BRIDGETOWN, Barbados, CMC—The Barbados-based Caribbean Development Bank (CDB) said Monday it has taken a significant step toward advancing regional geothermal energy development.
The CDB said that it had signed £10 million (One GBP = 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 signing this agreement represents a significant milestone in the Caribbean’s transition to a cleaner, more sustainable energy future, positioning Grenada and the broader 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 utilizing 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 program. This would enable deeper and broader drilling at the same site, improving 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 Grenada’s geothermal resources could support a 15-megawatt power plant.
This indicative potential must be confirmed through test drilling, which is currently underway, followed by production drilling. If successful, the project could reduce the country’s reliance on diesel by up to 55 percent. Grenada’s primary geothermal prospects are near Mount Saint Catherine, the island’s highest point.
The CDB said that its Geo Smart Initiative mobilizes 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 in addition to 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 US$17 million has been approved for St. Kitts-Nevis to drill 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.
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