Green Climate Fund and IDB Drive Geothermal Transformation Across the Eastern Caribbean

Sustainable Energy Facility for the Eastern Caribbean: Unlocking Geothermal Power for Island Nations

In a bold step toward achieving energy independence and climate resilience, the Green Climate Fund(GCF), in partnership with the Inter-American Development Bank (IDB), is spearheading a regional geothermal revolution across the Eastern Caribbean. The Sustainable Energy Facility for the Eastern Caribbean (FP020) is not just a clean energy project—it’s a blueprint for how small island developing states (SIDS) can transition from fossil fuel dependency to sustainable, homegrown power.

A Regional Vision for Energy Transformation

Approved by the GCF Board in October 2016, this multi-country initiative spans Dominica, Grenada, Saint Kitts & Nevis, Saint Lucia, and Saint Vincent & the Grenadines—five nations bound by geography, vulnerability, and a shared goal of energy security. Collectively, these islands have long relied on imported liquid fuels to generate electricity, resulting in high costs, volatile prices, and increased exposure to global supply chain disruptions.

Geothermal Energy (GE) represents the largest untapped renewable energy resource across the region. Beneath the Caribbean’s volcanic crust lies a wealth of geothermal potential capable of providing low-cost, reliable, and climate-friendly electricity—if only the financial and technical barriers could be overcome.

Breaking Barriers, Building Resilience

The biggest challenge to geothermal development in the Caribbean has always been risk and capital access. The early stages of geothermal exploration are notoriously uncertain and expensive, often scaring off private investors. Additionally, the lack of robust regulatory frameworks and limited technical capacity has hampered project progress.

The Sustainable Energy Facility is designed to change that. Through a powerful mix of concessional loans, reimbursable grants, and capacity-building programs, the initiative directly targets these barriers. The result? A pathway to unlock geothermal investments by reducing early-stage risks and empowering local institutions to take the lead.

The programme’s total investment value stands at USD 192.4 million, of which GCF contributes USD 80 million—including USD 60 million in loans and USD 20 million in grants. The rest comes from co-financiers such as IDB and various regional partners, demonstrating a united front for climate action.

Tangible Impact and Climate Gains

Once fully implemented, the project aims to deliver greenhouse gas (GHG) emission reductions of 9.4 million tonnes of CO₂ equivalent over its lifespan. This is a remarkable milestone for a region that has historically been among the most climate-vulnerable areas on the planet.

Beyond emissions, the impact extends to strengthening institutions, enhancing technical skills, and modernizing regulatory environments—laying the groundwork for a future Caribbean energy market that is cleaner, smarter, and locally driven.

Milestones and Progress

Since its implementation began in August 2019, the project has recorded multiple disbursements totaling over USD 45 million to date. These funds have gone toward critical exploration and institutional strengthening activities across the five participating countries. With completion targeted for August 2027, the programme continues to gather momentum—supported by IDB’s technical expertise and GCF’s long-term financial backing.

A Beacon for Island Resilience

The Sustainable Energy Facility for the Eastern Caribbean is more than a renewable energy project—it’s a demonstration of collective willpower, innovation, and resilience. By turning natural geothermal heat into a source of stability, these island nations are showing the world what sustainable progress looks like when global cooperation meets local ambition.

As the world races toward net-zero, the Caribbean stands tall—proving that even small islands can lead the charge in reimagining the global energy future.

Source: Climate Friendly

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