Since the initial announcement of the United Arab Emirates-Caribbean Renewable Energy Fund (UAE-CREF) back in January 2017, the progress of the project has been among the most exciting business stories to watch in this region. Part of a multi-stage rollout, projects have been planned, commenced and well progressed in the Bahamas, Barbados and Saint Vincent and the Grenadines — the first three nations earmarked to benefit from the Fund.
As with any big project, it’s always worthwhile reviewing progress as time goes by and, in turn, considering what comes next as the Fund and Caribbean nations alike look to 2020 and the future of renewable energy in the new decade. Let’s go through it now.
NEW RAYS OF SUNSHINE
Work on the first three projects of the UAE-CREF in Barbados, the Bahamas, and St Vincent and the Grenadines was underway by November of 2018. In the Bahamas the task was a 900-kilowatt solar photovoltaic plant, with electric vehicle charging stations. In Barbados, it was a 350-kilowatt solar photovoltaic carport, also with electric vehicle charging stations. In Saint Vincent and the Grenadines, it was a 600-kilowatt solar photovoltaic plant connected to a 600-kilowatt hour battery, joined by an additional 500-kilowatt solar photovoltaic plant.
In January 2018 a second round of funding was announced for projects in the region, with Belize, the Dominican Republic, Grenada, Guyana, Haiti, Saint Kitts and Nevis and Saint Lucia all to benefit.
Saint Lucia was granted funding for solar-powered street lighting at Hewanorra International Airport, and a solar carport for electric vehicles, plus installation of photovoltaic systems in two of the island’s schools. It will save hundreds of thousands of dollars to taxpayers each year.
The elephant in the room for major infrastructure across the Caribbean region is the consideration of natural disasters. But in this regard too the UAE-CREF partnership has devised projects in recognition of this threat, with plans to construct in areas of higher elevation, and where risks posed by a hurricane will be less.
What Does The UAE Get In Return?
The old adage ‘Never look a gift horse in the mouth’ means that any nation accepting aid from beyond its borders must consider the motivation of the donor. This is especially so in an era when globalisation has seen the reach of nations rapidly expand, and the quest for international power and influence become supercharged.
Beyond the business relationships and future economic benefits that this project can bring, for the UAE this Fund is a great example of soft power. As detailed in our STAR Businessweek lead article on the Middle East and North Africa, the MENA region is diverse, historic and vibrant, and this is too often overlooked in the media. But MENA is also where many nations have long had a reliance on fossil fuel exports to power their economies.
While every nation has the right to make its own laws and determine its own affairs, and although the UAE is typically seen as among the less restrictive of nations in its region, now and then incidents do arise that are jarring to more liberal societies, such as people being jailed for the consumption of alcohol. By leading the charge in clean energy, the UAE is able to project an image that is contemporary and cutting-edge. It offers leading technology to Caribbean nations, many of which are suffering some of the most devastating impacts of climate change, inviting them to work alongside the UAE in the development of green energy within the region.
The Sustainable Vision
This project is not just about meeting the energy needs of today, but is an investment in the future. These initial projects could become reference points for expansion of the renewable energy industry across the wider region, as the journey into 2020 and beyond brings the promise of greater affordability and efficiency within the sector.
The International Renewable Energy Agency previously indicated that the decade 2015-2025 would be a crucial one for the sector and its consumers, as a combination of ‘push/pull’ factors, like the high cost of energy across Caribbean nations, demand change and drive innovation. In turn, the renewable energy industry is underwritten by both a desire for profitability and idealistic shift to sustainability in a way that traditional fuel sources are not.
Finding a New Energy
Climate change remains the most substantial threat to the future of nations in our region, and the achievements of this partnership in seeking to combat it are praiseworthy. Completed projects will bring relief to the Caribbean people as they deal with the high cost of electricity which, for many, currently ranks among the highest in the world. While the island make-up of the region has meant that some elevated costs have been unavoidable, the outcome has still been burdensome prices for citizens and small businesses. With this energy initiative, there is the potential to not only lower those prices, but lay the groundwork for a future in which the cost of electricity as a region-wide issue is permanently neutralised.
Walking the Walk
For the UAE, the Fund is consistent with its broader foreign policy goals. Since 2013, UAE foreign aid in renewable energy has topped over US$ 1bn. Beyond the Caribbean, the UAE has forged links with eleven Pacific Island countries, driving their renewable energy construction by providing $350mn in loans via the UAE-Pacific Partnership Fund.
These Funds have helped to offset some of the more odorous news about the UAE, such as the state-owned Abu Dhabi National Oil Company’s plans to increase oil production capacity from 4 million barrels by the end of 2020, to 5 million by the end of 2030.
The UAE-CREF has been most welcome, given the ongoing threat posed by climate change and the fossil fuels behind it. However, many in the Caribbean family will surely long for the day when the UAE announces it is pegging back oil production and ramping up renewable energy output. This won’t happen overnight but the nation’s ongoing role as a key producer of oil does undermine the enthusiasm for a project in this region that has otherwise delivered so many benefits.
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