By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas has received its first-ever financing from the latest multilateral lender it has joined in the form of a $100m loan to aid the National Energy Policy’s implementation.

The Development Bank of Latin America and the Caribbean (CAF), in which The Bahamas became a shareholder in November 2024, yesterday confirmed that its Board of Directors had approved the financing at its Board of Directors meeting in Seville, Spain.

The terms and conditions, apart from the dollar amount, were not disclosed by CAF, which said: “The approved resources will support the Government of The Bahamas in the implementation of key elements of its National Energy Policy, including strengthening the regulatory framework, modernising infrastructure, promoting renewable energy and improving energy efficiency.

“The operation is aligned with CAF’s green agenda, and will contribute to the country’s efforts to mitigate climate change by transitioning to cleaner and more sustainable energy sources. With this approval, The Bahamas will be able to improve the reliability of its electricity system, reduce generation costs and increase its resilience to climate shocks. The reforms also seek to attract new investments in energy infrastructure.”

Sergio Diaz-Granados, CAF’s executive president, added: “The Bahamas is one of CAF’s newest shareholder countries, and we are proud to approve our first sovereign operation in support of its national commitments to more sustainable energy.

“This approval reflects our commitment to be a reliable partner in the country’s path towards sustainable and inclusive growth. We understand the unique challenges faced by small island states and stand ready to further deepen our collaboration with The Bahamas.”

CAF said the financing “will also strengthen institutional capacities and lay the groundwork for long-term investments in the country’s energy transition”. It added: “The operation will support key objectives outlined in the Bahamas National Energy Policy, including the modernisation and digitisation of the electricity network, enhanced integration of renewable energy sources, improved affordability and strengthened institutional capacity in the energy sector.

“It aims to reduce reliance on fossil fuels, improve energy access and efficiency, and bolster climate resilience, especially for vulnerable island communities.”  Jobeth Coleby-Davis, minister of energy and transport, said during the 2025-2026 Budget debate that the initial National Energy Policy - last updated in 2013 - had been rendered “obsolete” by recent developments.

“In less than one year, the ministry produced a draft new National Energy Policy 2025-2030, and conducted public consultations throughout The Bahamas on New Providence, Grand Bahama, Abaco, Eleuthera, Cat Island, Exuma and Inagua. The ministry also hosted focus groups with key industry stakeholders,” the minister said.

“Today, the National Energy Policy is being gazetted for publication by the end of June - a significant milestone for our country. I am especially proud that this critical policy work was spearheaded by young professionals in the ministry, all under the age of 35. Their dedication, expertise and forward-thinking approach reflect the talent and promise of the next generation of leadership in the energy sector.”

The Policy, which has yet to be finalised, calls for the creation of a Department of Energy. And it sets out targets, such as cutting energy losses from BPL’s grid, known as the transmission and distribution (T&D) system, from the present 15 percent to 10 percent by 2030, while also seeking to “decrease annual system outages due to failures” in the grid by 30 percent come the same year.

Energy efficiency and conservation is also a key focus. “The Government has been making consistent and sustained efforts to meet its international obligations regarding climate change and energy efficiency, evidenced in part by the identification and execution of energy-saving measures within Government-occupied buildings,” the draft National Energy Policy said.

“In 2023, energy audits were conducted on more than 70 such buildings, assessing their energy use and identifying opportunities for savings. The audit results show the potential for an annual savings exceeding $1m, with some government buildings currently realising such benefits.”

“To date, 25 percent of government buildings’ energy consumption have been audited, and it is a goal of the Government to aggressively audit all government-occupied buildings by 2026. The Government, through the Ministry of Energy and Transport, is also committed to promoting energy efficiency in Bahamian homes to mitigate cost of living and enhance climate change resilience.”

The National Energy Policy said the Bahamas’ Customs headquarters building on Thompson Boulevard had reported energy savings worth $65,000 in 2023 compared to the prior year as a result of implementing energy efficiency measures.

The draft Policy also reveals that the Cabinet on November 19, 2024, approved the creation of a Department of Energy to give “focused attention” to all issues regarding the industry given its importance to The Bahamas and the country’s economic competitiveness.

“Recognising the very significant role of the energy sector to national growth and development, the Government has established the Department of Energy to bring focused attention to matters concerning the energy sector in The Bahamas,” it confirmed.

“While the Government also recognises and acknowledges URCA’s role, jurisdiction and statutory mandate to regulate the energy sector in The Bahamas, the Department of Energy has been given the clear mandate to lead, oversee and superintend certain key energy sector initiatives.

“The Government expects that the Department of Energy will work closely with the Ministry of Energy and Transport and other energy sector agencies, including URCA, to implement the Government’s National Energy Policy.”