ImpactAlpha, Mar. 3 – For all their solar and wind, the Caribbean islands largely depend on high-cost fossil fuels and state-owned utility monopolies. A shortage of capital has blocked the rollout of cleaner and lower cost energy infrastructure.
German real assets manager MPC Capital has tapped domestic Caribbean investors for the first $27 million of its new Caribbean Clean Energy Fund. As part of a Clinton Global Initiative commitment, the firm aims to raise another $63 million from U.S.-based impact investors, institutions and foundations.
“The Caribbean region is underserved and overlooked,” says Resilience Capital Ventures’ Gillian Marcelle, who is advising MPC. The islands are fragmented and the deals may be small, she says, but renewable infrastructure represents “a good business opportunity if you are willing to be patient.”
The fund aims to return a 12% annual return. Caribbean investors and institutions include the Jamaica National Group, Caribbean insurer Sagicor, the Development Bank of Jamaica and Teachers Credit Union of Trinidad and Tobago.
Clean energy pipeline. The Caribbean Clean Energy Fund has backed two projects including Paradise Park, a 51-megawatt solar park in Jamaica that has secured $50 million in project financing from French and Dutch development banks PROPARCO and FMO. The second project is Tilawind, a 21-megawatt wind farm in Tilarán, Costa Rica. More than a dozen solar, wind and efficiency projects in the pipeline require investments in the hundreds of millions.
Impact lens. Through a ‘blended finance’ strategy, MPC will support capacity-building activities and education programs to recruit and train 250 workers for renewable energy and 500 people in disaster preparedness, and will work with 500 high-level actors to create an enabling environment renewable energy finance. Women will be a focus of each activity.