Americas Caribbean Climate Change & Climate Action Energy & Environment Energy Markets & Governance Energy Transitions Oil and Gas Politics & Diplomacy Renewables & Advanced Energy
Issue Brief September 26, 2023

A roadmap for the Caribbean’s energy transition

By David Goldwyn, Eugene Tiah, and Wazim Mowla

Table of contents

Drivers of the Energy Transition and System Transformation
What Does the Current Renewable Energy Landscape Look Like?
Challenges to the Energy Transition
How Can We Ensure that the Caribbean Region’s Energy Transition is Realistic?
A Five-Step Roadmap to the Caribbean’s Energy- System Transformation
Strengthening the Caribbean’s Energy Partnerships Around the World

Working Group Members
About the Authors


Caribbean countries are in desperate need of an energy transition11The Caribbean countries covered in this report include Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago. Disproportionately high electricity costs impede economic development, stress public finance budgets, and harm the competitiveness of tourism and other industries. Power grids are undercapitalized and vulnerable to climate change and extreme weather events. The region’s small markets and its import-dependent economies are disadvantaged by volatile oil and gas prices, rising inflation, and supply-chain disruptions. And, because most Caribbean countries are categorized as middle- or lower-middle-income economies by the World Bank, access to concessional finance and attracting commercial investment in power generation and transmission are common challenges. Only the Southern Caribbean (e.g., Trinidad and Tobago, Guyana, and Suriname), routinely attracts significant levels of private investment due to rich fossil-fuel resources. All this paints a precarious scenario for the Caribbean. It needs to build competitive and resilient economies, which can only be done with access to affordable and reliable energy.

The Caribbean requires both an energy transition and an energy-system transformation away from its reliance on fossil fuels. Transitioning power generation and transportation from fossil fuels to higher shares of renewable energy and battery storage will address the region’s vulnerability to fossil-fuel price volatility and concerns about energy-system resilience. But regional energy systems must also be transformed. If energy systems (including electrical grids and utility structures) are not upgraded and modernized, most power grids will be unable to integrate significant renewable-energy projects and the region will remain unable to attract large-scale renewable projects. It will be important for the international community to recognize that the region’s dependence on fossil fuels will persist over the next decade as the transition takes place. Affordable access to lower-carbon fossil fuels, such as natural gas, will be needed to provide backup power generation, and to increase resilience to renewables’ variable nature and their vulnerability to climate change.

We propose a five-step roadmap that Caribbean countries, the business community, multilateral development banks (MDBs), regional institutions, and partner nations can undertake to transform the region’s energy systems and accelerate the energy transition. The roadmap includes: conducting energy modeling and analysis; modernizing energy grids; diversifying utility structures; creating “bankable” projects; and scaling project investment to national and subregional levels. The roadmap is expected to be a guide for the Caribbean and its partners, as some countries are further along in the transition than others, and overlap between steps will sometimes exist. For these transformations, we expect the initial cost of energy-sector investments to range from $5 billion to $7 billion2All dollar figures are in US dollars (USD) unless otherwise specified. With the twenty-eighth meeting of the Conference of the Parties (COP28) approaching, and the international community recognizing the need to assist countries vulnerable to climate change, the time is ripe for a commitment of international support for the Caribbean’s energy transformation3“COP28 President-Designate Tells CARICOM Heads of Government That the UAE Is Focused on Uniting Parties in a COP of Action, a COP for All, and a COP That Delivers for All,” Yahoo Finance, July 5, 2023,

To date, the region’s energy transition has been slow and incremental. The small nature of Caribbean economies and energy grids results in smaller renewable-energy projects. Projects also come with high costs due to several political, regulatory, technical, and financial risks, as is detailed in later sections. Long-standing undercapitalization of utility systems limits Caribbean governments’ ability to meet renewable-energy targets and presents a challenge for leaders who cannot abandon existing structures for new, uncertain ones. The way forward for the energy transition needs to be creative and politically realistic, equitably serving government, private-sector, and citizen interests.

Given the urgency of the moment, in January 2023, the Caribbean Initiative at the Atlantic Council convened a Caribbean Energy Working Group (CEWG) to identify the main energy security challenges and to work with government officials, the private sector, and multilateral organizations to propose new and action-oriented recommendations that would facilitate a responsible and realistic energy transformation. CEWG members emphasize that a meaningful transformation of Caribbean energy systems is a necessary precondition to completing the energy transition. In 2023, members of the CEWG met virtually and in person five times to undertake a careful examination of the energy challenges and the drivers of transformation. In its findings, the CEWG outlines a series of steps that the United States and other global partners should consider, particularly with COP28 convening this year from November 30 to December 12.

This report identifies the main catalysts of the Caribbean’s energy transition and provides a short overview of the current landscape of renewable-energy production and capacity. Then, we detail the impediments to the region’s energy transition and explain how the five-step roadmap can be utilized. To buy time for the region, this report acknowledges the importance of resilience and reliability, including the unavoidable role natural gas can play as a transitional fuel. Finally, we highlight two technical and financing programs the United States—the Caribbean’s main global partner—and other partner nations can use to provide tools to the region to accomplish the roadmap’s steps.

Drivers of the energy transition and system transformation

Two main challenges are driving the need for a regional energy transition, especially for political leaders: the economic costs of climate change and dependence on imported petroleum products. As climate disasters increase in frequency, the prospect of lost power for days, or even weeks, will drive Caribbean political and business leaders to ensure that the region’s access to power generation is reliable. Today, that reliability comes from carbon-intensive fuels, posing a question for leaders about whether generation can alternatively come in the form of renewables, natural gas, or a combination of the two. However, the stronger factors driving the energy transition are the high cost of importing petroleum products and the effects this has on a country’s economic growth.

The climate crisis: Climate change is the existential driver of the energy transition in the Caribbean. Rising temperatures and sea levels are causing stronger tropical storms, drought, changing precipitation patterns, and ocean acidification. These climate-induced effects also pose a risk to the operations of governments and businesses, with blackouts or brownouts leaving people and institutions without electricity and power for days, or possibly weeks. This was most evident in Dominica, where Hurricane Maria destroyed 90 percent of government structures and left people without access to electricity, except for a few portable generators, for weeks4Michael Holmes and Dominique Van Heerdan, “Dominica Knocked to Its Knees by Hurricane Maria’s Might,” CNN, September 21, 2017,

Effects on economies dependent on energy imports: Businesses and average Caribbean citizens are dependent on energy imports. As detailed in Figure 1, the Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE) noted that Caribbean Community (CARICOM) countries, on average, import an estimated 87 percent of their oil, compared to a global average of 21 percent. Meeting consistent domestic demand leaves the region vulnerable to global energy-price volatility, which results in high electricity costs for the region (except Trinidad and Tobago). As a result, consumers in some Eastern Caribbean countries, as of 2021, pay almost three times as much for energy as their counterparts in the United States, with citizens in Barbados paying $0.332 per kilowatt hour (kW/h) and those in Antigua and Barbuda paying $0.367 per kW/h, compared to $0.109 per kW/h in the United States5“The Price of Electricity per KWh in 230 Countries,”, last visited July 15, 2023,

This affects crucial economic sections in the Caribbean, such as the travel and tourism industry, which is a significant user of energy and is a main source of gross domestic product for many countries. Ten of the top twenty tourism-dependent economies globally are CARICOM members.6Henry Mooney and David Rosenblatt, “Regional Overview: The Fragile Path to Recovery,” Inter-American Development Bank, Caribbean Quarterly Bulletin 10, 2 (2021), 7–8, Electricity and fuel, on average, make up between 10 percent and 20 percent of a small Caribbean hotel’s operating costs.7“Energy Conservation,” Caribbean Hotel and Tourism Association, last visited August 5, 2023, These costs and others, such as insurance premiums, increase after climate disasters, ultimately making the region less competitive vis-à-vis other tourism-based economies around the world.

An International Monetary Fund working paper notes that these high electricity costs—along with inefficiency across power sectors and generation—have eroded the region’s economic competitiveness over the past twenty years.8Arnold McIntyre, et al., “Caribbean Energy: Macro-Related Challenges,” International Monetary Fund, March 2016, 7–8, Figure 2 shows varying levels of electricity demand among CARICOM countries. Large portions of demand are for residential usage, meaning that ordinary Caribbean citizens likely carry a significant part of the burden of high electricity costs, which depletes their purchasing power and savings. The result is that citizens are unable to purchase goods, and the owners of micro, small, and medium-sized enterprises are unable to finance new programs to scale their businesses.

What does the current renewable energy landscape look like?

The region’s geographic diversity and breadth, as well as its location, have primed it for an abundance of renewable-energy potential. Caribbean countries range from Guyana and Suriname in South America to Belize in Central America and The Bahamas off the coast of Florida. Being near the equator means there is high potential for solar-power penetration and wind resources. As Figure 3 shows, every country in the region has the potential to use solar photovoltaic (PV) and wind technologies—the two current most cost-effective clean-energy technologies on the market. Countries can also utilize technologies such as biomass gasification and biomass anaerobic digestion, but these options are not yet commercially viable at the scale of production in the region.

Strong ocean currents and volcanic formations in the Eastern Caribbean (Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines) might also bring other smaller-scale renewables into the energy equation. According to the CCREEE, these five countries have an estimated 6,290 megawatts (MW) of “available geothermal resources,” which is well above the region’s needs.9Devon Gardner, “The Caribbean Connection: High Level Breakfast Engagement on Regional Energy Security around the Margins of the 43rd Regular Meeting of the Conference of CARICOM Heads of Government Meeting,” Caribbean Centre for Renewable Energy & Energy Efficiency, July 5, 2022. Therefore, power generation from geothermal reserves can be a contender for baseload power to enhance grid stability, along with liquified natural gas (LNG) and battery-storage options. However, as seen in the five-step roadmap below, energy modeling and analysis are needed to determine and evaluate the proven availability and cost-effectiveness of employing these clean-energy technologies.

So far, installed renewable-energy capacities have been limited. Figure 4 shows that, as of 2019, the region’s renewable energy capacity is only at 11 percent of its total installed capacity. Some countries have fared better than others, with Belize at 48 percent and almost 100 MW of installed renewable capacity, and Suriname at 46 percent and 189 MW installed. In short, the CARICOM is falling short of its target of generating 48 percent of its electricity from renewables by 2027. The following section looks at the reasons behind this challenge.10Malaika Masson, David Ehrhardt, and Veronica Lizzio, “Sustainable Energy Paths for the Caribbean,” Inter-American Development Bank, 2020,

Challenges to the energy transition

Several hurdles stand in the way of the Caribbean energy transition, primarily due to existing energy systems that are not equipped to incorporate renewables. They range from small energy grids to limited options for affordable financing to technical-capacity issues. At the same time, even if an abundance of renewable-energy projects entered development today, there is no guarantee
e that each would make it to the financial investment decision (FID)—i.e., the point of determining to proceed or halt a project—or, once a project is built, that it could be connected to the grid. The challenges are summarized below.

Small projects, high costs: Caribbean governments have relied on a project-by-project approach for renewable-energy development. However, the grid size in the region has been an impediment to this approach. Caribbean countries are small and isolated, and have limited viable space for utility-scale solar (large solar PV projects) or onshore wind farms—the size of projects that typically allow for economies of scale. As shown in Figure 4, the total installed energy capacity across the Caribbean varies, ranging from 27 MW in Dominica to more than 2000 MW in Trinidad and Tobago, and most islands’ energy grids with less than 250 MW. The value of scale on renewable-energy projects is a reduction in the cost per unit of energy generated. Project developers usually need projects that are sized at a minimum of 30 MW to secure lower energy costs. This is why the project-by-project approach disadvantages Caribbean countries, as projects are likely to be well below the 30-MW marker.

Further, projects are inherently more expensive in the Caribbean because of the lack of a local supply chain and the inability to procure at scale. The Caribbean is also vulnerable to climate-induced disasters and related damage to renewable-energy infrastructure.11Sapphire Vital, “An Unexpected Catalyst: How Hurricane Maria Is Still Changing the Energy Sector in Dominica,” Caribbean Centre for Renewable Energy & Energy Efficiency, 2020, This creates additional risks and uncertainties for businesses and individuals investing in renewable energy, as well as the need for climate-focused project designs and materials.

Technical capacity: A major obstacle faced by nearly every Caribbean nation is weak administrative capacity. The number of regulators and policymakers available to devise transformation plans and implement them is small. Although some countries, such as Jamaica and Barbados, have adopted frameworks for renewable-energy introduction, existing administrators are inexperienced in tariff setting and procurement. For the investor, this looks like slow decision-making and indecision, with many years’ wait for permits. For governments, technical-capacity limits result in an inability to choose between project proposals, set tariffs, or design auctions. The kind of assistance required varies by country, but many require an initial energy-system modeling and analysis to illustrate to ministries of finance and political leaders that a new system will be fiscally viable—and, therefore, politically acceptable—which comes later in the roadmap.

Project development: While many investors seek to develop renewable-energy projects, there is a traditional valley of death between initial project development and financing. These initial project costs of prefeasibility and feasibility studies, environmental assessments, production of design drawings, and other elements necessary to achieve financing lead to delays, often measured in years, which obstruct creation of a project pipeline. Even if concessional financing and equity support can be delivered, there must be a viable project pipeline to finance. Many governments have assistance in this space, but nearly all of it is tied to domestic content. This creates a complex environment for investors, who must deal with multiple bureaucracies. Better donor coordination—or, better yet, a more flexible project-development mechanism—could dramatically accelerate creation of a project pipeline. This is covered in step four of our roadmap.

Project finance: Most commercial renewable-energy projects have been funded through project finance—
a project loan backed by the cash flow of the specific project. The predictable nature of cash flows from a renewable-energy project means they are highly suited to this type of investment mechanism. The financing of a project requires careful considerations of all its different aspects, as well as the associated legal and commercial arrangements. Before investment, any project-finance lender will want to know if there is any risk that repayment will not be made over the loan term. Mitigating these risks and creating “bankable” projects are discussed in step four of the roadmap.

Existing utility constraints: There is a mix of state and private ownership of Caribbean utilities (see Figure 5). State-controlled utilities are responsible for providing reliable power, and tax revenues generated from fuel importation are often used to fund schools and critical public services. Many utilities signed long-term contracts for electricity supply before renewable-energy alternatives were viable or national targets were set. Therefore, these contracts are binding until the end of their terms and, if the utility does not see any economic benefits to introducing renewables, they present a significant barrier for governments. Even when the capital cost of introducing a new generation of technology can be managed, a utility must finance the cost of the technology while maintaining reliable supply. This means that while there are savings from reducing fuel purchases and incorporating renewables into the grid, they do not outweigh the cost of acquiring new technology generation and the accompanied transmission to allow for the increased power load. Simply put, cleaner energy does not mean cheaper energy for the consumer, and that is a serious political challenge that countries need help in addressing.

Most utilities in the Caribbean also have top-down, vertically integrated structures: i.e., a single company owns and operates all aspects of the electric power system, including generation, transmission, and distribution. This means that the utility company (and, in some cases, the government itself) owns the power plants, the transmission lines, and the distribution network that delivers electricity to consumers. Some of the drawbacks to this model include limited innovation and lack of competition and customer choice, which all drive high costs for consumers.

It is easy to criticize utilities for their reluctance to adopt new technologies or their resistance to competition, but they must fulfill their obligations to provide reliable power while potentially facing resistance from governments regarding the potential loss of tax revenue from customers for higher tariffs, or from stakeholders because of the risk to existing revenue streams. The energy transition requires a new business model for utilities, but the challenges of cost and risk must also be addressed. Step three of the roadmap tackles this challenge.

How can we ensure that the Caribbean region’s energy transition is realistic?

Achieving 100-percent power generation from renewable energy is not reliable or realistic in the short to medium term. Solar and wind power are variable sources, as the sun does not always shine, and wind speeds vary on a day-to-day basis. Most power generation using renewable energy requires a complex and modernized grid system, and one that will heavily rely on battery storage. Right now, a transition to strictly renewables, even if it were financially possible, would only exacerbate the vulnerabilities facing Caribbean governments and consumers. Energy systems, therefore, require a hybrid model: the ability to take on clean energy while also incorporating low-carbon fossil fuels, such as natural gas, to substitute for bunker fuel and diesel as the building blocks for the region’s energy transition.

Utilities that are considering substituting diesel for natural gas can only do so if affordable natural-gas supply is available. Natural gas is priced globally, and the cost of transportation and liquefaction are usually added, making volatile LNG prices historically risky for import-dependent Caribbean countries. However, the region itself has underutilized export capacity that can service power systems during the energy transition. Jamaica currently sources LNG from Trinidad and Tobago and the United States to satisfy its domestic energy demand, meaning this is a potential option for other Caribbean countries. Few Caribbean countries can import and re-gasify natural gas, but modern technology is reducing the cost of entry thanks to power systems that can incorporate floating storage and regasification units with either a pipeline to shore or shipments of small containers.

Over the long term, Guyana and Suriname, along with Trinidad and Tobago, might be able to provide the necessary supply to the region—but, in the short term, the United States can play a vital role. The United States is the largest supplier of LNG to the Caribbean. The National Gas Company of Trinidad and Tobago is currently evaluating the possibility of developing small-scale LNG (ssLNG) infrastructure (i.e., liquefaction and regasification) that can service regional demand, where reexports from the US Gulf Coast can be an option. Natural gas is an important source of energy supply, with lower carbon than kerosene and bunker fuel, and has a role to play in the Caribbean’s energy transition. If this occurs, a hybrid approach that combines natural gas used for baseload and backup power with renewables can be successful, as it has in other parts of the world, notably Mexico and California. To the extent that overtime battery-storage technology improves sufficiently to meet the resilience needs of small islands, ssLNG can be transitional and phased out over time.

In 2021, General Electric deployed four gas turbines in California as part of the state’s plans to provide reliable power to its energy grid to address concerns about extreme weather conditions and renewable sources being unable to meet peak demand.12Darrell Proctor, “GE Gas Turbines Installed to Support California Power Supply,” Power Magazine, October 6, 2021, Frequent droughts and seasonal wildfires have limited the hydropower sources California uses to power its grid. The use of the four gas turbines creates greater diversity on the grid, making electricity access more reliable. Further, grid operators’ ability to switch between gas and renewable sources also helps manage consumer costs. Similarly, Mexico is relying on a mix of gas turbines and renewable power to meet its growing electricity demand and to provide power to citizens after natural disasters. In 2017, two gas turbines were installed in Sinaloa, where consumption is expected to skyrocket in the next twenty-five years.13“GE to Supply Two Super-efficient Gas Turbines for Mexican Power Plant,” MexicoNow, June 21, 2017, This model provides transitional power that can be phased out over time and can be an ideal resilience solution for many Caribbean countries.

A five-step roadmap to the Caribbean’s energy-system transformation  

An energy transition in the Caribbean is challenging without a transformation of its energy systems. A competitive energy system for these countries needs to provide reliable, affordable, and resilient power to businesses and citizens. Therefore, we propose a five-step approach that, if undertaken, will make the energy transition easier and cost effective without putting financial strain on Caribbean consumers. These steps (detailed below) are not expected to occur in a silo, but together, with some likely overlap across steps. Further, Caribbean countries are in different stages of their energy transition and some, such as Jamaica, Barbados, and Belize, will be further along in the five-step process than others. Steps one, two, and three are the foundation-setting aspects of the roadmap, and steps four and five focus on implementation.

There is an expected initial investment of between $3 billion and $5 billion based on International Monetary Fund (IMF) projections from 2016. Across the region, the estimated breakdown (adjusted for inflation since 2016, making the initial investment $5 billion to $7 billion now) includes $1.7 billion to build and upgrade power plants and $455 million in energy efficiency and conservation initiatives (both covered in step one); $1.8 billion to introduce new natural-gas facilities (covered above); and $1.2 billion in renewable-energy investments (covered in steps four and five).14McIntyre, et al., “Caribbean Energy: Macro-related Challenges.”

Step 1 (starting from year one): The first step is to conduct national- and regional-level energy modeling and analysis. Using software, Caribbean governments, the CCREEE, MDBs, and partner nations should evaluate each country’s energy system and its various components, including supply, demand, storage, transport, and available technologies. The modeling helps identify a cost-effective and renewable energy-system plan that is best suited to each country. Caribbean nations’ energy systems must be modeled to determine the right options for decarbonization, cost effectiveness, reliability, and resilience. Some countries—such as Jamaica, Saint Lucia, Barbados, Suriname, and Trinidad and Tobago—have already prepared Integrated Resource & Resilience Plans (IRRPs), a form of energy modeling for the electricity sector. However, these IRRPs do not take into account demand-side management, storage options, and other energy usage such as transportation. Hence, a holistic energy model, which can occur from a six- to twelve-month period, should be built to incorporate all energy inputs, which will provide the necessary data to allow for a transition to a modern, low-carbon energy system.

Energy modeling will also help Caribbean countries increase their energy efficiency—a crucial step for decarbonizing their economies. An Inter-American Development Bank (IDB) report shows that Caribbean countries have a higher average energy intensity than their counterparts in Latin America, and investing in their energy efficiency can net $6.1 billion in economic benefits over twenty years.15Masson, et al., “Sustainable Energy Paths.” Measures can include using LED lighting, data-center efficiency, and daylighting controls, among others.16Ibid.

Step 2 (ranging from years two to five): As step one is completed, step two focuses on the transition to a modernized grid and moving toward distributed generation. This transition is a transformation from a monolithic grid, which is stagnant and has limited flexibility, to one that is modular and agile. Centralized power generation is characterized by decisions driven by affordability and reliability, but this leaves out a variety of factors that lead to more cost-efficient generation, cost externalities, and the preference of local communities. Distributed generation, along with intelligent load control, is driven by cost and environmental sustainability, personalized energy options, and security. In the Caribbean, a modernized grid is one that needs six attributes, including

• resilience after climate-related disasters;
• reliability to decrease power outages;
• security for energy infrastructure;
• affordability to protect against high costs for consumers;
• flexibility to adjust to weather patterns; and
• sustainability to onboard broader clean energy and energy-efficiency methods.

At the same time, given the climate-induced challenges facing the Caribbean, a resilience-based approach is necessary for the region’s energy transformation and transition. The frequency of tropical storms and changes in weather patterns means that decentralized power generation effectively becomes a form of climate adaptation. In centralized grids, strong storms that damage energy infrastructure can cause country-wide blackouts. In the aftermath of climate-induced natural disasters, using micro grids means that power lost on one side of an island does not necessarily affect the other side. Further, battery storage is essential to creating more reliability when using intermittent, renewable sources.

Step 3 (ranging from years two to five): Once energy modeling is complete, along with a transition to a modernized grid, step three requires diversifying state-owned utilities and top-down vertically integrated systems. As already discussed, one challenge facing the Caribbean’s energy transformation and eventual transition is the vertical integration of utility structures in most countries in the region, except for Jamaica and Trinidad and Tobago. These countries have divested some of their generation assets and have contracted capacity from independent power producers (IPPs), which allow for competition in power generation, reducing costs and improving quality of service and reliability. Partner nations and MDBs should work with Caribbean governments, utilities, and regional groups to foster this model, but the varying nature of utility ownership and power-system diversification requires different strategies.

• For vertically integrated utilities, governments need support to incorporate IPPs into the system.
• For those that have IPPs, governments need support moving toward corporate or self-generation power purchase agreements (PPAs).
• For utilities with very small grids, governments require support to implement feed-in tariffs (to encourage investment), net metering, or net billing solutions.

Step 4 (earliest start in year two): De-risking and delivering “bankable” projects is step four in the roadmap. The first three steps are focused on ensuring that developers, governments, and MDBs are creating the right environment for new renewable-energy projects. But, even with the right environment or a strong foundation, if projects are not bankable—meaning that investors and developers see a likely financial return on a project—the energy transition will stall. Many of the risks that deter project finance are discussed in this report, so step four focuses on how to create a bankable project.

Most renewable projects are financed on a project-finance basis (in which lenders absorb the risk of the project itself). Then a special-purpose vehicle (SPV) is created for the project and funds are injected, or a loan is secured based on the fundamentals of the project, meaning whether investors can generate sufficient revenues to service debts and pay requisite returns on equity. When considering a project, lenders prepare a risk-return analysis to assess these traits along with major risks that can negatively impact the project, leading them to determine the project’s bankability. Therefore, for a project to be bankable in the Caribbean, certain protections for lenders are needed. Some of these protections might include:

• Feasibility studies that underpin the success of the project.
• A solid offtaker that is in a comfortable liquidity position and has creditworthiness.
• Adequate insurance coverage over the assets, loss of income, contractor risks, property damage, and business interruptions.
• Long-term PPAs which have components, such as take-or-pay arrangements, competitive prices in markets, and fixed tariff per kWh.
• Environmental social and impact assessments.
• Equity injection from developers and borrowers that is between 20 percent and 40 percent.
• Secure site and site access.

Once a bankable project is created, MDBs would then seek to provide financing to sponsors or developers to build new renewable-energy projects. A combination of project financing, technical assistance, and other donor funding, such as blended finance, can help move projects through the “valley of death” by providing needed financing that help projects reach the financial investment decision. To help projects successfully reach the FID, governments should create an enabling environment that allows projects to flow and reach maturity. In this case, MDBs can issue contingent recoverable grants (CRG) to governments to support project development (such as creating appropriate legal frameworks and designing permitting and auction processes), which can then become a concessional loan once projects reach FID and revenue streams can be forecasted. An example currently in use is the Caribbean Development Bank’s GeoSmart Initiative, which provides grants to governments in the Eastern Caribbean to support early-stage and exploratory drilling to support future geothermal project development.17“CDB GeoSmart Initiative: Supporting Geothermal Development in the Eastern Caribbean,” Caribbean Development Bank, last visited August 14, 2023, These grants can be expanded and extended from MDBs, such as the Inter-American Development Bank and the World Bank.

Step 5 (ranging from years three to ten, but only after at least step one has been completed): The fifth and final step in the roadmap is scaling from a project-by-project approach to national, and potentially subregion, levels. A series of small projects is neither attractive to developers nor helpful to Caribbean countries in reaching their national renewable-energy targets. This method has proven to be infeasible and cost inefficient for potential developers, especially for sourcing projects across the Eastern Caribbean. Moving beyond a project-by-project approach means scaling investment and regulatory frameworks to a national level, which can further encourage the entry of potential developers. Scaling to national levels has benefits across the region. Changes in regulations that encourage investment in renewables can become best practices for other countries with similar-sized economies and renewable-energy potential. Simply put, it ensures that governments do not need to “reinvent the wheel” when they can instead build on lessons learned from their Caribbean neighbors. Examples of national-level investment models already exist and have been successful in other countries, such as Argentina.

During a severe financial crisis, Argentina created the RenovAr program, which led to more than $7.5 billion in investment in renewable energy between 2016 and 2019.18Silvio Marcacci, “Argentina May Be the Hottest Renewable Energy Market You Haven’t Heard Of. Can It Spur a Global Boom?” Forbes, October 15, 2019, An internationally competitive investment framework that was supported by risk mitigation and technical support produced remarkable and lasting results. The key factor was the political support of the government, which was willing to take on the risk of using a new framework, based on the expectation that it would produce positive results. While not a perfect analogue, the model of comprehensive reform can be adapted for the Caribbean and is slowly taking shape in Jamaica.

Securing national buy-in for renewable energy projects in Jamaica
In April 2023, Greenmap (now called Renewables for All, or RELP) and the Generation Procurement Entity of Jamaica (GPE) agreed to work together to design a procurement program for renewable-energy projects.19“Greenmap and the Government of Jamaica Work Together to Scale Up Renewables in the Country,” Greenmap, press release, May 22, 2023, With Greenmap’s advisement, Jamaica announced an expression of interest (EOI) and is expected to launch a public auction for renewable projects of up to 268 MW of electricity generation from renewable energy; the aim is to help the country attract concessional financing from multilateral development banks. Following the announcement, and as an example of government buy-in, Jamaica amended its Electricity Act of 2015 to signal that it would replace almost 172 MW of power-generating plants with renewable sources.

The RELP-Jamaica example is not exactly similar to the model in Argentina. But it shows that when national governments are brought into the process and there is sufficient political will, accelerating and reaching renewable-energy targets is much easier. This government backing for the initiative should, in turn, help with overhauling policy and regulation to reduce risks and make the introduction of renewables more feasible—adding to project bankability and reinforcing step four.

Strengthening the Caribbean’s energy partnerships around the world

As discussed, a Caribbean energy transition requires a five-step roadmap. Partner nations should utilize the roadmap to support a transformation of Caribbean energy systems so that, in the short term, they are able to provide reliable, affordable, and resilient power to consumers and, in the long term, grids are modernized to incorporate renewable energy. Here, strong partners of the Caribbean—such as the United States, the United Kingdom (UK), Canada, the United Arab Emirates (UAE), and others—can play a role in mobilizing international support. In support of the five-step roadmap, we propose two programs that partner nations can create independently, as a multilateral effort, or in tandem with other donors.

Caribbean program for energy system transformation (CPET): The US government, for example, can leverage the expertise of the US Agency for International Development (USAID), the US Trade and Development Agency (USTDA), and the US Department of Energy (DOE) to work with third-party contractors, primarily those in the Caribbean, to

• conduct energy-system analysis and modeling to identify the type and scale of renewable energy needed per country;
• use modeling outcomes to promote decentralized power generation; and
• provide technical assistance to governments and existing utilities on best practices for introducing IPPs, negotiating corporate power-purchase agreements, and designing distributed generation-compensation mechanisms.

Each objective is fundamental to enabling the region’s energy transition. USAID can provide a mix of grants and financing to institutions, such as the CCREEE and the Organization of Eastern Caribbean States (OECS), to perform energy modeling. The USTDA can provide financing for technical assistance to use the energy modeling to help countries decentralize their grids. The DOE can work with Caribbean governments, the Caribbean Electric Utility Services Corporation (CARILEC), and the private sector to support diversifying vertically integrated utility structures.

Caribbean project financing, equity, and development support program (CFED program): Partner nations should work with Caribbean countries, multilateral development banks, and other donors to create a two-tiered financing and equity support program for potential developers, to help projects move through the development pipeline and then receive affordable financing after FID is reached. One example would be increasing the existing pool of resources of IDB Invest, the private-sector arm of the IDB Group, to provide upfront equity support to get projects started.

As part of the COP28 process, the United States should first make a concerted effort to rally and mobilize donor countries, including Canada, the UK, China, the UAE, and the European Union to provide the needed mix of grants and concessional loans to increase resources across IDB Invest, the Caribbean Development Bank (CDB), and the OECS to help with equity support. Further, as projects reach the FID, the United States should also mobilize donor countries to help create a new concessional-finance facility or help expand the scope of the newly launched Blue Green Investment Corporation to be directed toward energy transformation and the transition to green energy. To increase investor confidence, and to demonstrate that the international community seeks to finance an initial cost of $5 billion to $7 billion in direct costs (which accounts for inflation since 2016) for energy system transformation across the Caribbean, the facility should incorporate the support of the IDB, the Caribbean Development Bank (CDB), and the World Bank. However, to ensure that the facility can meet the needs of specific Caribbean countries, it should be controlled by the CDB, the region’s premier indigenous financial institution.


The Caribbean’s energy transition grows more urgent each day. The high cost of imported petroleum products stresses regional economies and is becoming more and more challenging, particularly as the war in Ukraine and Organization of Petroleum-Exporting Countries (OPEC) oil-production cuts keep energy prices high. As explained, an energy transition in the Caribbean is complex, requiring an overhaul of the energy system before large-scale renewable energies can be connected to energy grids. This paper’s five-step roadmap is designed to ensure that the region’s future energy systems are reliable, affordable, and resilient to the effects of climate change and exogenous economic shocks, and can underpin economic growth across the region. The investments to implement this kind of energy transition are modest by international standards. As the world takes stock of its progress (or lack thereof) on the path to 2050, while prioritizing countries most vulnerable to climate change, now is the moment for the international community to support the Caribbean’s energy transformation. This report provides a potential pathway to do so.

Working Group Members

David Goldwyn (Co-chair & steering committee)
Global Energy Center’s Energy Advisory Group

Atlantic Council

Eugene Tiah (co-chair & steering committee)
Former Executive Chair, Energy & Industrial Gases Business Unit
MASSY Energy

Mark Loquan (steering committee)
National Gas Company of Trinidad and Tobago

Gary Jackson (steering committee)
Executive Director
Caribbean Centre for Renewable Energy & Energy Efficiency

Cletus Bertin
Executive Director
Caribbean Electric Utility Services Corporation

Daniel Best
Former Director of Projects
Caribbean Development Bank

Thackwray “Dax” Driver
President and CEO
Energy Chamber of Trinidad and Tobago

Chamberlain Emmanuel
Head of Environmental Sustainability Cluster
Organization of Eastern Caribbean States

Devon Gardner
Head and Technical Programmes
Caribbean Centre for Renewable Energy & Energy Efficiency

Marcelino Madrigal
Chief, Energy Division
Inter-American Development Bank

Juan Cruz Monticelli
Section Chief, Executive Secretariat for Integral Development
Organization of American States

Dale Ramlakhan
Chairman, Energy Efficiency and Alternative Energy Committee
Energy Chamber of Trinidad and Tobago

Charlyne Smith
Senior Nuclear Energy Analyst
Breakthrough Institute

Alicia Taylor
Investment Management Lead Officer, infrastructure & Energy
IDB Invest

Frédéric Verdol
Senior Power Engineer
World Bank

Fernando Zuniga
Managing Director, Latin America and the Caribbean
MPC Energy Solutions


The Atlantic Council thanks board member Melanie Chen, who provided the vision and resources to start the Caribbean Initiative, for her financial support of this publication and the corresponding working group. We also thank the Caribbean Energy Working Group members who joined numerous one-on-one consultations that informed this publication, including members who provided relevant data and supported the drafting process, such as Dale Ramlakhan, Mark Loquan, and Alicia Taylor. A special thank you to Jason Marczak, senior director of the Atlantic Council’s Adrienne Arsht Latin America Center which houses the Caribbean Initiative, for his guidance and comments throughout the working group and during the drafting of this publication. Charlene Aguilera managed the production flow of the issue brief and provided important support in its launch.

About the authors

David Goldwyn is president of Goldwyn Global Strategies, LLC (GGS), an international energy advisory consultancy, and chairman of the Atlantic Council Global Energy Center’s Energy Advisory Group. He is a globally recognized thought leader, educator, and policy innovator in energy security and extractive-industry transparency.

Eugene Tiah is a senior business executive with in-depth knowledge and more than forty years of experience in the oil and gas business within the United States and the Caribbean region. He presently provides consultancy services to both public and private sectors.

Wazim Mowla is the associate director of the Caribbean Initiative at the Adrienne Arsht Latin America Center. He leads the development and execution of the initiative’s programming, including the Financial Inclusion Task Force, the US-Caribbean Consultative Group, the PACC 2030 Working Group, and the Caribbean Energy Working Group.

The Adrienne Arsht Latin America Center broadens understanding of regional transformations and delivers constructive, results-oriented solutions to inform how the public and private sectors can advance hemispheric prosperity.

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

Related Experts: David L. Goldwyn