Abu Dhabi Fund for Development (ADFD) has inked a Dh55 million ($15 million) loan agreement with Saint Vincent and the Grenadines to set up a geothermal power station in the southern Caribbean country.

The agreement, between ADFD and St Vincent and the Grenadines, was signed between Mohammed Saif Al Suwaidi, director general of Abu Dhabi Fund for Development (ADFD) and H.E Ralph Gonsalves, Prime Minister of Saint Vincent and the Grenadines.

The project is being funded as part of the dh1.285 billion ($350 million) ADFD/Irena project facility, set up in 2012, to provide concessional financing for renewable energy projects in developing countries affiliated to International Renewable Energy Agency (Irena).

One of the five projects selected for funding as part of the second loan cycle facility, the power plant aims to utilize naturally occurring geothermal energy to plug the power shortage in Saint Vincent and the Grenadines. In the long term, the project will help drive the wider energy sector and accelerate sustainable economic development across the country’s 32 islands.

Gonsalves said: “The proposed geothermal power plant will give a strong boost to the energy sector in our country, supporting its economic growth and development programmes.

“ADFD plays an active role in financing development projects that translate into significant economic and social impact in beneficiary countries. My government is keen to leverage our collaboration with the Fund to push ahead with more development projects that deliver key sustainable development goals and benefit the overall economy.”

Al Suwaidi said: “ADFD has paid particular attention to the renewable energy sector given the essential role of the sustainable energy in meeting the growing needs of developing countries, and supporting their social and economic development.”

“The renewable energy projects financed by the Fund since 1974 to date have contributed to delivering clean energy for millions of people in more than 24 developing countries across the globe. These projects have generated thousands of megawatts of renewable energy, and stimulated economic growth in the beneficiary countries,” he added.

The geothermal power plant in St. Vincent and the Grenadines, with a capacity of almost 15MW, will enhance the electricity grid in the island by leveraging its natural renewable sources, while cutting the cost of electricity generation by 25 per cent.

In addition, the associated construction, operations and maintenance of the plant, the conversion station and 40km of transmission lines to connect the plant to the grid is anticipated to create several job opportunities for the local population. – TradeArabia News Service