The Caribbean Develop-ment Bank (CDB) is in the process of developing its 2015-2019 Strategic Plan with broad-based focus being placed on economic development with minimal environmental impact and increased private sector participation.
These two initiatives tie into CDB President Dr Warren Smith’s emphasis on a “full frontal attack” on high energy costs in an address to the opening of the annual CDB Board of Governors meeting in Georgetown on Wednes-day. Addressing a closing press conference on Thurs-day at the International Conference Centre at Liliendaal, Smith however supplied no details on any agreed measures to tackle high energy costs in the Caribbean.
During the press conference held after the closing ceremony of the 44th Annual Meeting of the CDB Board, Smith stated that the current generator plants in the region were approaching a state where operational standards would be challenged. He stated that apart from making the move to cheaper energy sources there was the opportunity to renew the current plants that already exist though private investments.
Smith stated that there was a “package of investments” that needed to be made if the Caribbean was to address the potential reduction in energy costs when asked by Stabroek News about the way forward in producing real results.
He stated that in his opening ceremony speech on Wednesday he was highlighting that there was need to facilitate opportunities for private investments especially in terms of energy advancement. It was revealed that US$1.5 million was designated by the CDB for the Secretariat of the Organisation of Eastern Caribbean States to develop energy efficiency and energy awareness strategies and to support legislative reform in the Eastern Caribbean.
Smith shied away from answering when asked if the funding was being given to states which have proven more receptive to encouraging energy reform through private investments. Instead he said “we are trying to create the environment that is conducive to private investments in the electricity industry” which is the goal designed under the project funding.
This newspaper did inquire if Guyana was not considered a recipient of such funding because the environment was not agreeable, however the CDB president did not expand on the matter. He made it clear that throughout the Caribbean, prior to extensive energy reform, there needed to be a receptive environment from which real transitions can be made. He noted that certain measures had to be put in place before private investment materialised
Smith spoke about the problems but offered very little in terms of steps that were already being discussed or would be in the future. He had spoken at length on the issue at the opening ceremony of the forum where he highlighted that the varying energy costs throughout the Caribbean needed to be addressed and this could be done through cohesive legislative reform powered by cooperation among regional members.
Outgoing Chairman of the CDB, Guyana’s Finance Minister, Dr Ashni Singh, highlighted the areas in which the Strategic Plan would be driven towards such as supporting further integration to resolve the mutual challenges that are faced throughout the region.
Smith had noted previously that to radically transform the energy generation landscape the investment requirements could exceed US$20B. He had stated that the myth of the Caribbean being “energy poor” needed to be ended and added that “the energy challenge is not a new one! We have known about it for at least 40 years, since the first oil shock in 1973. What is clearer today is that we do not need to continue as helpless victims of the vagaries of the international oil markets. Nor do we have to remain uncompetitive because electricity prices are like an albatross around our necks.”
The CDB president had noted that the legislative and regulatory environment in the region was a major hindrance to the pursuit of a “new energy paradigm,” calling them two priority areas that warrant urgent government action.
When questioned by the media if corruption continues to be a real barrier to furthering energy reform especially in the case of Guyana, Smith stated that there is not a single country in the world that does not have to deal with corruption issues. He noted that he was not in a position to comment on whether or not Guyana had requested any technical assistance which is provided by the CDB when the perception of corruption is prevalent.
Smith noted that it was the obligation of all states to continuously adopt measures to reduce the incidences of corruption. He stated that the CDB’s mandate was to be providing assistance whenever needed including when countries may require help with debt management. He said that when dealing with projects the bank is committed to measuring value for money through a series of assessments including risk management.
The head of the CDB pointed out that there is no one policy action that can take place to address the various concerns that the region is facing. One of the priorities of the 2015-2019 Strategic Plan will be an emphasis placed on technical assistance, and not just financial, which will aim at stemming the high levels of debt throughout the region and encourage investment opportunities regionally.
Expanding on the projected role of the private sector, Smith had said in his closing remarks:
“CDB has been exploring new and different avenues to reach the private sector in the BMCs (borrowing member countries), and is in the process of revising its private sector policy and strategy to support new initiatives in private sector development and operations. Having strengthened its risk management framework, CDB now sees an opportunity to engage more directly with the private sector by working with other institutions, like the International Finance Corporation in order to expand its private sector portfolio.
“Interest in public private partnerships (PPPs) as a mechanism to fund social and economic infrastructure projects has been growing. Early experiences have been mixed; and costly mistakes have been made. Against this backdrop, the PPP seminar held yesterday provided a platform to discuss best approaches to structuring PPPs and to build on early lessons.
“CDB will continue to strengthen its internal capacity for private sector financing as well as capacity within the BMCs to foster successful PPP ventures, in the future.”