Regional Energy Consumers to Benefit most from New CARICOM Development Fund (CDF) led Credit Risk Initiative

Mr. Wayne Vitalis, Financial Controller, CDF looks on whilst Ms. Paula James of the St. Lucia Manufacturers Association makes a point at the recent validation workshop held in Suriname.

 

Energy consumers across the Caribbean Community (CARICOM) are expected to be the main beneficiaries of an ongoing initiative that seeks to facilitate ease of access to credit for households and small and medium sized enterprises (SMEs) within the region’s energy sector.

The Credit Risk Abatement Facility (CRAF) is currently being established by the CARICOM Development Fund (CDF), in collaboration with the CARICOM Secretariat, the Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ), and other key implementing and strategic partners.

Following the conclusion of a recent Stakeholder Validation Workshop held in Paramaribo, Suriname, (25–26 July 2018) on the main design elements of the CRAF, Mr. Glynn Morris, GIZ Programme Manager of the Renewable Energy and Energy Efficiency Technical Assistance (REETA) Programme, highlighted the benefits of the CRAF to various groups of stakeholders.

“Anyone who requires energy services that are more reliable, sustainable and available where they may not already be so, will be the main beneficiaries.

This will be a business opportunity for financial institutions to access a new market; those small energy businesses, who in-turn will provide energy services to customers.”

Morris’s comments echoed the view of the CRAF’s strategic and implementing partners, that the facility is an important emerging modality in the promotion of sustainable energy financing within CARICOM.

The Stakeholder Validation Workshop, marked the conclusion of Phase 1 of the project which commenced in February of this year and which was funded by the European Union (EU) under the REETA programme.

With regional partners having identified common ground on the main design elements of the CRAF, the focus has now shifted to Phase 2, which will see the preparation of the detailed design, a fundraising mechanism, and the inception work required for launching and operationalizing the facility.

Phase 2 of work on the CRAF is expected to receive funding under the Technical Assistance Programme for Sustainable Energy in the Caribbean (TAPSEC). The TAPSEC is being financed by the European Union under the 11th European Development Fund (11th EDF), with an additional financial allocation from the German Federal Ministry of Economic Cooperation and Development (BMZ). The work programme is being implemented by the GIZ, with support from the CARICOM Secretariat.

TAPSEC’s involvement in the development of the CRAF complements its programme which also seeks to facilitate the establishment of innovative financing mechanisms for renewable energy and energy efficiency projects within CARIFORUM, with focus on their availability to local and regional project developers.

This engagement is expected to support the programmes and actions within the CARICOM Secretariat that focus on: (i) Encouraging the use of financial risk mitigation instruments, and blended public‑private financing structures to reduce the cost of capital; and (ii) Disseminating and promoting successful models and approaches for creating sustainable markets for renewable energy and energy efficiency.

Phase 2 of work on the CRAF is expected to conclude in December 2018.

To learn more about the Credit Risk Abatement Facility (CRAF), contact:

Mr. Wayne Vitalis or Dr. Lavern McFarlane
CARICOM Development Fund
1st Floor East, SKY Mall
Haggatt Hall, St. Michael
Barbados
Tel: 246-436-1849
Email: info@caricomdf.org
Website: www.caricomdevelopmentfund.org

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