Prime Minister of St. Kitts and Nevis, Dr. the Honourable Timothy Harris’ Keynote Address at the Opening Session of the Regional Geothermal Forum, Tuesday, May 10th, 2016
Venue: St. Kitts Marriott Resort
Salutations – Thank you very much, Mr. Master of Ceremonies. Could we give Raymond a round of applause for so ably taking us through what has been an extensive programme? Of course, I want to acknowledge with delight the presence of several members of the Cabinet, in particular our Senior Minister and Premier of Nevis, the Honourable Vance Amory; we have the Honourable Lindsay Grant, our Minister of Tourism et al.; we have Senator Wendy Phipps, our Minister of State; we have our Deputy Speaker of the National Assembly, the Honourable Michael Perkins with us; our Cabinet Secretary, and we have several of our Permanent Secretaries from across the Government. We acknowledge with delight the presence of the Excellencies of the Diplomatic Corps and Consular Corps of St. Kitts and Nevis and also those visiting from abroad. Heads of Delegation, the members of the Board of Directors of SKELEC are here; we want to welcome all invitees, including the media.
I want to begin by congratulating the organizers of this Regional Geothermal Forum – the CARICOM Secretariat and the OECS Commission. The Government of St. Kitts and Nevis is happy to partner with you to discuss opportunities and synergies for regional collaboration, as we strive to achieve the targets of the Caribbean Sustainable Energy Roadmap and Strategy (C-SERMS). The sponsors of this Forum, I’m advised, are the German Agency for International Cooperation (Let us give them a hand of appreciation!), the Inter-American Development Bank (IDB) and the Caribbean Development Bank (CDB). We commend them for their participation and their sponsorship.
St. Kitts and Nevis was chosen as the venue because the organizers of the Forum felt that this Forum should be held in a CARICOM Member State which, and I quote, “on the basis of resource potential, has a realistic opportunity for integrating geothermal power into its energy mix,” end of quote. In particular, the organizers say that, quote, “the commitment of the Government of St. Kitts and Nevis to geothermal development is exemplary and continues to be manifested through an active programme on both islands,” end of quote.
The people and Government of St. Kitts and Nevis are therefore honoured that you are all with us today because you believe that the country is a shining example of what can be achieved by sheer political will and perseverance. Of course, we do appreciate that we still have some distance to go. Nonetheless, we are encouraged by those sentiments coming external to us, and we extend a hearty welcome to all of you who are here and I share the view expressed by the Minister [of Energy et al., the Honourable Ian Liburd] before me you that you should find time to savour and explore our beautiful country.
On April 21st, the Fourth Meeting of the Caribbean Development Roundtable was convened right here at the St. Kitts Marriott Resort. The Roundtable discussion, which formed part of the Twenty-Sixth Session of the Caribbean Development and Cooperation Committee (CDCC), explored possible debt relief options for heavily indebted countries in the subregion. This is in light of the fact that the Caribbean countries are among the most highly indebted countries anywhere in the world due in large part to unanticipated external shocks, structural factors and extreme weather events. A 2002 report by the IDB, for instance, says that between 1970 and 1999, a 30-year period, the Caribbean region suffered direct and indirect losses estimated at between US$700 million and US$3.3 billion due to natural disasters associated with extreme weather events.
With this in mind, CARICOM member countries signed the landmark Paris Agreement on climate change at the United Nations only recently on April 22nd to be exact, Earth Day. In fact, the UN Secretary-General, Ban Ki-Moon, congratulated St. Kitts and Nevis along with four other CARICOM countries that include Barbados, Belize, Grenada and St. Lucia, for being among the 15 Parties that deposited their instruments of ratification on the first day of the signing period. With the signing of the Paris Agreement, our Governments have committed to implement our national climate change action plans and to integrate them into our overall sustainable developmental goals. We have also been working on a Roadmap for increasing ambition over time to achieve the overall aim of limiting global temperature rise to well below 2 degrees Celsius.
As things stand, the Caribbean is disproportionately dependent on imported fossil fuels, with more than 90 percent of CARICOM’s commercial energy consumption being fossil fuel dependent. Moreover, countries in the Caribbean are saddled with some of the world’s highest per capita energy costs. The region’s annual fuel import bill is put at around US$9 billion per year. The United Nations Development Programme (UNDP) has said that the cost of fuel imports to the Caribbean jumped from US$6.5 billion in 2004, to US$12 billion in 2007, representing between 16 percent and 21 percent of GDP, respectively. Meanwhile, the region has a wealth of largely untapped renewable energy resources, which can be leveraged to lower energy costs and increase living standards and social welfare.
These alternatives are cleaner than fossil fuels. At the macro level, the high cost of electricity has been a competitive disadvantage for our region and has diminished our performance in the World Bank’s Ease of Doing Business report. At the micro level, residents in our countries pay some of the highest retail electricity prices in the world. This deprives a majority of our citizens of a significant portion of their income, and it certainly limits their ability to afford many basic goods and services. In particular, the impact of high energy costs falls disproportionately on the more vulnerable groups in our societies such as our senior citizens and the poor. Naturally, this places pressure of the state to provide social safety nets for a large portion of the population. Maintaining relative affordability of electricity and other affordable energy solutions is essential to the well-being of the region’s population and provides a necessary factor in people empowerment.
Energy independence is a key driver of sustainable development and an engine of economic growth, and my Government intends to keep the key to the sustainable future in the ignition and take our feet off the gas pedal. An economic and financial analysis of St. Kitts and Nevis’ geothermal project by the Inter-American Development Bank (IDB) valued the net economic benefits for the project in St. Kitts at some US$77.5 million and the net economic benefits for the project in Nevis, I’m advised, at US$19 million.
Given the socio-economic impacts of pursuing renewable energy development and energy efficiency, my Government passed the requisite legislation to accommodate the commercial use of all of our country’s renewable energy resources, be it wind, solar or geothermal. For instance, we amended the Electricity Supply Act, making way for renewable energy to be integrated into our national grid.
Our goal is that, by the year 2020, nearly 100 percent of the electricity supplied in the country would be produced from renewable energy sources. We aim to become the first green country in the world and we are cognizant that this is an ambitious goal, but St. Kitts and Nevis is just the kind of country that would achieve this ambitious goal.
Today, we are convened at this Forum out of the recognition that the successful integration of geothermal energy into the regional energy mix is key to the success of the Caribbean Sustainable Energy Roadmap and Strategy (C-SERMS). Also integral to the process of the Caribbean Sustainable Energy Roadmap and Strategy is an approach that maintains each member country’s distinct national geothermal roadmap while promoting collaboration on matters of benefit to all of us. For instance, collaboration can be had on working around barriers such as high initial capital costs, inadequate human resources and technical expertise. A collective approach must also aim to accelerate strategies to enhance information sharing and knowledge exchange among countries and achieve greater access to finance, as well as increased donor coordination and more viable public-private partnerships (PPPs).
Successful public-private partnerships are of course easier said than done, and, indeed, I draw on the work of Brian Samuel who is associated with the Caribbean Development Bank and provides support in the area of public-private partnerships (PPPs). This is what he had to say: “Up and down the Caribbean, you hear talk about all sorts of exciting PPP projects, from wind farms to geothermal power plants. Sadly, most of them are just that: talk,” he said, “The World Bank’s Caribbean PPP Road Map published in 2014 found that only 12 percent of all projects actually reach the tender stage; most never get past the drawing board,” end of quote. So we are seeing basically that there is a challenge of getting people to come together to overcome some of the difficulties, the gaps, the constraints that are inherent in this new and important venture in which we must engage. Part of the challenge is, how do you get people to come on board, being conscious of a certain level of risk inherent in this new industry and at the same time feel confident enough with their partners that they can be in it for the long haul, and given the significant investment that our friend from the Caribbean Development Bank [Mr. Joseph Williams, Sustainable Energy Adviser, Caribbean Development Bank who spoke before] indicated is required for this project? The single most important constraint, I heard my friend say, is finance. I wish we had more billionaires in the Caribbean willing to take a chance in an important new area that can transform the lives of all of us for the better.
With a view to reverse this trend, the Caribbean’s development partners launched a number of facilities in the past year to help governments build capacity and better structure and implement public-private partnership projects in the clean energy sector.
I note, for example, in April 2015, the United States Government launched the Clean Energy Finance Facility for the Caribbean and Central America (CEFF-CCA). This is a $20 million facility that provides early-stage funding for clean energy projects in seven Central American countries and 11 CARICOM countries. It draws on the expertise of the U.S. Overseas Private Investment Corporation (OPIC), the U.S. Trade and Development Agency (USTDA) and the U.S. Agency for International Development (USAID). The two-year program intends to catalyze much-needed public and private sector investment in promising but undercapitalized clean energy projects.
We would want to highlight, too, that the Caribbean Development Bank (CDB) has put a modest US$1.2 million in the Regional PPP Support Facility as one way of assisting in alternative energy development.
Then in October, the Inter-American Development Bank (IDB) and the Caribbean Development Bank (CDB) signed off on the Sustainable Energy Facility (SEF). US$71.5 million was set aside to support renewable energy and institutional capacity projects in Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines. These are the principal countries that should benefit.
The establishment of these facilities demonstrates the ongoing commitment of our development partners whose financial and technical support has been a catalyst for recent geothermal developments.
The U.S. State Department, for instance, has provided ongoing technical assistance to St. Kitts and Nevis, particularly in relation to attracting even more private investment, facilitating renewable energy integration, and developing our regulatory sector. And, in this regard, when the representative of the Nevis Island Administration (NIA) [Mr. Ernie Stapleton, Permanent Secretary, Ministry of Communication et al.] spoke, he said now in Nevis, with their experience, they have developed a model for procurement with respect to geothermal. So, if that is put to the test, St. Kitts and Nevis should shine again in relation to geothermal developments, and after a 10-year history it is time for us to have more significant developments. So we will work hard with our development partners, and we want to say to you we appreciate your interest and your support.
And you recognize perhaps even more than we do that we need special support and special assistance. It is part of the structural realities of small-island developing states (SIDS) like St. Kitts and Nevis that the costs of development usually is difficult for the national purse and therefore we look for strategic partners, conscious of the challenges that we face, to come into a genuine partnership, providing not just technical support – as important as that is – providing not just human support – as important as that is – but putting your money in a real way where we can make this thing work. And that is what we are looking ultimately for; a genuine partner that understands that development is a challenge not just for a day. Indeed, development has to be seen as an inter-generational construct. It takes you 30 years to really move and to advance from one phase of development with significant, consistent investment, and so we are appreciative and we are looking for even more partnerships in that regard.
We heard from the Commissioner of the OECS [H.E. Mr. Felix Gregoire who spoke immediately before] that geothermal presents an opportunity for our countries to diversify their power generation mix in a sustainable way and it can be a less costly option than utilizing fossil fuels. When the stabilized cost of electricity supply and the enhancement to energy security are considered, geothermal represents then the future for many countries in the OECS. It will provide a new export industry. When we look at, for example, the potential for geothermal in Nevis; it has the capacity to provide more than Nevisians would require in their normal usage, and so we are looking at this to bring new streams of revenue, in terms of a new export industry, into play for both St. Kitts and Nevis. And it is perhaps a good thing that not every island has the good fortune and is equally blessed. So there are countries that will require our geothermal energy, and I believe in part that some of the interest that we have been having from the U.S. comes from the potential for the island of Nevis to supply as far as Puerto Rico with this important resource and to add to the energy security of the U.S. and more particularly Puerto Rico.
I am delighted to report that within the Federation of St. Kitts and Nevis the construction of a geothermal plant has been, in Nevis, a decade-long effort. We have had the ups and downs; we have had the usual challenges and delays that come sometimes with change in government in terms of new development, and we have had other issues impacting upon that. What we can now say is that the geothermal project in Nevis is in a space and at a stage where it is ready to go, ready to go! I want to commend Premier Amory and his administration for the leadership and for the transparent way in which they have approached geothermal in Nevis. In St. Kitts, we have been doing some work with Teranov to examine the technical feasibility and economic viability for geothermal power in St. Kitts and Nevis, and we are happy to have with us Jacques Chouraki, the President of Teranov who is here. Could we give him a hand of welcome? Significant risks continue to inhibit geothermal development within the region, and these risks can be mitigated through partnerships.
That is why we welcome the wide range of representatives we have here representing the CDB, the IDB, the OECS and so on. ThisRegional Geothermal Forum should build on the success of October’s Caribbean Round Table at the GEOLAC in Nicaragua with the World Bank, the German Agency for International Cooperation (GIZ), the CARICOM Secretariat and the OECS. I am pleased to see so many government and development partners here at this special Forum, and I trust that the outcomes of this Forum will form the framework for the Regional Geothermal Strategy moving forward.
I call on all of us, and in particular the participants in this Forum, to maintain a purposeful stance towards achieving energy security and energy independence for the Caribbean. In closing, I wish this Forum every success and hope that the deliberations over the next two days will bear significant fruit. Successful geothermal development can positively impact energy security within the Eastern Caribbean, indeed within the wider CARICOM community. And I challenge you to make this event, which connects geothermal decision-makers and developers with key international experts, a watershed for a transformed energy future that delivers affordable, reliable, sustainable and clean energy to the citizens of the Caribbean region.
May God bless this Forum, may God bless our beautiful country! I thank you.
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