Key access to solar financing in small island countries – pv international magazine

May 28, 2024 Mark Hutchins

“We know SIDS need access to affordable, reliable, sustainable and modern energy, especially renewable energy. SIDS face significant barriers related to access to finance, cost of capital, market readiness, and upskilling and reskilling the workforce needed for a just, inclusive and resilient energy transition.”

This is what the Antigua and Barbuda Agenda for Small Island Developing States (ABAS) states and after the first day of the SIDS conference at the American University of Antigua in St. Johns this week, it is clear that access to finance will be at the forefront of the entire four-day event.

Gaston Browne, Prime Minister of Antigua and Chair of the SIDS Conference, noted the ongoing risks from extreme weather and other impacts of climate change, as well as the unique vulnerability of small island nations to them.

Browne described how SIDS’ economic development has been repeatedly hampered by climate change, Covid-19, the global financial crisis and other problems that the islands themselves had no role in causing. He boldly stated that large emitters are responsible for these impacts and have an obligation to provide compensation. He called on the global North to meet its commitments and make at least $100 billion in climate finance available to SIDS and other developing economies.

On energy specifically, Browne said it was “high time to end all fossil fuel subsidies and accelerate the 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, UN Secretary-General Antonio Guterres spoke about the need for better access to finance and a level playing field for SIDS.

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

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

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

A place for solar energy

It was a day of high-level discussions and international politics. Access to funding for SIDS will be a key topic throughout the conference. However, it is also clear that solar and renewable energy have a key role to play here in terms of financing. – said Gianni Chianetta, president of the Greening the Islands foundation magazine pw that the foundation sees SIDS as potential world leaders in renewable energy and aims to help promote 100% renewable energy on small islands.

It comes down to financing again, and Greening the Islands is currently focusing on creating case studies, starting with projects on the Mauritian Caribbean islands of Rodrigues and Curaçao, and later expanding to other islands – to help convince regional leaders and global investors of the value of clean energy and profitability of 100% renewable systems.

Greening the islands will also focus on cooperation between nations, with future plans even including exploring the possibility of interconnection via undersea cables, again to create demand on a scale that could interest large investors and improve the financial terms on offer.