- Investor: IDB
- Category: Sustainability
- Value:US$10M (BBD $20 M)
- Status: Completed
- Duration: February 7, 2011 to June 7, 2017
Sustainable Energy Investment Programme (Energy Smart Fund 1)
to further reduce Barbados’ dependency on imported fossil fuel
The Government of Barbados (GOB) has established an Energy Smart Fund to provide financial and technical support to renewable energy (RE) and energy efficiency (EE) projects in Barbados. To capitalize the fund, the Government has obtained a loan of US$10 million (approximately BDS$20 million) from the Inter-American Development Bank (IADB), under an agreement for the Sustainable Energy Investment Program known as the ‘Energy Smart Fund’. It is being implemented in partnership with the Enterprise Growth Fund Limited (EGFL) through the signing of Management and Deed of Trust Agreements for the establishment and management of the Energy Smart Fund.
The Energy Smart Fund consists of a package of financial instruments and technical assistance to address the main market failures that prevent the country from adopting renewable energy and energy efficient technologies on a large scale. The Fund will not only facilitate subsidised loans for the implementation of viable renewable energy and energy efficient projects but it will also provide grants to businesses for funding pre-investment studies, assessing the technical and financial viability of these projects. Small entrepreneurs in this emerging industry will be able to partner with the Enterprise Growth Fund Ltd. as “Smart Fund Partners” to provide technical expertise, by conducting energy audits and other studies necessary for businesses wishing to access the fund.
The objective of the Fund is to increase the use of viable RE and EE technologies in Barbados, in order to decrease energy costs of the population; increase the country’s energy security by reducing its dependency on imported fossil fuels; and increase local and global environmental sustainability by reducing emissions of polluting substances, particulate matter, and carbon dioxide (CO2) and other greenhouse gases (GHG).
This programme is structured as follows:
Component I: Encourage Energy Efficiency and Renewable Energy Projects, implemented by the Enterprise Growth Fund Limited (EGFL)
- Technical Assistance Facility – provides grants to small and medium sized businesses for funding pre-investment studies for renewable energy and energy efficiency projects.
- Energy Efficiency Retrofit and Renewable Energy Finance Facility – provides subsidised loans to businesses to finance the implementation of renewable energy and energy efficiency projects.
- Pilot Consumer Finance Facility – provides rebates through selected retailers that have experience in the ‘hire-purchase’ consumer finance scheme for renewable energy and energy efficiency equipment.
- Energy Efficiency Lighting Distribution Facility – provides free Light Emitting Diode (LED) lights to a limited number of residential customers of Barbados Light and Power Co. Ltd (BL&P) through the issuance of vouchers.
- Air-condition (A/C) Rebate Trade-In Facility – provides a 50% instant rebate for households and businesses to purchase energy efficient air-conditioning (A/C) units. This facility was cancelled due to the lack of a disposal policy for the old A/C units.
Component II: Institutional Support to the Fund, implemented by the Ministry of Energy, Small Business and Entrepreneurship.
- Discretionary Finance Facility – provides for the public relations and education awareness campaigns; data collection and monitoring and the overall support for the execution of the fund.
The key successes of the Sustainable Energy Investment Programme (Energy Smart Fund) are summarized as follows:
- Technical Assistance Facility – The facility provided twenty-eight (28) grants totaling BBD$449,674.50 for firms to undertake energy audits and/or renewable energy designs. The Fund Manager enlisted twelve (12) local entrepreneurs as Smart Fund Partners to undertake these feasibility studies.
- Energy Efficiency Retrofit and Renewable Energy Finance Facility – The fund provided twenty-five (25) low-interest loans totalling BBD$16,470,299.41 to businesses for the financing of renewable energy and energy efficiency projects. These projects which include the installation of a total of 1.812 Megawatts of solar photo-voltaic systems, energy efficient refrigeration and cooling, and energy efficient lighting are cumulatively expected to save 4.175 Megawatts of energy per year. The combined output of these energy efficiency and renewable energy measures is projected to save the equivalent of 2,225 barrels of oil per year which is equivalent to US$110,000.00 based on current energy prices.
- Pilot Consumer Finance Facility – EGFL partnered with Massy Stores (formerly DaCosta Mannings Retail Ltd.) and Unicomer Barbados Ltd. T/A Courts to provide rebates for customers purchasing energy efficient and renewable energy equipment totalling approximately BBD$1 million. Approximately two thousand, five hundred (2,500) customers have benefitted from rebates of 20% totalling up to $500 for purchasing technologies including energy efficient refrigerators, televisions, washing machines and solar water heaters.
- Energy Efficient Lighting Distribution Facility – The EGFL partnered with local manufacturer Caribbean LED Lighting Inc. to promote and encourage the use of energy efficient lighting by distributing approximately 57,000 light emitting diodes (LEDs) free of cost to more than 11,000 persons, which represents 10% of the households in Barbados. These rebates totalled approximately BBD$1.05 million. It is envisaged that Barbados will reduce its energy needs by up to 44 gigawatts, which is equivalent to reducing its fossil fuel intake in the amount of 26,130 barrels of oil or US$1.3 million over the expected life of the LED bulbs, based on current oil prices.
- Institutional Support to the Fund (BBD$2 million) – These discretionary funds were provided for the public relations and education awareness campaigns; data collection and monitoring and the overall support for the execution of the fund. The Ministry of Energy launched the “Smart Energy Barbados” public relations campaign which sought to educate the business community and the general public on the benefits of renewable energy and energy efficient technologies and sensitise them to the financial instruments being offered under the Fund. During this campaign the Ministry conducted a workshop to educate and inform manufacturing, agriculture and cottage industries to the benefits and opportunities of renewable energy and energy efficient technologies. The campaign also launched its social media platform and website, to increase awareness and provide critical information on the sustainable energy technologies, as well as energy conservation practices.