Flags Of Convenience: The Caribbean's Open Shipping Registries Carry A Heavy Cost

THE STAR BUSINESSWEEK OCTOBER 5, 2019

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FLAGS OF CONVENIENCE: THE CARIBBEAN’S OPEN SHIPPING REGISTRIES CARRY A HEAVY COST Signalling distress, sending a message, claiming allegiance – ships use flags for many reasons. In the Caribbean they are also used to bypass regulations, avoid taxes and encourage shipbreaking as unscrupulous vessel owners exploit loopholes in shipping registries and sail under flags of convenience.

BY CATHERINE MORRIS, STAR BUSINESSWEEK CORRESPONDENT

IN THIS EDITION OF

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Energy Financing: How renewables are attracting FDI The Caribbean’s dependence on fossil fuels may be bad news for the environment but it’s good news for energy investors as the region explores the lucrative possibilities of renewable energies.

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Continued on page 4

The New Battle for Taiwan It is rare that nations like Saint Lucia, St Kitts and Nevis or Haiti will find a decision made by their government today could trigger a chain of events leading to war tomorrow.

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Gadani, Pakistan — Rescue workers bring out a body from a burning vessel being broken down by workers armed with meagre hand tools (Source: MT Aces | White Star)

Taiwan night view

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DOMINICA’S RECOVERY FUELLED

BY SUCCESSFUL CIP

BY ED KENNEDY, STAR BUSINESSWEEK CORRESPONDENT

The reconstruction of Dominica post-Maria has been underwritten by the nation’s highly successful Citizenship by Investment Programme (Source: Unsplashed)

R

ecent times have seen many positives arise in Dominica as a direct result of the nation’s Citizenship

by Investment Programme and the revenue it has generated for disaster relief efforts. It is one of the oldest CIPs in the region, and indeed in the world, yet the way in which the government has so effectively utilised it lately is the biggest story right now.

The outcomes it has delivered are now a guiding star for other nations looking to make their CIP more effective.

AN OVERVIEW OF DOMINICA’S CIP For three consecutive years Dominica’s CIP has been ranked #1 by the Financial Times’ Professional Wealth Management (PWM) magazine. The nation of 74,000 has a CIP that has won wide acclaim for speed in processing its applications in under 90 days; its affordability – starting at a US$100,000 donation to the nation or US$200,000 investment in real estate – and the visa-free travel it offers to over 120 countries.

The government has also won fans for its efficient and precise marketing of the CIP. Information ensures that applicants can easily find an authorised agent and

the main website serves as an authoritative source, warning about scams and other issues that could lead applicants astray if not aware of them.

Dominica has also ensured its CIP doesn’t rest on its laurels. Over time it has continued to enhance the CIP’s benefits, like the announcement in 2018 that Dominica and Russia would begin visa-free travel arrangements between the two nations, allowing Dominican citizens to visit Russia for up to three months at a time without requiring a visa.

THE RESOURCES OF THE RECONSTRUCTION Tropical Storm Erika in 2015 and Hurricane Maria in 2017 both visited misery on Dominica. In the former, more than 1,000 families were left homeless; in the latter over 90 per cent of the nation’s houses – over 23,500 – were destroyed. Recovery from such carnage like Maria does not occur overnight, and indeed continues to this day.

As a result of revenue earned from Dominica’s CIP, public housing projects were financed quickly and construction began soon after. These projects were not simply rebuilding but creating better buildings – hurricane-resistant real estate Continued on page 6

RENEWABLE ENERGY

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ENERGY FINANCING: HOW RENEWABLES ARE ATTRACTING FDI

BY CATHERINE MORRIS, STAR BUSINESSWEEK CORRESPONDENT

T

he Caribbean’s dependence on fossil fuels may be bad news for the environment but it’s good news for energy investors as the region explores the lucrative possibilities of renewable energies.

Solar, geothermal, even tidal and wind power – the Caribbean is uniquely suited to many forms of renewable energy generation, thanks to its advantageous climate and geography, so it’s no surprise that investors in this field are turning their attention to the islands.

ENABLING FDI While almost all Caribbean nations are onboard with moving towards a green future, they cannot do it alone. Overstretched resources, limited public budgets, inadequate infrastructure and a lack of technical capacity have all hampered progress in the sector. While the more developed world races ahead with its renewable capability, the Caribbean is being left behind. As energy prices soar and environmental concerns mount, the region is running out of choices and green energies are the only sustainable solution.

Enter foreign investors. Armed with the financing, technical know-how and experience, energy investors can be a boon for islands struggling to meet their green energy goals.

One of the foremost investors in this space is MPC Capital, an international asset and investment manager with a global portfolio. Through its whollyowned investment vehicle MPC Renewable Energies, MPC Capital has been making inroads into the region’s renewables with projects in Jamaica, Trinidad and Tobago and, most recently, Barbados.

MPC Renewable Energies’ Managing Director Martin Vogt says the Caribbean renewables market is often a hard sell for investors reluctant to dive into such a new, and limited, space. “If you are a foreign investor, you are looking for markets that offer size and volume. Given the size of the islands you will never be able to build a couple of 100MW solar farms.

That restricts the international investor community.”

Another challenge, according to Vogt, is the lack of an enabling framework. Caribbean nations have been relying on outdated infrastructure and monopolised ownership of national power grids.

This, combined with limited public

Paradise Park, a 51 MWp solar PV park in Westmoreland, Jamaica, began energy production this summer. Investors in the project include MPC Caribbean Clean Energy Fund, Neoen and EREC-Co Invest. (Photo Courtesy MPC Capital)

budgets, has had a chilling effect on the sector for some time.

“You have very tight government budgets so there is very little room to manoeuvre,” says Vogt. “If the public sector cannot work together with the private sector due to restrictions then that is another burden. It is only very recently that the governments are putting the

Barbados aims to be 100 per cent reliant on renewable energy by 2030 and MPC Renewable Energies will help the country achieve this ambitious target by investing between US$75 million and US$100 million in wind and solar PV projects over the next few years

right regulatory frameworks in place to enable the private sector to invest in the clean energy space.”

Vogt, who has been working in renewables for over a decade, says the Dominican Republic is the most forward-thinking island in terms of its approach to green energy investment and ease of doing business. He also credits Jamaica for its progress in this area, saying:”Jamaica has not liberalised the energy sector but the government is consistently putting new opportunities to the private sector to do energy efficient projects or power generation projects.

Jamaica and the Dominican Republic are the most enabling markets.”

Another forward-thinker is Barbados, which MPC Renewable Energies has been eyeing for some time. The group hopes to begin construction of a 5MWp solar PV development in Barbados next year, and Vogt says the timing aligned thanks to Prime Minister Mia Mottley’s progressive policies. “We had been looking at Barbados. They addressed some major issues and are now creating momentum in the energy sector so we felt that now would be a good moment to look for the right partners and the right projects. This is the baseline you need – a government that puts the right

framework in place so investors like us are sure there is a long-term view on renewable energies. We need that longterm commitment.”

Barbados aims to be 100 per cent reliant on renewable energy by 2030 and MPC Renewable Energies will help the country achieve this ambitious target by investing between US$75 million and US$100 million in wind and solar PV projects over the next few years.

Investors in renewable energy markets are in it for the long haul. Capital intensive and revenue-driven, these projects need a substantial investment upfront and Vogt says it can take a decade before the returns are seen.

“Renewable energy is very long-term.

Typically the first 10 years is payback period then you enjoy a return on your investment.” According to Vogt, investors in MPC Renewable Energies projects can expect “attractive, riskadjusted” returns.

COMPETITIVE MARKETS The Caribbean’s year-round sun doesn’t just attract millions of tourists, it’s also a big lure for renewable investors. Solar is currently the biggest market in the Continued on page 7

SBW

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MARITIME INDUSTRY

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FLAGS OF CONVENIENCE: THE CARIBBEAN’S OPEN SHIPPING REGISTRIES CARRY A HEAVY COST Continued from page 1

WHAT ARE FOCS The term ‘flag of convenience’ (FOC) first entered the lexicon in the 1950s, but the practice has a longer history with its roots in Prohibition. Canny ship operators, who wanted to serve alcohol to their passengers, decided to circumvent the US temperance laws by registering their vessels in another country. What began as an underhand way to imbibe is now commonplace on the world’s oceans and it’s not unusual to see vessels from all over the globe flying Caribbean flags. Almost 73 per cent of the world fleet is flagged in a country other than that of its beneficial ownership, according to the United Nations Conference on Trade and Development.

Adopting another nation’s flag has obvious benefits. Some owners do it to avoid paying taxes, others to duck stringent safety requirements, cut operating costs or avoid labour laws. While every merchant ship must be registered in a national shipping registry, owners have almost free rein when it comes to selecting which country; so, although controversial, FOCs are not illegal.

Operating an ‘open’ registry, i.e. one that doesn’t require nationality or residency in that country, Panama has long been considered the most convenient flag thanks to ease of registry, cheap labour and zero income tax. The country has the largest ship registry in the world, according to shipping analysts Clarksons, with just over 7,000 vessels on its books. The second-largest is Liberia with 3,726 and the Marshall Islands is a close third with 3,719.

Only one Caribbean country (the Bahamas) made the top ten in 2018, taking seventh place, but several Caribbean nations have made a tidy profit from international vessels. Bermuda, the Cayman Islands, Antigua and Barbuda and St Vincent and the Grenadines all have popular ship registries. In 2016, Saint Lucia made its own move into the market when the Saint Lucia Air and Sea Ports Authority (SLASPA) announced implementation of an open ship registry.

SHIPBREAKING A ship may begin its life under one flag, but end its tenure under another. This type of ‘flag swapping’ is common on the high seas as vessels near the end of their operational lifespan and owners mull the costs involved with their dismantling.

Around a thousand ocean-going commercial vessels reach the end of their service life annually, according to NGO Shipbreaking Platform, and only a small percentage of these are properly handled.

More than 70 per cent of ships end up in South Asia and are haphazardly broken down on beaches where they pose a huge threat to human and environmental health.

Unfortunately for the Caribbean, a sizeable proportion of these junked ships are carrying the flag of St Kitts and Nevis.

According to a 2018 report from Shipbreaking Platform, St Kitts and Nevis

Shipbreaking in Bangladesh. (Photo courtesy Pierre Claquin)

is the fourth largest ‘end-of-life flag state’ in the world, behind Palau, Comoros and Panama. Since 2016, almost 150 St Kitts and Nevis ships have been scrapped on South Asian beaches.

The St Kitts and Nevis flag is a popular choice for unethical owners because the country has consistently failed to properly implement international maritime regulations and, as a result, has been blacklisted by the Paris Memorandum of Understanding. An investigation by The Independent earlier this year uncovered how a London-based firm is selling St Kitts and Nevis flags to cash in on the shady shipbreaking market. The company, Skanreg, revealed that the St Kitts and Nevis government had earned around US$500,000 from selling flags through the firm in 2016.

THE ENVIRONMENTAL AND HUMAN COST Toxic dumping grounds littered with ships leaching poisonous materials into the landscape is only one of the environmental hazards posed by unregulated maritime vessels.

In recent years there have been several dangerous oil spills from rigs and vessels carrying FOCs. The Deepwater Horizon, responsible for the largest oil spill in history, was registered in the Marshall Islands. In 2002, the Bahamian-flagcarrying oil tanker MV Prestige sank off the coast of Spain, leaking 50,000 tonnes of oil into the ocean.

Another concern for marine conservationists is the preponderance of illegal fishing activity among FOCs. Figures from the non-profit group Global Fishing Watch show that 48 per cent of refrigerated cargo vessels, used to collect large catches, are registered under FOCs. Obscuring their origins in this way makes it easier for a ship to engage in illegal,

unreported and unregulated fishing and threatens the future of fisheries worldwide.

It’s sadly not a big leap from illegal fishing to modern-day piracy. Many ships with illegal catch are also implicated in other nefarious activities such as drug smuggling and human trafficking. For ill-intentioned owners, signing up with a poorly monitored and/or unregulated ship registry opens the door to criminality and corruption. By way of example, two blacklisted vessels tied to the Vidal Spanish poaching syndicate evaded Interpol for years by regularly switching out flags and names. The Yongding and the Songhua cycled through the flags of Tanzania, Sierra Leone and Chile before being grounded in 2015.

Some of the most serious charges levelled at FOCs concern human rights abuses, particularly those of the workers onboard.

Unpaid wages, long hours, dangerous working conditions – horror stories from seafarers abound and have earned some

For small island economies, the appeal of easy overseas money often trumps the need for caution. Shipping registries can be a rich and sustainable source of revenue for regional governments but they carry a heavy cost if operated without stringent safeguards in place

FOC vessels the nickname of ‘sweatshops at sea’. The International Transport Workers’ Federation has a list of 35 ‘FOC Countries’ which includes Antigua and Barbuda, the Bahamas, the Cayman Islands, Barbados, Bermuda and St Vincent. The group wants to see a genuine link between a vessel’s owner and the flag it flies, claiming that FOC vessels often take advantage of cheap labour without any regulatory safeguards in place to guarantee workplace safety, fair wages and adequate compensation.

FLYING THE SAINT LUCIAN FLAG For small island economies, the appeal of easy overseas money often trumps the need for caution. Shipping registries can be a rich and sustainable source of revenue for regional governments but they carry a heavy cost if operated without stringent safeguards in place. As a newcomer into the market, Saint Lucia must look to St Kitts and Nevis as a cautionary tale. It is perhaps telling that when the Shipping Amendment Bill was passed and SLASPA announced the creation of Saint Lucia’s open registry, there was no mention of the need for oversight.

Instead, the Authority focused on the economic benefits and the hope that an open registry would gain Saint Lucia more global influence, saying: “The island is expected to gain several benefits from the implementation of an open ship registry.

These are not limited to employment of seafarers, increased revenue from taxes and fees, provision of legal services, and expansion and growth of maritime services. Additionally, apart from the obvious economic benefits, an increase in the quantum of ships registered will result in Saint Lucia having greater prominence and representation internationally, particularly at meetings of the International Maritime Organization (IMO).”

TAIWAN / FOREIGN RELATIONS

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THE NEW BATTLE FOR TAIWAN

BY ED KENNEDY, STAR BUSINESSWEEK CORRESPONDENT

I

t is rare that nations like Saint Lucia, St Kitts and Nevis or Haiti will find a decision made by their government today could trigger a chain of events leading to war tomorrow. Yet recent weeks have indeed shown that the future of Taiwan’s security – and any resultant war via a threat to it – could be deeply informed by dynamics in the Caribbean and wider Latin America.

This follows the news last month that the Solomon Islands and Kiribati would cut formal diplomatic relations with Taipei and recognise Beijing, leaving Taiwan with two less formal diplomatic allies in Asia.

CIRCLING THE BATTLEFIELD Since Xi Jinping’s ascent to the Chinese presidency in 2013, the ruling Communist Party of China has reverted to a far more authoritarian bent, domestically and globally. This is a sharp break from the style of the previous ruler Hu Jintao who, although no champion of democracy or human rights, was largely technocratic, seeking to focus on China’s economic growth over cultural crackdowns, and seemingly content for the ‘status quo’ to remain between Taipei and Beijing.

This all changed with China’s current president – the country’s most powerful ruler since Mao – intent on asserting China’s power anywhere he deems appropriate. Bringing Taiwan under his rule would be a jewel in the crown for Xi’s legacy. He has presided over an aggressive campaign to undermine, isolate and silence Taiwan internationally.

The aim has been to break the will of the Taiwanese people, with recent years seeing a particularly heavy emphasis placed on stripping Taiwan of its few remaining diplomatic allies.

A CARIBBEAN CALCULATION The Chinese government delights in speculation about a future war with Taiwan; also the profound reversal of fortune that has occurred within a lifetime, beginning when Beijing took over the UN Security Council seat that Taiwan held in the early 1970s. Then, just last month, the Solomon Islands and Kiribati cut ties with Taipei for Beijing.

Taiwan now has just four diplomatic allies in Asia; save for Eswatini (Swaziland) in Africa and the Holy See in Europe, its remaining nine are all in Latin America and the Caribbean. So what happens next?

The prospect of a People’s Liberation Army annexation of Taiwan may still remain improbable, but the likelihood continues to grow the more isolated Taiwan becomes internationally. In January Xi said Taiwan “must and will” be reunited with the mainland and reserved the right to use force in

Recent weeks have seen a new darkness cast across the future of Taiwan (Source: Pixabay)

achieving it. This followed Xi’s remarks to the CPC’s 19th Party Congress in 2017.

DIPLOMATIC DOLLARS Beijing is now expected to reinforce its efforts to see nations in this region switch sides. Central to this goal will be the Belt and Road Initiative (BRI). Nations like Jamaica, Barbados, and Antigua and Barbuda have signed up to the BRI in hopes of participating in the immense economic opportunities the initiative purports to offer.

In Xi’s era, Beijing has become very skilled at the ‘carrot and stick’ approach to diplomacy, promising the benefits of the BRI to nations that switch sides. At the same time, China is demonstrating a readiness to leave out in the cold those who do not switch, who must watch while their neighbours receive economic stimulus. That said, other stakeholders in this struggle are refining their own carrot and stick approach in diplomacy.

The Taipei Act is currently making its way through Washington DC. If passed, the US secretary of state would have new powers to rapidly reduce America’s diplomatic presence in nations that decide to jump ship from Taipei in favour of Beijing. Powers include reducing or ending all forms of American foreign assistance to countries that side with China, and those which America believes are aiding China in growing its influence in America’s ‘back yard’.

The actions of the US provide some support to Taiwan and look to offset Beijing’s growing might. However, a Chinese invasion of Taiwan and a subsequent military response by Washington and other Taipei allies would be economically ruinous for all

involved, and even nations that are not. The economic aftershocks of any conflict involving Washington and Beijing would make waves all across the world. Xi and China’s elite know this but they also have an array of issues at home, including the ongoing unrest in the financial powerhouse of Hong Kong, the inhabitants of which are challenging China’s dominance in scenes that will likely foreshadow any Chinese attempts at a possible Taiwanese annexation.

Meanwhile, late September also saw the one-year anniversary of the EU-Asia Connectivity scheme, a development partnership led by the EU and Japan, intending to offer an alternative to China’s BRI. So far the scheme has been focused on building a presence in the Indo-Pacific, the Balkans and Africa, but its emphasis on training in sovereign debt management – seen as a direct rebuke to widespread concerns about the BRI being a vessel for debt-trap diplomacy – means Brussels and Tokyo know such a scheme could find a larger audience in

Since Xi Jinping’s ascent to the Chinese presidency in 2013, the ruling Communist Party of China has reverted to a far more authoritarian bent, domestically and globally

wider Asia and LATAM, just as it has in Europe and Africa.

LEADERSHIP OF LITTLE NATIONS Local leaders need to think carefully now. Nations always have loyalty to their own people in the first instance and must pursue their interests accordingly. A new deal with Beijing would undoubtedly offer many enticing economic incentives but smaller nations in this region need to consider in what world they would like to operate, heading into the 2020s.

Current global issues include the ongoing US trade war, impeachment proceedings set to begin against US President Donald Trump (adding to further market instability in the US before an unpredictable 2020 election), the ongoing turmoil of Brexit, the worrying prospect of conflict between Saudi Arabia and Iran, not to mention the slow-motion train wreck of the Venezuelan economy. Making sudden moves in this arena is done amid many economic risks and unfolding challenges.

Ultimately, nobody in Taiwan would wish for a war and, save for the one in Beijing, few other governments would.

The challenge ahead for the international community is convincing Chinese leaders that Beijing does not have an inalienable right to reunify the island-nation of Taiwan with the mainland. Beijing may be increasingly confident that it could win a war with Taiwan and continue its reign as a world power, but history is replete with similar foibles, as seen when the USSR invaded Afghanistan in December 1979, and with the toppling of the Berlin Wall less than a decade later.

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DOMINICA’S RECOVERY FUELLED BY SUCCESSFUL CIP Continued from page 2

that would help guard against the same devastation, should another natural disaster visit the island.

The speed of movement in events here ultimately proved cyclical. The pace at which Dominica was able to begin recovery following Maria meant the government was able to get CIP applications back online faster, putting people back to work, and the revenue from approved CIPs once more flowing in.

The success of the CIP, and its source of revenue serving as a pillar in the reconstruction, also gives Dominica control over its destiny following a natural disaster.

This is something that nations around the region look upon closely following events of recent years. Certainly the work of NGOs can be invaluable, but it’s no surprise that their resources are often stretched. With the strength of its CIP, Dominica is able to pursue a reconstruction with more control over its country and the stakeholders in it.

HOMES AND HABITATS Dominica is an island famed for its many rivers and regular rainfall, even in its dryer months, and it has long held an enviable reputation for the beauty of its

The Capital Of Dominica, Roseau, is located on the southwestern coast of the country at the mouth of the River Roseau, facing the Caribbean Sea.

rainforests. This is no small achievement in a region abundant with beautiful natural features. Tragically, the force of Hurricane Maria not only destroyed property and claimed lives, but also savaged the rainforests and habitats they held for wildlife across the island.

The resulting destruction wasn’t just horrific at the time, but posed a threat to the future of Dominica’s tourism industry, and those who depend on it for their livelihoods. One ray of hope amidst this heartbreak was that Dominica has a good

track record when it comes to restoration, with the successful replanting work after 1979’s Hurricane David proof that it could be done again.

As a result, Dominica has cultivated a thriving eco-tourism industry, helping to restore the rainforests and generate new interest in their growth, within the region and around the world. This new subset of the tourism industry has been underwritten by Dominica’s CIP and credited with creating thousands of jobs across the nation.

THE OTHER SIDE OF THE COIN The success of Dominica’s CIP augurs well for the future of the nation. It has developed a product highly desired by those abroad, and highly profitable to its citizens at home. Yet Dominica’s economy today also has a heavy reliance on its CIP. Last year, during his budget speech, Prime Minister Roosevelt Skerrit projected that US$150 million – 52 per cent of the government’s revenue – would come from its CIP. Such a reliance is fine as long as the nation’s CIP remains highly desirable. A decline in demand could arise not because of anything that Dominica does, but because a competing CIP finds a unique selling point to beat it.

A CIP SUCCESS STORY Dominica’s CIP has unquestionably been mutually beneficial for the country and its new citizens. Dominica has been a shining star showing how to run a CIP that avoids pitfalls, and delivers on its aims. This sets a standard for nations intending to launch a CIP, as well as those with underperforming CIPs, and certainly nations with CIPs that have been wracked by scandals that continue to aggrieve their voting public and foreign governments abroad equally.

The Saint Lucia Registry of Companies & Intellectual Property Company Incorporations Name: Lucian Xpression Ltd.

Name: Blue Services Ltd.

Description: Craft and gift items

Description: AC Units, appliances, etc

Directors: Patricia Anthia Joshua, Karleen Julien,

Directors: Ramon George Esper,

Kayla Jacobie

Dominic Hadeed

Date Incorporated: 23/8/19

Date Incorporated: 23/8/19

Chamber: SEDU

Chamber: Fosters.

Name: 4 Pillars Ltd. Description: Retail of construction, power and

Name: Association of Musicians,

heavy-duty equipment

Producers and Performers of Saint Lucia Inc.

Directors: Rankin Morgan,

Description: Promote and advocate

Laura Morgan

Date Incorporated: 23/8/19 Chamber: Brickstone Law Name: Weekes Dean Inc.

the interest of musicians, producers and performers in Saint Lucia Directors: Jacqueline Cherebin-Weekes, Ian Sanchez, Ronelle Biscombe,

Description: Real esate investments

Buffalo Odlum, Barry George

Directors: Thomas Dean,

Date Incorporated: 18/8/19

Scheran Weekes

Chamber: McNamara & Co.

Date Incorporated: 24/8/19 Chamber: John & John Inc. Name: Top Deck Records Limited

Name: Solar Advantage Limited Description: Provide comprehensive

Description: Studio

solar services

Directors: Cletus Hippolyte

Directors: Dr. Richard Warner

Date Incorporated: 18/8/19

Date Incorporated: 19/8/19

Chamber: Para Legal World Plus

Chamber: Brickstone Law

RENEWABLE ENERGY

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ENERGY FINANCING: HOW RENEWABLES ARE ATTRACTING FDI Continued from page 3

region’s renewable sector and, as the technology develops, operations are becoming more cost-effective and productive.

MPC Renewable Energies focuses exclusively on solar and wind power projects. Vogt says the former has seen increasing competition and believes that, within ten years, Caribbean islands will be mostly run on this power source. “Solar to energy is extremely cost competitive. The issue the technology has is the limited amount of hours in the day and the need for storage. You cannot run an entire island on solar power, but that will likely change in the next decade as storage becomes cheaper. It is becoming more cost-effective.”

In August, St Kitts and Nevis announced plans to create the Caribbean’s largest solar facility, capable of meeting 25-30 per cent of the country’s energy needs. The 35.6 MW solar energy plant and 44.2 MWh battery storage facility will be built in Basseterre and developers say it will pay for itself over a 20-year period through savings created by the switch from the current dieselgenerated system.

The project is a partnership between the state-owned St Kitts Electric Company (SKELEC) and Swiss

“In 20 to 30 years, the Caribbean will be entirely operated on renewables,” says Vogt. “The price is declining, the technology is improving and costs are falling. Oil and gas are the fuel of the last century

Jamaica’s Paradise Park will use solar energy to produce green electricity at USD 0.085 per kWh. (Photo courtesy MPC Capital)

energy storage company Leclanché, which has established a Special Purpose Vehicle with local partner Solrid to fund, own and operate the facility.

But it’s not just solar that shows promise.

Geothermal energy, particularly in the Eastern Caribbean, is also coming across the radar of energy investors.

Nevis is moving ahead with plans for a 10MW geothermal power plant following the recent news that it has selected a drilling contractor for the facility. Nevis Renewable Energy International will work with Schlumberger Integrated Drilling Services on the design, installation and testing of wells for the project which is a collaboration between US firm Thermal Energy Partners and Nevis Island Administration. This is welcome news for Nevis as the project stalled late last year due to a lack of funding.

The government sought US$50 millionUS$60 million to revive its geothermal plans and carry the project into its second phase. Thermal Energy Partners joined the project shortly afterwards to help push it towards the finish line.

FUEL OF THE FUTURE “It is an extremely dynamic sector. These are exciting times,” says Vogt who believes that advances in technology will transform Caribbean energy over the next two decades. He also thinks, however, that a big barrier to growth is a lack of information on the ground and says: “People have not necessarily made the connection between

MPC Renewable Energies’ Managing Director Martin Vogt says the Caribbean renewables market is often a hard sell for investors reluctant to dive into such a new, and limited, space.

climate change and renewable energies being part of the solution.

“A lot of people haven’t understood the full potential of renewables yet, which has an impact on the level of support renewable energy is receiving.

There has to be a public information campaign. This will make it easier for the private sector to deploy the technology in local communities.”

Prepared or not, change is coming as the Caribbean moves to wean itself off fossil fuels. “In 20 to 30 years, the Caribbean will be entirely operated on renewables,” says Vogt. “The price is declining, the technology is improving and costs are falling. Oil and gas are the fuel of the last century. The third industrial revolution will be fuelled by renewable energy.

“There is still a long way to go [but] we are very optimistic. We see a lot of potential. We just need to make use of it and get it unlocked.

“The governments and policymakers have a huge agenda ahead of them and can only achieve their goals in partnership with the private SBW sector.”

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