Access to finance key for solar in small island nations

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“We recognize SIDS’ need for access to affordable, reliable, sustainable, and modern energy, particularly renewable energy. SIDS are facing significant barriers related to accessing finance, cost of capital, market readiness, and upskilling and reskilling workforces needed for just, inclusive, and resilient energy transitions.”

So states the Antigua and Barbuda Agenda for Small Island Developing States (ABAS), and following the first the day of the SIDS conference at the American University of Antigua in St. Johns this week, it’s clear that access to finance will be top of the agenda throughout the four-day event.

Gaston Browne, prime minister of Antigua and the president of the SIDS Conference, noted the ongoing risks of extreme weather and other climate change impacts, and the unique vulnerabilities of small island nations to these.

Browne outlined how economic development for SIDS has repeatedly been held back by climate change, Covid-19, global financial crises, and other problems which the islands themselves had no hand in causing. He boldly stated that large emitters bear responsibility for these impacts, and have an obligation to provide compensation. He called on the global north to honor its commitments and make at least $100 billion in climate financing available to SIDS and other developing economies.

Regarding energy in particular, Browne stated that it is “high time to end all subsidies for fossil fuels and accelerate transition to renewable energies,” adding that oil companies and other major polluters should play a role in providing the required financing.

Fairer financing

Following Browne, United Nations General Secretary Antonio Guterres spoke of the need for improved access to finance, and a level playing field for SIDS.

“Finance is the fuel that powers sustainable development,” he told the audience. “We need a financial system that puts the interests of developing countries first, and works as a global safety net.”

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During a discussion with journalists later in the day, Paul Chet Greene, Minister of Foreign Affairs, Agriculture, Trade & Barbuda Affairs of the host country Antigua and Barbuda, estimated that wealthy countries can access funding at interest rates of 2% to 3%, while developing economies often have to pay more than 10%, which he described as “fundamentally unjust.”

Speakers throughout the day out further noted that many small island states have been forced to take on huge debts to recover from natural disasters that they are uniquely vulnerable to, and the cost of servicing this debt limits funding for sustainable development and resilience, leaving them still vulnerable to the growing risk of natural disasters.

Space for solar

It was a day of high-level discussion and international politics. And access to finance for SIDS will be the key topic throughout the conference. It is also clear though, that solar and renewable energy, have a key role to play here, as part of what is being financed. Gianni Chianetta, Chair of the Greening the Islands foundation, told pv magazine that the foundation sees SIDS as potential world leaders in renewable energy, and aims to help push for 100% renewable energy across small islands.

And this again comes down to financing, and Greening the Islands is now focused on creating case studies, beginning with projects on the Mauritian Island of Rodrigues and Curaçao in the Caribbean and later expanding to other islands – to help convince regional leaders and global investors of the value of clean energy and the viability of 100% renewables systems.

Greening the islands will also focus on collaboration between nations, with future plans even to explore possibilities for interconnection via undersea cables, again with the aim to create demand at the scale that might interest large-scale investors and improve the financial terms on offer.

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