The “biggest road­block” to the in­vest­ment in re­new­able en­er­gy projects in the Caribbean are the in­vestor reg­u­la­tions that are in place, Mar­tin Vogt, man­ag­ing di­rec­tor of Ger­man in­vest­ment and as­set man­age­ment com­pa­ny MPC Cap­i­tal has said.

Vogt made the state­ment as part of a pre­sen­ta­tion in the En­er­gy Cham­ber’s vir­tu­al con­fer­ence dur­ing a ses­sion ti­tled “At­tract­ing cap­i­tal for re­new­able en­er­gy projects.”

“As a for­eign in­vestor, we re­al­ly pre­fer and like to in­vest in projects where we have al­so lo­cal cap­i­tal in the cap­i­tal struc­ture, lo­cal eq­ui­ty and we can on­ly do that if the lo­cal in­vest­ment reg­u­la­tions al­lows lo­cal in­sur­ance com­pa­nies, pen­sion funds, and oth­er in­sti­tu­tion­al in­vestors to di­rect­ly in­vest in these projects and we see that in many cas­es the in­vest­ment reg­u­la­tions for those par­ties is not de­mand­ed in a way that pro­vides an en­abling en­vi­ron­ment in or­der to de­ploy cap­i­tal from re­sources,” Vogt said.

“I think it is very im­por­tant be­cause oth­er­wise, it will cre­ate a sit­u­a­tion where on­ly for­eign cap­i­tal comes un­der the ben­e­fit of re­new­able en­er­gy projects and there is very lim­it­ed re­ten­tion of ben­e­fit in the coun­try as div­i­dends and ba­si­cal­ly the ben­e­fits, are be­ing repa­tri­at­ed out of the re­gion again,” he said.

Vogt said for an emerg­ing mar­ket it is im­por­tant that ben­e­fits stay in the re­gion and with that al­so comes the in­vestor ex­pe­ri­ence.

Over the next two years, MPC Cap­i­tal aims to raise US$90 mil­lion from US-based im­pact in­vestors, in­sti­tu­tion­al in­vestors and foun­da­tions.

The mon­ey will be al­lo­cat­ed to up to 15 re­new­able in­fra­struc­ture projects in the Caribbean.

MPC Cap­i­tal made its first in­vest­ment in the re­new­able en­er­gy sec­tor in the Caribbean in 2016 and has since then con­tin­u­ous­ly ex­pand­ed its lo­cal foot­print and ac­tiv­i­ties.

The projects, which to­tal ap­prox­i­mate­ly 200 MW of in­stalled ca­pac­i­ty, will gen­er­ate clean en­er­gy and re­duce the re­gion’s de­pen­dence on fos­sil fu­el im­ports.

MPC Cap­i­tal made this com­mit­ment with the Clin­ton Glob­al Ini­tia­tive Ac­tion Net­work and will de­pend on the en­gage­ment with CGI for part­ner­ships to en­able in­vest­ments.

Ali­cia Tay­lor, in­vest­ment man­age­ment lead of­fi­cer, in­fra­struc­ture and en­er­gy di­vi­sion at the In­ter-Amer­i­can De­vel­op­ment Bank, said IDB In­vest was com­mit­ted to pro­vid­ing cap­i­tal for the re­new­able projects once all the cri­te­ria are met.

“To at­tract cap­i­tal for re­new­able en­er­gy projects it is im­por­tant to have an en­abling en­vi­ron­ment where de­vel­op­ers feel that there is sta­bil­i­ty and in­vestors feel that they can make a rea­son­able re­turn it is al­so crit­i­cal to have a strong EPC (en­gi­neer­ing, pro­cure­ment, con­struc­tion) con­trac­tor, a bank­able PPA (pow­er pur­chase agree­ment) and a tech­ni­cal­ly sound spon­sor es­pe­cial­ly in T&T and the Caribbean we are pre­pared to sup­port not just the large projects,” Tay­lor said.

Carl­ton Thomas from Na­tion­al En­er­gy said now more than ever is a good time to ac­cel­er­ate the tran­si­tion re­gion­al­ly clean en­er­gy.

“The po­ten­tial for re­new­able en­er­gy and en­er­gy ef­fi­cien­cy in the Caribbean is very strong,” he said.

“There are ini­tia­tives that can be un­der­tak­en to both spur growth in jobs and over­all eco­nom­ic im­prove­ments while at the same time con­tribut­ing to the re­duc­tion in harm­ful emis­sions and im­prove ef­fi­cien­cy across the re­gion,” Thomas said.

Thomas said that Caribbean states do not have suf­fi­cient fi­nan­cial re­sources to ac­cel­er­ate the clean en­er­gy tran­si­tion at the speed that is re­quired.

He said that a post COVID-19 world can be a riski­er space for fi­nance but that in­vestors and gov­ern­ments can col­lab­o­rate to ad­dress sec­tor-wide risks. 

Thomas said that more ro­bust reg­u­la­to­ry and en­vi­ron­men­tal leg­is­la­tion can as­sist with the pace of the tran­si­tion.

Scale is im­por­tant to at­tract more com­pet­i­tive fi­nanc­ing. Re­gion­al col­lab­o­ra­tion is im­por­tant to re­alise scale. 

BPTT’s re­gion­al pres­i­dent Claire Fitz­patrick said tril­lions of dol­lars would be need­ed if the world is to avert dis­as­ter from glob­al warm­ing.

Ac­cord­ing to BP’s sta­tis­ti­cal re­view of world en­er­gy glob­al car­bon emis­sions are ex­pect­ed to grow by 10 per cent in the next 20 years.

And in or­der to deal with glob­al warm­ing car­bon emis­sions need to be re­duced by half the cur­rent rate.

Fitz­patrick said the en­er­gy that is pro­duced must there­fore be kinder to the en­vi­ron­ment.

Re­new­able en­er­gy now pro­vides 10 per cent of the pow­er glob­al­ly and is the fastest grow­ing source of en­er­gy ex­pect­ed to ul­ti­mate­ly be­come the largest source of pow­er in 20 years.

BP is striv­ing to be­come a net ze­ro com­pa­ny in the com­ing decades.

Prime Min­is­ter Dr Kei­th Row­ley an­nounced that two ma­jor so­lar projects that will gen­er­ate pow­er in this coun­try at a cost on par with cur­rent elec­tric­i­ty prices.

He said the Roadmap to Re­cov­ery team rec­om­mend­ed stim­u­lat­ing ac­tiv­i­ty in the area of en­er­gy ef­fi­cien­cy and set­ting am­bi­tious tar­gets for in­creased pow­er gen­er­a­tion from re­new­ables.

“To this end, as you may be aware, the Min­istry of En­er­gy and En­er­gy In­dus­tries (MEEI) re­cent­ly an­nounced the win­ning bid in re­sponse to a Re­quest for Pro­pos­als (RFP) for Util­i­ty Scale Re­new­able En­er­gy Projects. A con­sor­tium formed by Light­source Re­new­able Glob­al De­vel­op­ment Ltd (Light­source BP), Shell T&T Ltd and BP Al­ter­na­tive En­er­gy T&T Ltd sub­mit­ted suc­cess­ful pro­pos­als for two projects,” Row­ley said.

“These projects will gen­er­ate 92.2 MW of elec­tric­i­ty from so­lar pho­to­volta­ic (PV) sources at Cou­va; and 20 MW of elec­tric­i­ty from so­lar PV sources at Trinci­ty, at a cost that is on par with the cur­rent elec­tric­i­ty prices in T&T,” he said.

These projects form part of an over­all plan by the gov­ern­ment to re­duce car­bon emis­sions in this coun­try by 2030.

“The aim of T&T is to achieve a re­duc­tion in over­all emis­sions from the three sec­tors by 15 per cent by 2030 from Busi­ness as Usu­al (BAU), which in ab­solute terms is an equiv­a­lent of one hun­dred and three mil­lion tonnes of car­bon diox­ide equiv­a­lent,” he said.

In its Re­new­able En­er­gy Mar­ket Up­date for May 2020, the In­ter­na­tion­al En­er­gy Agency has not­ed that the Covid-19 cri­sis is neg­a­tive­ly im­pact­ing the glob­al growth in re­new­able pow­er ca­pac­i­ty.

“Now more than ever, re­new­able en­er­gy and en­er­gy ef­fi­cien­cy ini­tia­tives are need­ed as we come face to face with a rapid­ly chang­ing en­er­gy and eco­nom­ic land­scape, com­bined with the threat of cli­mate change,” Row­ley said.

“How­ev­er, in ad­di­tion to look­ing to re­new­able en­er­gy and en­er­gy ef­fi­cien­cy to se­cure a clean, sus­tain­able fu­ture for gen­er­a­tions to come, it is al­so our du­ty as the Gov­ern­ment of the Re­pub­lic of T&T to en­sure that we are max­imis­ing the use of the coun­try’s rich nat­ur­al re­sources to the ben­e­fit of the cit­i­zens. We must, there­fore, re-ex­am­ine how we de­rive the great­est val­ue from our nat­ur­al gas,” he said.

Chief ex­ec­u­tive of­fi­cer of the En­er­gy Cham­ber Dr Thack­wray Dri­ver de­scribed Row­ley’s an­nounce­ment as a game-chang­er.

“I can’t help not­ing one thing in par­tic­u­lar when you were dis­cussing the util­i­ty scale so­lar your com­ment that we would be pro­duc­ing en­er­gy on par with lo­cal elec­tric­i­ty costs, now that’s a big an­nounce­ment be­cause lo­cal elec­tric­i­ty has been cheap and it has been his­tor­i­cal­ly cheap and if we’re able to pro­duce so­lar on par with that that’s a game-chang­er,” Dri­ver said.