation capacity could be required within the medium term if the Region’s electric utilities are to benefit from efficiencies associated with the new technologies and for them to maintain adequate reliability. To radically transform the energy generation landscape, the investment requirements could exceed US$20B,”the CDB President indicated.
Dr. Smith concluded that the energy challenge is not a new one and what is clearer today is that the Caribbean Region must not “continue as helpless victims of the vagaries” of the international oil markets; rather the Region must address its lack of competitiveness because electricity prices are like an albatross around our necks in a tangible way.

(By Vanessa Narine)

 

 

 

CDB hosting three-day stakeholder forum

… to create better working strategies for Caribbean Technological Consultancy Services

REPRESENTATIVES from almost every Borrowing Member Country of the Caribbean Development Bank (CDB) will be participating in a stakeholders’ forum to come up with better working strategies, over the next three days. The event started yesterday at the Ramada Princess Hotel, East Bank Demerara. In an overview of what the event will entail, Kenneth Harvey, CTCS Network Coordinator, said over the years the role of the CDB and the CTCS has changed, hence the need for new strategies. Harvey pointed out that in the past CTCS was able to cater to the needs of a few countries.
However, with the CTCS now having a total of 19 countries, there arises the need for new strategies to better cater for the needs of individual countries.

Caribbean Technological Consultancy Services Network Coordinator, Kenneth Harvey, addressing the participants at the stakeholders’ forum.

“We always do our best if it means resource persons, training and other support. That worked well when we were servicing a few countries, but we now have 19 borrowing members, our latest being Suriname, we needed more staffing, the bank is evolving and has encouraged us to deal with other issues, core to  the Bank’s agenda.”
Harvey said it is to this end that CTCS was forced to come up with a different approach, and that is to deal with the member countries in a strategic way.
“At the beginning of each year, the lead Cooperating Institution in each country will assemble its people and identify some core activities that they can do under the CTCS programme in that given year or in a few years that will really impact on MSME in their respective countries.”
This Harvey said, will shorten planning time, and hasten implementation time for projects.
“So when we sit and prepare a country paper up to the tune of US$150,000, we can address all the issues in one go, that way once the document has been approved we can implement.”
Harvey, however, urged participants to be cognisant of the fact that the CDB does its work thoroughly, and carefully scrutinises each project that is presented to it.
“So we are saying let’s go with that approach, in going towards that we see this is a golden opportunity to engage the local cooperating institution to be more involved in identifying and developing the activities in tune with what is the strategic focus of the government of the day for MSME development.”
More importantly, Harvey said is to incorporate into their plans what Governments want the MSME to contribute to their national economy.
“You, the locals, will be called upon to be part and parcel of the preparation process, you will be required to identify what areas in the MSME sector requires urgent and significant attention and what would make tangible contribution to the development of the country.”
The CTCS Network is operated by the Private Sector Development Division of the CDB, in cooperation with Regional and National Institutions, laboratories, industrial enterprises and private consultants.
The CTCS Network also helps to solve planning and production problems quickly by providing Caribbean expertise at an affordable cost.
The CTCS Network has been assisting users in funding solutions to practical problems encountered in production enterprises, as well as in the hotel Industry.
Assistance is also provided for project implementation, training, computerization and in the development of business, technical and marketing plans.
Countries, which are a part of the CTCS Network, include Anguilla, Antigua and Barbuda, The Bahamas, Barbados, Belize, British Virgin Islands, Dominica, Cayman Islands, Grenada, Guyana, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago, Turks and Caicos Island.

(GINA)

Guyana on track to host 44th Annual CDB Board of Governors meeting

Finance Minister Dr. Ashni Singh

– event to bring together Region’s economic leadership to deliberate on challenges
ON May 28 and 29, Guyana will host the Annual Board of Governors’ meeting of the Region’s premiere development institution and leadership in economic and financial system, the Caribbean Development Bank (CDB).  Minister of Finance and Chairman of the Board of Governors, Dr. Ashni Singh, while speaking on the National Communications Network (NCN) on the issue of Guyana’s preparedness with regard to its hosting of the bank’s 44th Annual Board of Governors’ meeting, said the country is on track to host the event. He said planning and preparation for the meeting which started some time ago, have intensified over the recent days and weeks.
“It is an extremely important event in the annual calendar of events for the Caribbean, and Guyana considers itself privileged to host this meeting,” Minister Singh said.
He said the meeting is happening at an important time for the Region and the institution, that itself has an important mandate.
Dr Singh pointed out that the Region is facing extremely severe economic challenges that require hard decisions, firm resolve and strong will to confront and overcome them. He noted that since its establishment, the CDB has grown in strength and size and has discharged in a most admirable fashion its mandate of supporting economic and social challenges across the Caribbean.

Dr Singh said the meeting will serve to focus on the institution with regard to the role it can play in consolidating support for the Region.
Minister Singh explained that the meeting, which will comprise several components, in addition to being a meeting of the shareholders of the CDB for the annual reports, performance over the past year, audited financial statement and so forth, importantly brings together the economic leadership of the Region to reflect and deliberate on the challenges of the Region and to chart a course forward for confronting those challenges.
The Guyanese Finance Minister noted that more significantly, the economic leadership together will seek to define or help to influence the role that the CDB will play in helping the Region and the individual member states to confront those challenges.
There will also be a number of special forums organised around the meeting that coincide with the gathering of the Regional leaders and which will address a number of pressing issues confronting the Region, including climate change, financial sector issues, debt and indebtedness and fiscal sustainability, Minister Singh noted.
Further, there will be activities aimed at broadening awareness and participation of economic issues confronting the Region, which will be specifically aimed at involving youth. But even more, is the opportunity presented for bilateral engagements among the economic leaders in the Region, and as well, the opportunity for Guyana to be showcased to the rest of the world, whether by way of social events or tourism activities, Minister Singh pointed out.
During the meeting, Guyana will take centre stage with regard to the issue of agriculture and climate change. Guyana has been on the forefront of the global advocacy effort on the issue of climate, and in particular on the peculiar threat faced by the small states of the Caribbean and the role of forest in contributing to the global fight against climate change.
Guyana is the only net exporter of food in the Caribbean and continues to see itself as potentially the food basket of the Region.
Agriculture is not only viewed as an important opportunity for growth and investment in Guyana, but very importantly as an important strategy for addressing some of the macro-economic challenges faced by the Region.
Meanwhile, Minister Singh also recognised CDB’s support to Guyana and the institution’s optimism about the country’s outlook. Earlier this year, the institution’s president, William Warren Smith made several pronouncements about the country, including the fact that Guyana, along with Haiti and Suriname, are expected to lead the Region’s growth in 2014. He also praised the vibrancy of the Guyanese economy, which Minister Singh noted.
“We have been shareholders of the bank from its inception, and the bank has seen Guyana through some of our most difficult years, through the 70s and 80s when the Guyanese economy was literally on its knees. Since we have embarked on the important economic reform of the 90s and over the past decade, the bank has not been reluctant to recognise the boldness of the decision that we have taken, the appropriateness of some of the policy decisions that we have adopted, and the favourable results that have flowed, therefore… the bank has been very clear that in recent years, the Guyanese economy has been a strong performer, has contributed significantly to Regional economic well-being, and that Guyana has an even greater role to play going forward, whether it is contributing to agriculture production, or whether as an investment in regional business..
“The bank has been proactive in playing its part, in positioning and situating itself to be a part of this bright future that it believes Guyana has, and so the bank has been investing in partnering with us with both large-scale and small scale infrastructure projects,” he said.
CDB funding in Guyana has been used for financing social and economic infrastructure, such as schools, road and water projects, building more disaster-resistant structures, community skills training and support for small and medium-sized enterprises.
Guyana has benefitted from the special development fund as well from loans totalling almost US$28M to strengthen sea and river defence systems.

(GINA)