Government has secured a $68 million loan from the Inter-American Development Bank (IDB) to facilitate, among other things, the implementation of a public-private partnership project to import and supply Liquified Natural Gas (LNG) for power generation.
In making the announcement, the IDB representative in Barbados Juan Carlos de la Hoz said the loan would also provide technical support to the state-run National Petroleum Corporation and Barbados National Oil Company Limited to foster greater operational efficiency.
“This is the first IDB loan promoting LNG in the Caribbean which will not only substantially improve the natural gas network [but] expand the Micro LNG plant for industrial and commercial use in Barbados,” the IDB spokesman said.
He also pointed out that the loan would be used to promote renewable energy, while pointing out that Barbados’ installed renewable energy capacity for power generation moved from zero in 2009 to 19 megawatts in 2016.
“This represents more than 12 per cent penetration of renewable energy in the country’s energy mix,” de la Hoz added.
The loan is for a 24-year term and will be financed by the IDB’s Ordinary Capital resources with a 6.5 year grace period and a LIBOR-based interest rate.
In a release on Thursday, the Bank said it would generally “enhance Barbados’ energy security and sustainability by diversifying its energy mix through promoting the use of cleaner fuels for power generation, increasing the use of renewable energy sources, and increasing energy efficient applications by Barbados’ Government and private sector”.
It noted that Government’s priorities in the electricity sector include reducing electricity prices, increasing energy security, using cleaner fuels, and reducing negative environmental impacts.
Barbados is presently aiming to have renewable energy contribute 65 per cent of total peak electrical demand by 2030, as well as to achieve a 22 per cent reduction in electricity consumption by 2029, it added.
Government has also signalled its intention to achieve a 30 per cent economy-wide reduction in greenhouse gas emissions by 2030, compared with 2008.
The IDB loan will therefore finance improvements to the existing natural gas infrastructure to ensure natural gas service continuity.