Funding for Geothermal Development in the Caribbean

Power generation in the Caribbean region is currently dominated by imported fossil fuels, such as diesel and oil, despite there being many available renewable sources of energy. Geothermal energy is a renewable resource which takes advantage of heat in the earth’s crust in underground reservoirs. This heat can be used for heating and cooling or electric power generation. The advantage of geothermal energy is that it is a relatively constant and a reliable source of energy giving it a high capacity factor and allowing it to reduce pollution and electricity dependency on fossil fuels. Compared to other renewables, such as solar or wind, geothermal has shown little progress over the past decade. Currently, 15 percent or less of the Latin American and Caribbean region geothermal resource potential is exploited for power generation (Berman et al., 2018). High electricity costs, regular power outages and a strong geothermal potential suggests geothermal can be an ideal alternative for power generation in the region. One of the keys to unlocking geothermal potential in the Caribbean is to make funding available for project developers. Oftentimes, this is difficult due to the smaller economies of the countries in the region. Several supporters of geothermal energy with substantial capital, such as the Caribbean Development Bank and the Inter-American Development Bank, have mobilized funding to aid in overcoming the risks encountered by developers in pursuing geothermal energy projects. This paper aims to identify and provide a review of the mechanisms available to secure funding for geothermal development in the Caribbean.