(CMC) – The Barbados-based Caribbean Development Bank (CDB) Monday said it has taken a significant step towards advancing geothermal energy development in the region.
The CDB said that it has signed £10 million (One GBP =US$1.29 cents) Memorandum of Understanding (MoU) with the United Kingdom’s Foreign, Commonwealth & Development Office (FCDO), and the Grenada government to support that country’s geothermal test drilling.
The region’s premier financial institution said that the signing of this agreement represents a significant milestone in the Caribbean’s transition to a cleaner, more sustainable energy future, positioning Grenada and the wider region as leaders in renewable energy innovation.
Prime Minister Dickon Mitchell said that the multi-million dollar investment from the United Kingdom government is a significant milestone in Grenada’s pursuit of a sustainable and resilient energy future.
“By harnessing our geothermal potential, we are taking a bold step towards reducing fossil fuel dependence, enhancing energy security, and creating economic opportunities for our people. This partnership reaffirms our unwavering commitment to a cleaner, more sustainable future,” he added.
CDB’s Vice-President of Operations, Isaac Solomon, said the agreement reflects the strong collaborations driving the Caribbean’s sustainable energy transition.
“CDB welcomes the continued support of its development partner, FCDO, and looks forward to utilising these funds as part of the Bank’s GeoSmart Initiative to enhance Grenada’s Geothermal Drilling Project.
“With Grenada’s commitment to advancing its geothermal development, this funding will help unlock sustainable, indigenous energy sources, strengthening energy security and resilience,” he added.
In 2023, CDB approved US$9.4 million for the Geothermal Drilling Project – Grenada, which includes drilling two exploratory wells to assess the island’s geothermal potential.
In early 2024, FCDO pledged an additional £10 million to expand the drilling programme, enabling deeper and broader drilling at the same site to improve the chances of accessing a commercially viable geothermal resource.
Geothermal energy, generated from heat beneath the Earth’s surface, provides a stable, 24-hour renewable energy source, unlike solar and wind power, which are variable. Surface studies suggest that Grenada’s geothermal resources could support a 15-megawatt power plant.
This indicative potential must be confirmed through test drilling, currently underway, followed by production drilling. If successful, the project could reduce the country’s reliance on diesel by up to 55 per cent. Grenada’s primary geothermal prospects are located near Mount Saint Catherine, the island’s highest point.
The CDB said that through its Geo Smart Initiative, it mobilises resources through strategic partnerships, and provides financing and technical assistance to unlock geothermal potential, strengthen energy security, and enhance regional climate resilience.
The CDB said that beyond Grenada, other islands in the Eastern Caribbean are also benefiting from funding under GeoSmart.
In 2024, CDB approved a US$34.8 million loan to fund the construction of a 10-megawatt geothermal power plant in Dominica, while funding of US$17 million has been approved for St. Kitts-Nevis towards the drilling of production wells on the island of Nevis. CDB previously provided US$27 million to support the now completed geothermal exploration in St. Vincent and the Grenadines.
