4th Growth and Resilience Dialogue with Social Partners Presentation

Eastern Caribbean Central Bank

REGIONAL TRANSFORMATION THROUGH INNOVATION

Timothy N. J. Antoine 4th Growth and Resilience Dialogue 13 February 2020

Eastern Caribbean Central Bank Development History of the

ECCU Member Countries

Pure Plantation

16 00

Economic Institution of Slavery, where slaves were capital. Golden age of sugar. Profits were expatriated.

18 38

Plantation Economy Modified Slaves were freed resulting in a labour shortage, indentured labourers or servants were introduced. Small farmers (ex-slaves) growing crops for subsistence this was the development of peasantry. 1846 Sugar Duties Act – this United Kingdom legislation equalised import duties on sugar with a devastating impact on the plantocracy.

19 38

New Staples and Industrial “Invitation”

Entry of Multinational Corporations who continued to expatriate profits and exploit workers.

19 58

Start of Regional Integration and Decolonisation Localisation of decision making. Indigenisation of enterprises. More state involvement in the provision of infrastructure and services - resulting in a de- emphasised private sector. Thought to be overpopulated for the level of output.

New sectors were developed in the region, like manufacturing.

Source: Meade & Abraham (2020).

1973 Treaty of Chaguaramas 1974 Grenada Independence

Green Gold and Commodity Producing Era Period of unilateral trade concessions or preferential trade agreements. Major exports of the Windward Islands were bananas, cocoa, nutmeg and other spices, root crops, fruits and hot peppers. Preferential access to the EU market under the Lomé Convention was the driving force for the development of banana exports.

19 75

Eastern Caribbean Central Bank

Establishment of the Lomé Convention

1975

1978 Dominica Independence

1979 Saint Lucia and St Vincent and the Grenadines Independence

19 80

Shift to service economies

Drive to diversify economies.

Treaty of Basseterre Antigua and Barbuda Independence

1981

PASSPORT

1983 The Eastern Caribbean Central Bank Agreement St Kitts and Nevis Independence

1984

World’s very first Citizenship by Investment Programme in St Kitts and Nevis

20 Modern ECCU

Source: Meade & Abraham (2020).

Eastern Caribbean Central Bank

Roadmap

Digital Currency

The Case for Structural Reforms

5

Key Messages

3

4

1

2

Renewable Energy

Growth Prospects for the ECCU

Eastern Caribbean Central Bank Key Messages Socio-economic 1

transformation is a necessity for shared prosperity.

The acceleration of structural reforms is essential.

2

Socio-economic transformation is partnership endeavour.

3

a

Eastern Caribbean Central Bank Key Messages Growth Prosp ct for the ECCU

ECCU Real GDP Growth Rates

Message 1

0.0 2.0 4.0 6.0 8.0

6.3

5.5

5.3

Target (5%)

3.8

3.9 3.2 3.3

3.2

2.7

2.4

2.0

Message 2 0.8

1.1

0.5

%

(0.1)

(8.0) (6.0) (4.0) (2.0)

(2.5)

(6.0)

Message 3

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020P

2021P

Sources: ECCU CSOs; and ECCB.

Eastern Caribbean Central Bank The Case for Structural Reforms

Potential Growth Gains from Reforms

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

3.7

Lower Debt

2.7

Better Business Climate

2.4

Disaster Cost Reduction

2.3

2.1

1.9

2.0

Greater Human Capital Development Lower NPLs

1.1

Percentage Points

Less Crime

Deeper Trade Integration

AIA ATG DMA GDA MSR KNA LCA VCT

Source: Hodge, Martin & Abraham (2020).

Eastern Caribbean Central Bank Renewable Energy Installed Capacity for Renewables, 2018

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

 

MW

AIA ATG DMA GDA KNA LCA VCT

Source: International Renewable Energy Agency.

Eastern Caribbean Central Bank

Enhancing Digital Finance - DXCD

A secure, accessible, innovative, real time payment

instrument in the Eastern Caribbean Currency Union

ECCB Digital Currency

Eastern Caribbean Central Bank

DXCD

DXCD… PAYMENTS MADE EASIER

A secure, s imple, accessible, fast payment channel

3 SIMPLE STEPS IN MAKING A DXCD PAYMENT

Real time Payment Settlement & Confirmation

Access DXCD

Make a Payment

• Using your smart device, download the DXCD digital wallet from the Google Play and Apple App stores. Select a participating financial institution or service provider to gain access to the DXCD network. • Use physical cash or make an online request for funds from your deposit account held with your financial institution to load your DXCD digital wallet.

• The payment is deducted from your wallet balance and credited to the merchant's wallet balance. • Within seconds, you and the merchant receive automated visual and email notifications of a successful payment. Your DXCD balance and that of the merchant are updated in real time.

• Using your smart device, scan, pay and confirm payment for goods and services.

• Send money to family, friends and merchants within the ECCU at no cost • Maintain direct access to personal digital financial records via your phone • New opportunities to create and maximise wealth

Eastern Caribbean Central Bank

- 50%

CASH

- 80%

CHEQUES

+ 50%

+ 40%

of DXCD

+ 60%

ELECT. PYMTS.

FUTURE PICTURE

Acquires % decreases in cash & cheques

Unscientific illustration of potential payment system shifts after five-year mass deployment

Eastern Caribbean Central Bank

THANK YOU

Eastern Caribbean Central Bank

Credits

1. Lightbulb image by PIRO4D from Pixabay 2. Growth image by Nattanan Kanchanaprat from Pixabay 3. Renewable energy image by seagul from Pixabay 4. Windmill icon from ICONSDB under CC0 1.0 Universal (CC0 1.0) Public Domain Dedication 5. Tree image by Gerd Altmann from Pixabay

Digital Economy Transformation

Session 1

Leveraging the Digital Economy for Growth and Competitiveness in the ECCU Moderator: Timothy N.J. Antoine, Governor, ECCB

anellists: • Dr Boutheina Guermazi, Director of Digital Development Department, The World Bank • Hon. Camillo Gonsalves, Minister for Finance, Saint Vincent and the Grenadines • Richard St John, Vice President - Sales & Marketing, Cizmic Consulting Inc • Cheryl Hector- Fontenelle, Director of Economics and Finance, ECTEL

Regional Transformation Through Innovation

4 TH

Regional Transformation Through Innovation

Dr Boutheina Guermazi

‘The Digital Economy: Opportunities for Economic Growth and Shared Prosperity’

Dr Guermazi is the Director of Digital Development (DD) of the Infrastructure Practice Group at The World Bank. She heads a global team working on building digital economies in developing countries, to drive shared prosperity and reduced poverty.

www.eccb-centralbank.org

February 13, 2020

The Digital Economy: Opportunities for Economic Growth and Shared Prosperity

Boutheina Guermazi, Director, Digital Development Global Practice

1

Digital is bending the arc of development

Digital Educatio n

Smart Energ y

Inclusive Growth

Digital Transpor t

Digital Citizen

Smart Agri

Jobs

DIGITAL ECONOMY

E- commerce

Digital Health

Digital Private Sector

Digital Government

Competitive Economy

Digital Entrepreneu r

Digital Platform s

Digital Financ e

Digital Cultur e

Industry 4.0

Digital Infrastructur e

Digital Skills

Efficiency

2

With stronger contribution to the SDGs

Big Data

Artificial Intelligence

Blockchain

IoT

(Source: Project Breakthrough, UN Global Compact, 2017)

Yet,“shared prosperity” is not automatic

➢ Digitalization has a multifaceted relationship with (in)equality.

➢ Digital technology can be excellent equalizer withsignificant promises for development.

➢ Yet significant digital divides exist today that deepen inequalities of outcome; inequality of opportunities; and inequality of impact.

4

Eastern Caribbean: opportunities are large

Region First

Quality of life Ease of business

Single Market

A common currency, common education system, harmonized telecom sector regulation.

The physical challenge

Digital government services save citizen time, effort and money (particularly those in rural areas or smaller islands).

A digital economy is an easier economy to do business.

of space, terrain, and physical connectivity between islands can be made redundant in the digital era.

5

The need for an ecosystem approach to maximize the benefits

Digital Economy Foundations

6

(Source: World Bank Group)

The need for an ecosystem approach to maximize the benefits

EC: several bottlenecks exist, the voice ofstakeholders

Digital Infrastructure

Digital Financial Services

Digital Entrepreneurship

Digital Skills & Literacy

Digital Platforms

“Call me, don’t Whatsapp. I keep my data off unless I really need it – too expensive”

“Clearing something from the port requires me to take the whole day off from work.” “I know that online platforms can help my [tourism] business grow, but I don’t know how to use them and now I’m too old to learn.”

“It took me 9 months to open a commercial bank account and another 4 to get a credit card PoS, on which I pay 4.5% a transaction.”

“Ideas exist, but people don’t know how to build a business plan and pitch deck to get any funding.” “Legislation and regulation are restrictive for innovation in the digital space.”

“Students don’t see employment opportunities after studying technical courses.” “It’s a completely male dominated space – girls don’t think of ICT related careers.”

“How is the internet in Miami so fast?”

“I don’t think organizations

“How do you monetize a digital business model if you can’t pay online?”

even know how many times they get hacked”

From stakeholder consultations during project preparation

7

The need for an ecosystem approach to maximize the benefits

Digital Transformation Program: addressing the

bottlenecks, and unleashing the potential

➢ The program strengthens the foundations, while complementing ongoing national initiatives

Digital Infra, Platforms, and Services •Cross-Cutting Enablers •Specific citizen centric digital services

Digital Skills and Entrepreneurship

Digital Ecosystem • Telecommunications • Digital Financial Services • Cybersecurity • Data protection and privacy

•Digital Skills Development •Digitalization of Traditional Industries •Digital Entrepreneurship Support

8

While mitigating the risks

Greater the volume of data being created, stored, and shared, greater the concerns around privacy, data use and sharing, consent, ownership etc.

Data & Privacy

Cybersecurity

As critical infrastructures and assets become more digital, their security takes a cyber dimension – barely anything is “air- gapped” today

A common trend among successful digital companies is the size of their active user bases, and ensuring competition in the digital sphere can become a challenge

Competition

Safety & Content

The safety of vulnerable populations is a key concern.While the digital revolution expands access to markets and opportunities, it also exposes vulnerable groups to potential abuse

Exclusion

There is a risk of widening existing divides (gender, urban – rural, age, education levels) on account of a new digital divide

With rising climate disasters, digital infrastructure are more vulnerable and coordinated effort to improve connectivity resilience are needed through resilient investments (policies and technology).

Climate Change

9

EC: opportunity for greater coordination on infra resilience The importance of mitigating the risks

Ecosystem-wide impact of disruptions in connectivity

➢ Connectivity and digital tools are crucial in predicting weather events, broadcasting early warning, responding and recovering from such climatic events.

Climate Monitoring

Early Warning First Response

Recovery

Drones Sensors

GIS Maps Satellites “Air Fiber” BTS onWheels

➢ Strengthening the resilience of connectivity infrastructure takes an even higher significance.

➢ Resilience of the public sector is critical for economy- wide resilience in small island state contexts – A digital government is a more resilient government.

➢ The project has resilience at its core – enabling governments, citizens, and businesses to protect against and recover from climate and other external shocks.

10

Eastern Caribbean: Leveraging the “region first” approach

ECTEL

ECCB

OECS

CTU

IMPACS

11

Last but not least: it takes a mindset shift!

➢ Digital economy is eventually made by, and for, people, and this needs a digital mindset.

Accountable

Creative

Curious

Collaborative

Persistent

Inclusive

12

Thank you and let’s stay in touch.

Boutheina Guermazi Director, Digital Development Global Practice bguermazi@worldbank.org

13

4 TH

Regional Transformation Through Innovation

Honourable Camillo Gonsalves

‘Smart Government:How to make Government More Agile and Responsive’

The Honourable Camillo Gonsalves is the Minister for Finance, Economic Planning, Sustainable Development and Information Technology in the Government of Saint Vincent and the Grenadines and a member of the ECCB Monetary Council. Prior to this ministerial appointment, he served as Permanent Representative of Saint Vincent and the Grenadines to the United Nations and also as Minister of Foreign Affairs, Foreign Trade, Commerce and Information Technology.

www.eccb-centralbank.org

4 TH

Regional Transformation Through Innovation

Richard St. John

‘The Digital Economy: Perspectivesfrom the Private Sector’

Richard St John is Vice-President of Cizmic Consulting, Inc., a company that specialises in telecommunications development, management and consulting throughout the Caribbean and Latin America. He has spent his career working in the Caribbean in a variety of corporate and entrepreneurial roles including 20 years of telecommunications industry experience.

www.eccb-centralbank.org

DIGITAL ECONOMY Private Sector Perspective

D i g i t a l E c o n o m y i n t h e E C C U

Key Private Sector Trends

Implementation of Digital Currency

Push to Paperless Operations

Reduction in Regulatory Barriers

Improvements in Power & Broadband Infrastructure

S t . K i t t s

D i g i t a l C u r r e n c y

Launch and Implementation

Beginning this year, the DXCD will be rolled out across the ECCU (6 mo. pilot then eventual full deployment). This technology will likely have impacts across a variety of areas

FRAUD REDUCTION

FINANCIAL INCLUSION

TECHNOLOGICAL EFFICIENCY

DXCD is supported by Distributed Ledger technology which adds a

DXCD will reduce the friction involved in the current payment ecosystem. Providing a payment alternative to existing slow payment instruments while also reducing the cost associated with transporting, storing, and securing traditional cash.

DXCD will facilitate cross-border transactions and allow for greater level of financial participation among the region’s unbanked population.

degree of traceability to all transactions conducted in

DXCDs. This will offer a means of reducing illicit financial activity (e.g. tax evasion, trafficking, laundering)

CASE STUDY – GHANA

D i g i t a l C u r r e n c y

DXCD digital currency will spur on the use of digital wallets as previously underserved communities gain access. Increase in Digital Wallets

130% mobile penetration (2016)

Transaction Modes Served – B2B – B2C Possible Future Transaction Modes – B2G – C2B – C2C – C2G

44% of population has active digital wallet accounts (2018)

Significant fraction of digital wallet holders do not have traditional bank accounts High volume of urban-to-rural intra-country transactions Total value of mobile money transactions (2018): US$45.6b GDP (2018): US$65.5b

Sources: Ghana NCA, Bank of Ghana, Worldbank, Zenith Bank Ghana

P a p e r l e s s E c o n o m y

Reduction in Paperwork & Increased Convenience Digital transformation will remain a key priority in the private sector where companies look to shift operations and processes typically done on paper into the digital realm. This is especially relevant in industries such as telecommunication, finance, & insurance where increasing competition and compliance requirements are driving companies to find ways to reduce costs, create innovative new products, and promote brand loyalty.

HEAL THCARE

TE LECOMMUN I CAT I ONS

F I NANCE & I NSURANCE

Case Study – Transformation in Insurance Industry Pape r l e s s E conomy

TRANSFORMATION AREAS

O p p o r t u n i t y

Customer Application process can be digitized by use of electronic forms, mobile apps and digital photos to record assets to be protected

Race to Transform

The reduction in paperwork and staff requirements can lead to reduction in cost and increase in efficiency. This will result in greater profits as well as potentially lower premiums.

Payment process can be digitized through use of mobile apps or even digital currencies

Insurance companies that transform first gain a competitive advantage that can result in increased market share and profitability

Claims process can be digitized by using smart phones to take photos of asset damage or loss. Reimbursement can be done in a digital medium similar to the “payment process”

P a p e r l e s s E c o n o m y

Digital Claims Assessment

AI-based systems are being used for automobile damage assessments to streamline the claims process

1

2

3

Upload Image

Assess Damage

Resolve Claim

EXAMPLES

G o v e r n m e n t R e g u l a t i o n

Digital-Friendly Policies & Posture

Governments will need to recognizing the importance of digital transformation and, to a large part, allow the private sector to digitize the economy in order to realize the potential economic benefits

LEGISLATION

EDUCATUON

VISION

Government establishing bold visions of a “cashless”, “paperless” economy by 2025

Unified and consistent electronic commerce legislation.

Training made available to those who are intimidated by technology

Resilience, Reliability, Availability P o w e r & B r o a d b a n d I n f r a s t r u c t u r e

Utilities and operators will face increased pressure from stakeholders to bolster their infrastructure in support of stakeholders’ increasingly power and data-hungry operations.

Key Areas

Electrical power available for phones, computers, cell sites, and data switches

1

Ubiquitous and affordable internet access for all

2

Note: Image is representative of what typical AI drone would see .

P o w e r & B r o a d b a n d I n f r a s t r u c t u r e

Case Study – FPL Florida Power & Light (FPL) in the USA has invested in AI, sensors, analytics, and drones to help pinpoint outages and make repair decisions.

GOOD : 99%

GOOD : 99%

FPL’s technology investments have led to demonstrable benefits:

Reduction in Downtime FPL restored power in 10 days after hurricane Irma [cat. 4] in 2017 compared to 18 days after hurricane Wilma [cat. 3] in 2005 Reduction in Outages FPL’s investment in auto-healing switches prevented 546,000 outages during hurricane Irma

DISCONNECTED: 99%

Drones fitted with computer vision AI are being trained to recognize equipment issues

C o n t a c t I n f o r m a t i o n

Richard St. John VP Sales & Marketing

www.cizmicconsulting.com

18503 Pines Blvd, Ste 211, Pembroke Pines, FL, 33029

954 330 1047

4 TH

Regional Transformation Through Innovation

Cheryl Hector Fontenelle

‘The Digital Economy: Creating and Regulating a Single ICT Space in the ECCU’

Cheryl Hector Fontenelle is the Director of Economics and Finance at the Eastern Caribbean Telecommunications Authority (ECTEL). She is responsible for the development and implementation of the regulatory frameworks for access and interconnection, retail tariff, consumer protection and universal service and access in the ECTEL member states. She has more than 12 years progressive experience in telecommunications and ICT regulation.

www.eccb-centralbank.org

Session 2

Renewable Energy Transformation

Leveraging Renewable Energy: Technology and Financing Opportunities for the ECCU Moderator: Daniel Arthurton, Entrepreneurship and Agricultural Consultant

anellists: • Stephanie Gill, Practice Manager, Energy Global Practice, World Bank • Vermuelen Floris, Representative for the Eastern Caribbean, European Investment Bank • H.E. Dr Vince Henderson LPD, Ambassador of the Commonwealth of Dominica to the United States • Dr James Fletcher, Managing Director, Soloricon Ltd

Regional Transformation Through Innovation

4 TH

Regional Transformation Through Innovation

Stephanie Gil

‘An overview of Renewable Energy in the ECCU’

Stephanie Gil is Practice Manager for Latin America and the Caribbean in the Energy and Extractives Global Practice at The World Bank. She leads The World Bank energy sector engagements, including regulatory reforms, disruptive technologies, new financing architecture and other operations in the region. She has extensive experience in power utilities, competitive power and gas markets, and energy sector reforms.

www.eccb-centralbank.org

SCALING UP A CLEAN ENERGY TRANSITION IN THE CARIBBEAN

Stephanie Gil, Practice Manager, Energy for Latin America and the Caribbean

Prepared by: Koffi Ekouevi, Senior Energy Economist

Maria Vagliasindi, Lead Energy Economist Neha Mukhi, Senior Climate Change Specialist Rafael Ben, Energy Specialist

The opportunity of scaling up clean energy in the Caribbean.

 Expensive imports of fuel for electricity generation impose a drain on hard currency reserves, increase the cost of doing business, erode competitiveness and limit economic growth.  Given abundant resources, renewable energy has rightly been identified as a solution towards sustainability and resilience as well as growth in jobs and economy.  Energy efficiency presents ample savings opportunity for residential and commercial consumers, as well as for municipalities (buildings incl. schools and hospitals, street lighting, water utilities) and industry. Consumer-side energy efficiency measures could save 12% to 25% of current electricity use, equivalent to over US$5 million savings per year.  Progress has already been made in setting the stage for a clean energy transition. Scaling up renewable energy and energy efficiency in the region can be achieved through a robust legal, regulatory, normative framework and implementation of sustainable financing mechanisms.

With electricity generation still dominated by imported fossil fuels, tariffs are amongst the highest globally.

Consumption by Sector (%)

7.0%

3.1%

3.4%

6.6%

100%

7.9%

7.5%

9.3%

2.0%

1.2%

80%

2.4%

5.2%

1.8%

60%

46.0%

52.2%

45.2%

Energy Mix (%)

49.2%

0.1%

1.0%

1.2%

40%

0.3%

100%

0.2%

16.0%

1.0%

20%

80%

34.8%

40.5%

45.0%

29.7%

27.4%

60%

0%

99.9%

Dominica (2015)

Grenada (2015)

St. Lucia (2015)

St. Vincent & the Grenadines (2016)

82.8%

98.8%

71.4%

40%

Residential

Commercial

Industrial

Street Lighting Hotels Losses Other

20%

Electricity Tariffs (US$/kWh)

0%

Dominica (2015)

Grenada (2015)

St. Lucia (2015)

St. Vincent & the Grenadines (2016)

0.50

0.47

0.47

0.44

0.43

Diesel

Hydro Wind Solar

0.38

0.40

0.34

0.30

0.26

0.23

0.23

0.22

0.21

0.20 US$/kWh

0.17

0.10

0.00

Dominica (2017)

Grenada (2015)

St. Lucia (2015)

St. Vincent & the Grenadines (2017)

Residential

Commercial

Industrial

Expensive imports of fuel for electricity generation impose a drain on hard currency reserves, increase the cost of doing business, erode competitiveness and limit economic growth.

Grenada

Saint Lucia

Saint Vincent & Grenadines

Dominica

Given abundant resources, renewable energy has rightly been identified as a solution towards sustainability and resilience as well as growth in jobs and the economy.

Solar Photo-Voltaic (PV) competitive with fossil fuel with prices between 1.7-4.5$/kWh

Solar PV + storage (*) Power Purchase Agreement (PPA) prices between 1.9-8$/kWh

(*) The size of the bubble indicates storage capacity of the plant (MWh). (**) Nevada has lowest PPA at 2.3$/kWh, storage capacity to be confirmed.

In comparison to above PPA prices reached through competitive selection, in 2019 Bangladesh achieved a price of 10$c/kWh through bilateral negotiations and Vietnam achieved a price of 9.35$c/kWh through Feed-in-Tariffs (FiT).

Energy efficiency presents ample savings opportunity for residential and commercial consumers, as well as for municipalities (buildings, street lighting, water utilities) and industry.

Electricity consumption in Caribbean Hotels by End Use

Savings, share of different appliances in 2030 (%)

100%

80%

60%

40%

20%

0%

Dominica

Grenada

St. Lucia

St. Vincent & the Grenadines

Lighting

Residential Refrigerators Air Conditioners

Distribution Transformers Industrial Electric Motors

Savings potential calculated based on the assumption that Minimum Energy Performance Standards are implemented in 2020 at a level derived from the United For Efficiency Model.

Consumer-side energy efficiency measures could save 12% to 25% of current electricity use, equivalent to an estimated over US$5 million savings per year.

Scope:

Distribution transformers

refrigerators

lighting

Air conditioners Electric motors

Annual savings in 2030 Dominica

Grenada

Saint Lucia

Saint Vincent and the Grenadines

Electricity savings (as % of current electricity use)*

24 GWh (24.8%)

25 GWh (12.8%)

71 GWh (23.9%)

24 GWh (24.3%)

Value of saved electricity (US$)**

$5.5 million

$10.5 million

$ 24.1 million

$5.0 million

Number of power plants avoided

1 power plant (5 MW)

1 power plant (5 MW)

3 power plants (15 MW total)

1 power plant (5 MW)

CO2 reductions (tCO2)

19,000

19,000

55,000

19,000

*Savings potential calculated based on the assumption that Minimum Energy Performance Standards are implemented in 2020 at a level derived from the United For Efficiency Model Regulation Guidelines ** Calculated based on current residential tariffs levels.

Progress has already been made in setting the stage for a clean energy transition.

Dominica

Grenada

St Lucia

St Vincent and the Grenadines

RE potential (MW)

Solar (45), wind (30), geothermal (300), hydro (17)

Solar (50), wind (20) and geothermal (50)

Solar (36), wind (40) and geothermal (30)

Solar (23), wind (8), geothermal (100), hydro (10)

RE targets

100% by 2020

100% by 2030

35% by 2022

60% by 2020

RE Legal, regulatory, institutional framework

DOMLEC - vertically integrated private concessionaire IPP allowed but none as of end 2019. Dominica’s generation expansion strategy focuses on geothermal development. Secured funding from UK DFID and the World Bank for construction of a 7 MW geothermal plant

GRENLEC – private utility with exclusive generation license

LUCELEC – vertically-integrated PPP IPP allowed for RE generation National Energy Transition Strategy (NETS) (2017) LUCELEC delivered 3MW solar farm in Vieux Fort in 2018.

VINLEC – public vertically-integrated utility IPP allowed but none as of end 2019

RE Investments already completed/ under way - Utility scale RE - Decentralized RE - Smart grids, reinforcement - Energy storage

(GRENLEC) plans to spend US$150 million to implement RE project, with focus on geothermal. In 2016, The Renewable Energy for Rural Development Project was launched to provide installation of 24 off-grid + storage systems and 4 on-grid solar PV systems Potential annual savings in 2030 (as % of current electricity use): 25 GWh (12.8%) NDC: 20% of the 2025 30% ER target comes from EE improvements in electricity use, of which building retrofits (20% reduction), building codes (30% reduction), EE in hotels (20%)

VINLEC developing first solar battery storage microgrid located on the island of Mayreau in the Grenadines Several small grid-connected residential and commercial solar PV systems. Geothermal: Drilling of four wells started in 2019 and 10 MW project expected to be commissioned in 2023. Potential annual savings in 2030 (as % of current electricity use): 24 GWh (24.3%) NDC: 15% reduction in electricity consumption by 2025 compared to BaU (focus: retrofit of streetlights, new building code, labelling of appliances) CDF has provided highly concessional finance to the transportation sector in SVG

Emphasis on solar energy.

EE - Potential - Existence of policy, targets, norms - ESCOs and other financing mechanisms

Potential annual savings in 2030 (as % of current electricity use): 24 GWh (24.8%)

Potential annual savings in 2030 (as % of current electricity use): 71 GWh (23.9%) NDC: not specified EE target (Energy report card mentions 20% EE target by 2020)

NDC indicator (EE target): 5.2 Gg

(of which LED Streetlights in Portsmouth: 0.36 Gg)

CDB Street Lighting Retrofit funding

CDF (USD 33 million) has provided grants to the tourism (hotels),

Scaling up renewable energy and energy efficiency can be achieved through a shared legal, regulatory, normative framework and implementation of sustainable financing mechanisms.

ASPIRE Program in Maldives

Scaling Solar program

Financing mechanisms for Energy Efficiency

•

Series of IDA Guarantees combined with grants to attract private sector into new RE For 20 MW, estimated savings of US$28- 84 million (depending on diesel price) and US$42 million of private investments mobilized Technical assistance to create enabling framework and develop pipeline Security package incl. IDA Guarantees to backstop (i) payment delays under PPAs; and (ii) termination caused by GoM Phased approach to expand on multiple islands. Design of competitive tender process

•

Scale up and accelerate investment in utility-scale solar generation World Bank Group one-stop shop for preparation, tendering and financing

• Utility demand side management programs

•

Utility consumer financing programs

•

• Dedicated credit lines for EE projects

•

Benefits to countries and developer/investors

• ESCOs: Leveraging of commercial financing through performance contracting

•

Reduced development time and costs

•

• Revolving EE funds

•

Market creation

•

• For residential, commercial, industrial consumers

•

Leverage

•

•

India: 750MW PPP, US$5.5c/kWh

• For public buildings, street lighting, utilities

•

Senegal: 60MW, US$4c/kWh

•

Replicating models that allow scaling up of resources

• Pooling of resources: Caribbean Catastrophe Risk Insurance Facility • Revolving funds to support both renewable energy and energy efficiency • Offer of instruments and products to serve public and private users

The World Bank Group stands ready to share its global experience and support your Governments in achieving their clean energy ambitions.

ANNEX

1.DOMINICA 2.GRENADA 3.ST. LUCIA 4.ST. VINCENT AND THE GRENADINES

DOMINICA

Dominica Overview of Electricity Generation and Policy Environment

Installed Capacity and Potential 1

Overview of Generation Expansion Plan 3, 4

Total Installed Capacity (2018)

27.5 MW 20.1 MW 0.21 MW 6.60 MW 0.63 MW 392 MW 30 MW 45 MW 300 MW

Dominica’s generation expansion strategy focuses on geothermal development. The island has high geothermal potential, estimates ranging from 300 MW - 1,390 MW.  The island is expected to develop more than 100 MW of geothermal power; funding for early-stage has been secured through the World Bank’s Geothermal Development Plan.  The first 7 MW geothermal plant is expected to be commissioned by the first quarter of 2021.

Diesel - ADO (utility-owned)

Wind

Hydro (utility-owned)*

Solar

Renewable Energy Potential

Wind Solar

Renewable Energy Support Mechanisms 5,6

Geothermal

Hydro

17 MW

Energy Policy and Energy Action Plan

Drafted

●

Biomass

-

✔ ️ ✔ ️ ✔ ️

Independent electricity regulator

Independent Regulatory Commission – established 2006

Renewable Energy Target

100% by 2020

Net metering/net billing

Available

Interconnection policy/standards

Standards set



Feed-in-tariff

Not available

Independent power production

Allowed, but no IPPs as of 2019

●

Notes: *Includes three hydro plants with capacity of 1.3 MW, 1.8 MW, and 3.5 MW



Resource mapping

No detailed resource mapping available

Dominica Renewable Integration: Plans, Investments and Opportunities

Grid-Connected Small- and Large-Scale Renewables

Transmission and Distribution Losses (2017) 1

9%

Updated information on plans and investment opportunities for small- and large-scale not available.

Grid strengthening and modernization for renewable integration

No renewable integration studies completed recently.

Renewable Energy Projects in the Pipeline

Project Type

Capacity

Details

Dominica secured funding from UK DFID and the World Bank for construction of a geothermal plant.

Geothermal 2,3

7 MW

GRENADA

Grenada Overview of Electricity Generation and Policy Environment

Installed Capacity and Potential 1, 2

Overview of Generation Expansion Plan 3 Grenada Electricity Services Limited (GRENLEC) plans to spend US$150 million to implement renewable energy projects over the next several years. There are two geothermal plants currently being explored, which could meet nearly all of the island’s electricity needs.

Total Installed Capacity

51.2 MW 48.7 MW 0.16 MW 2.36 MW

Diesel - ADO (utility-owned)

Wind

Solar*

Renewable Energy Potential

120.5 MW

Wind Solar

20 MW 50 MW 50 MW 0.5 MW

Geothermal

Renewable Energy Support Mechanisms 4

Hydro

Biomass

-

Energy Policy and Energy Action Plan

Finalized

✔ ️ ✔ ️ ✔ ️ ✔ ️

Renewable Energy Target

100% by 2030

Independent electricity regulator

Public Utilities Regulatory Commission – established 2016

Net metering/net billing

Available

Interconnection policy/standards

Standards set



Feed-in-tariff

Not available

Notes: *Includes multiple large and small (rooftop) grid connected utility-owned solar



Independent power production

Utility has exclusive generation license



Resource mapping

No detailed resource mapping available

Grenada Renewable Integration: Plans, Investments and Opportunities

Grid-Connected Small- and Large-Scale Renewables 1

Transmission and Distribution Losses (2017) 2

8.1%

No concrete plans for significant renewable integration: According to NREL (2015), the Electricity Supply Act has not been updated to allow or address issues related to self-generation and distributed renewable energy. Although GRENLEC has interest in utility-scale renewable generation, current developments are not meeting Grenada’s renewable energy targets.

Grid strengthening and modernization for renewable integration

No renewable integration studies completed recently.

Renewable Energy Projects in the Pipeline

Project Type

Capacity

Details

In 2016, The Renewable Energy for Rural Development Project was launched to provide installation of 24 off-grid + storage systems and 4 grid-tied solar PV systems to single parent households, the elderly, and small agro-processors in rural communities without access to electricity.

Updated information on plans and investment opportunities for small- and large-scale not available.

Off-grid + on- grid solar + storage 3

Info not available

ST. LUCIA

St. Lucia Overview of Electricity Generation and Policy Environment

Installed Capacity and Potential 1

Overview of Generation Expansion Plan 2 According to St. Lucia’s National Energy Transition Strategy (NETS) and Integrated Resource Plan (2017), the expansion scenario that will offer the greatest economic benefit by 2025 is:

Total Installed Capacity

91.4 MW 88.4 MW

Diesel (utility-owned) Solar (utility-owned)

3 MW

• Solar : up to 31 MW

Renewable Energy Potential

106 MW 40 MW 36 MW 30 MW

• Wind (utility-owned): 12 MW

Wind Solar

• Storage : 14 MWh of (providing a maximum of 42 MW of instantaneous power)

• Energy efficiency : displacing 11% of current load

Geothermal

Hydro

- -

The analysis shows that scenarios with highest level of utility ownership lead to lowest electricity tariffs.

Biomass

Renewable Energy Target

35% by 2022

Renewable Energy Support Mechanisms 3

✔ ️ ✔ ️ ✔ ️ ✔ ️

Energy Policy and Energy Action Plan

Finalized

National Utilities Regulatory Commission (NURC) – established in 2016

Independent electricity regulator

Net metering/net billing

Available

Interconnection policy/standards

Standards set



Feed-in-tariff

Not available

●

Independent power production

Allowed only for renewable generation

✔

Resource mapping

RMI completed an Integrated Resource Plan in

St. Lucia Renewable Integration: Plans, Investments and Opportunities

Grid-Connected Small- and Large-Scale Renewables

Transmission and Distribution Losses 2

6.3%

National Energy Transition Strategy (NETS) (2017) 1

Grid strengthening and modernization for renewable integration

Emphasis on solar energy: Most cost-effective plan for meeting electricity demand is solar; total installed capacity of 20 MW until 2025 is expected to lead to a system levelized cost of electricity (LCOE) reduction of approximately 7%. IPP vs. utility ownership: The Integrated Resource Plan (IRP) emphasizes the challenges of integrating IPPs. The NETS notes that IPPs will ‘lead to redundant [generation] assets’ and ‘additional infrastructure requirement’ leading to increased capital, operation, and maintenance costs. The NETS states that ‘future policy directives should be focused on utility ownership, only enabling IPPs in cases where the latter adds more value and less risk to the system, such as in highly specialized ventures such as geothermal.’ Small distributed generation: The utility piloted a net-metering program in 2009; according to the NETS, there is a need for further study to determine appropriate compensation and caps for self- generation.

National Energy Transition Strategy (NETS) (2017) 3

 Results of a renewable energy integration study in the NETS revealed that after reaching a total of 20 MW of solar (including both utility-owned and distributed solar), new renewable investments will require additional energy storage via batteries to maintain system stability.  The grid study also showed that even high levels of distributed generation do not require infrastructure upgrades in the coming ten years if battery storage is strategically installed.

Renewable Energy Projects in the Pipeline

Resource

Capacity

Project

World Bank funded geothermal projects are currently in exploration Phase.

Geothermal

N/A

ST. VINCENT AND THE GRENADINES

St. Vincent and the Grenadines Overview of Electricity Generation and Policy Environment

Installed Capacity and Potential 1,2

Overview of Generation Expansion Plan

Total Installed Capacity

40.3 MW 33.2 MW 1.4 MW 0.5 MW 0.9 MW 5.7 MW

St. Vincent and Grenadines’ National Energy Transition Strategy (NETS) and Integrated Resource Plan was developed by RMI in 2017.  Details on expansion plan forthcoming

Diesel (utility-owned)

Solar Total

Solar (on-grid customer owned)

Solar (utility-owned)

Hydro (utility-owned)

Renewable Energy Potential

141 - 931 MW

Wind Solar

8 MW

23 MW

Geothermal

100 - 890 MW

Hydro

10 MW

Renewable Energy Support Mechanisms 3, 4

Biomass

-

Energy Policy and Energy Action Plan

Finalized

✔ ️

Renewable Energy Target

60% by 2020



Independent electricity regulator

No independent regulator

Net metering/net billing

Available

✔ ️

Interconnection policy/standards

Standard development in progress

●

Feed-in-tariff

Available

✔ ️

Independent power production

Allowed, but no IPPs as of 2019

●

Resource mapping

RMI completed an Integrated Resource Plan in 2017 (document not publicly available)

●

St. Vincent and the Grenadines Renewable Integration: Plans, Investments and Opportunities

Transmission and Distribution Losses 2

7%

Grid-Connected Small- and Large-Scale Renewables 1

Geothermal potential and challenge : High-level renewable energy resource studies conducted by NREL in 2012 found high potential for geothermal, ranging from 100 – 890 MW. However, the study also identified the rugged topography and geohazards in the island as significant challenges in geothermal exploration, drilling, and construction. Small scale solar : there are several small grid-connected residential and commercial solar PV systems. These are supported by net billing and feed-in-tariff mechanisms. There is push to streamline net- billing regulations to further support small scale distributed generation.

Grid strengthening and modernization for renewable integration

Results from renewable integration study by RMI forthcoming.

Renewable Energy Projects in the Pipeline

Project Type

Capacity

Details

Drilling of four wells was started in 2019. The project is expected to be commissioned in 2023, after which SVG will meet 73% of its energy needs from renewable sources. VINLEC signed and EPC contract in 2017 for the utility’s first solar battery storage microgrid located on the island of Mayreau in the Grenadines.

Geothermal 3

10 MW

Updated information on plans and investment opportunities for small- and large-scale renewable forthcoming.

Solar + storage Microgrid 4

Info not available

PROGRAMS

Introducing ASPIRE: Accelerating Sustainable Private Investments in Renewable Energy

• Maldives SREP Investment Plan adopted in October 2012 • ASPIRE aims to scale up solar PV to 20MW • Key focus to attract private sector participation • World Bank approved in 2014 a series of IDA guarantees for US$ 16 million and a SREP grant for US$11.7 million • For 20 MW, estimated savings of US$28-84 million (depending on diesel price) and US$42 million of private investments mobilized • Initial project of up to 4MW tendered in two lots in 2015-2016. First 1.5MW project operation in 2018. Other donors also promote renewables in Maldives. For example: • ADP-led POISED also uses SREP and targets installations of 10MW solar diesel hybrid systems. • JICA through its JPY 1billion Project for Clean Energy Promotion installation 70kW in 2014 (led by Japanese solar panel company, Kyocera).

The World Bank provides financial structuring and guarantees to support private investments in renewable energy across the globe

Map of World Bank Guarantees Operations

Financing mobilized with guarantees

 $7.4 billion of guarantees issues  74 operations  43 countries

ASPIRE: Structure and Impact of Concessional Funding on the Project

1.Technical Assistance support to GoM (US$1.75 million) • Project management and implementation support • Pipeline development • Capacity building and knowledge sharing • Enabling private investment in PV (e.g. regulations)  Increase ability to plan and prepare renewable projects

2. Structuring and Delivery of Tariff Buy Down for subprojects (US$6 million)  Reduce tariffs and east renewable inclusion

3. Security Package (US$19.9 million) US$3.9 million of SREP + US$16 million of IDA guarantees to: (i) Backstop payment delays under PPAs; and (ii) Termination caused by GoM  Mitigate payment risk – a key risk identified under the market sounding exercise

DOMINICA: Leading the way on geothermal development

KEY FACTS: Typical small island economy challenged by low competitiveness & climate change

 750 sq. Km; 73,543 inhabitants:  Upper MIC: GDP = US$581.5 ml.  Low GDP growth ( 2.1% p.a . during 2000s), high debt, and limited fiscal space due to natural hazards, loss of preferential access to EU market and contraction of FDI  Second country globally most affected by weather-related events : losses from Hurricane Maria (2017) = 226% of GDP KEY ENERGY SECTOR STATISTICS: Small power system, heavily reliant on imported diesel

ENERGY SECTOR CHALLENGES  Build resilience in the face of natural disasters • Hydro affected by hydrology and extreme weather events • Network infrastructure mostly low voltage and very vulnerable to natural disasters

• Installed Capacity (2017)

26.7 MW

 Stabilize energy prices : average tariff = US$0.33/kWh

• Energy mix

75% diesel; 25% hydro

• Baseload needs

12 MW - accommodated by hydro and diesel

• Annual generation

111,903 MWh

 Private participation : small size/isolation impose natural monopoly

• Peak load

17 MW

• Access

98%; 36,467 customers, mostly residential

• Residential vs. non-residential consumption

50-50

 Donor coordination: crowded environment, varying quality of policy/technical support

• Historic consumption growth

2.5%

Institutional framework:  Power system is operated by single, vertically integrated private concessionaire, Dominica Electricity Services Limited (DOMLEC)

 Generation segment recently liberalized; DOMLEC exclusive T&D operator

 Dominica Geothermal Development Company (DGDC Ltd.)

TRANSFORMATIONAL OPPORTUNITY: GEOTHERMAL  100 MW of estimated potential at Wotten Waven-Laudat field; <500 MW theoretically  10-15% reduction in electricity tariffs  <80MW export demand from Martinique/Guadalupe; private sector interest

• Recently established private entity to own and operate Wotten Waven-Laudat geothermal field • 100% Government-owned • Special purpose vehicle to attract private partners into geothermal development