Barriers to Private Sector Investment in Renewable Energy Sector in Barbados and Caribbean States: Experts Identify Challenges and Solutions

The absence of clearly outlined terms and conditions, the small size of projects and weak implementation by governments, have been identified as some of the main obstacles to Barbados and other Caribbean states attracting more private sector investment in the developing renewable energy sector.

The barriers were highlighted on Thursday, day two of the three-day Caribbean Energies and Investment Forum which is being held at the Lloyd Erskine Sandiford Centre under the theme Sustainable Energy Paths for the Caribbean.

Director of Projects at the Caribbean Development Bank (CDB) Therese Turner-Jones argued that “the absence of a clear playing field is making it difficult for the private sector to enter the space”.

“Unless the private sector knows what is expected of them, what the government is putting in place in terms of regulation, it makes it very difficult to do business,” she warned.

Turner-Jones, who was speaking during a panel discussion on the topic Financing Resilience and Climate Adaptation – the Role of Governments and Multilaterals, said investors expected that things would be done within the promised timeframe, and they wanted policies clearly outlined for the sector.

“We need to talk about procurement policies – . . . which renewable energy products make sense in the particular country that we are dealing with. We need to know about the pricing; we need to know, is it going to change over time, what are the variables that change the tariffs over time,” she said.

“I think the private sector wants that bare minimum in terms of an environment to say ‘yes, I want to do business in the electric mobility field, in the solar field or in any other area that we think is important to evolving the sector’.”

Director for the Caribbean Region with the World Bank Lilia Burunciuc said that in a recent World Bank study in the Organisation of Eastern Caribbean States (OECS), several barriers to investment in the sector were identified.

In addition to the lack of adequate policies and regulations that made it “difficult” to attract investment, the size of projects was simply unattractive due to their small size.

“What is the solution here? Work regionally, do things regionally and make sure that your regulations are all compatible,” advised Burunciuc.

She also indicated that the market risk perception was another obstacle, as well as the lack of modern national grids that are able to readily accommodate electricity from renewable energy sources.