Catching the sun

Masdar Clean Energy continues to fund renewable deployment across the Caribbean.

The Abu Dhabi Fund for Development (ADFD), through Masdar Clean Energy, has been financing clean energy projects around the world, including several in the Caribbean. At the end of January 2021, ADFD had funded more than 90 projects across 65 countries over a decade with a total value approaching USD 1.3 billion.

The USD 50 million UAE-Caribbean Renewable Energy Fund (UAE-CREF) was established in 2017 under the UAE’s Foreign Aid Policy and five year strategy to assist Small Island Developing States to achieve their national priorities and Sustainable Development Goals.

A small sum of money you may think but it is the largest initiative of its kind in the region and the strategic aims of the project are important: to reduce dependence on fossil fuel imports, reduce energy costs, increase energy access and enhance climate change resilience.

Clean energy projects in the Bahamas, Barbados, and Saint Vincent & the Grenadines were inaugurated under the initiative in March 2019. In 2020, despite the challenges of the COVID-19 pandemic, the Fund completed four renewable energy projects in Caribbean islands: Cuba, the Bahamas, Barbados, and Saint Vincent and the Grenadines.

A local renewable energy engineer gave us a practical view of the collaboration, “Masdar manage the fund and the process but Caribbean countries work with them to design and implement renewable energy projects.”

“Masdar manage the fund and the process but Caribbean countries work with them to design and implement renewable energy projects.”

Renewable energy engineer, Caribbean

Asked about potential challenges the same sources continues, “We haven’t really faced any serious challenges so far but some difficulties have arisen: for non-English speaking islands language is a barrier, the time difference doesn’t make it easier and the legal jurisdiction of the contracts are a matter for debate, especially in markets where laws are different from the rest of the Caribbean Community (CARICOM) territories.”

It is also interesting to note that the UAE has chosen to work directly with the individual countries, side-stepping the Caribbean Development Bank (CDB). A local politician comments, “Most aid bodies choose to work through the CDB but in this case everything is being managed by the UAE. In this case, there isn’t really any independent body taking on the implementation, which isn’t necessarily a bad thing as it enables us to move faster by negotiating directly with the funder.”

An engineering consultant with experience and knowledge of the initiative sees benefits and limitations, “This is grant funding, not a loan like we see from the Chinese. They don’t insist that the EPC contractor must be from the UAE but the financial and experience criteria make it difficult for local firms to compete. This is because there are not many renewable projects in the Caribbean for firms to have developed their experience.”

“Most countries have proposed that the appointed EPC contractor works with local firms to facilitate knowledge transfer and training of local labour.”

Engineering consultant, Caribbean

Local governments accept this but many have sought to ensure local firms and labour can benefit, the consultant continues, “Most countries have proposed that the appointed EPC contractor works with local firms to facilitate knowledge transfer and training of local labour. Even the technical government teams have developed significant on the job experience, learning from the UAE, for example in how to manage the tender process and how documents are developed and so on.”

There is no such thing as a free lunch, the adage goes, but this initiative is about as close as it gets, according to the consultant, “There are no geopolitical concerns around this funding, perhaps it should be analysed more closely but it is critical to build renewable energy capacity in the region. To date, there have been no asks from the UAE government but the relationship is still fairly new and is evolving. It is up to the countries to ensure all safeguards are in place.”


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