Small island economies have long faced a dual challenge: high electricity costs and heavy reliance on imported fossil fuels. Recent projects are showing how cleaner, more resilient energy systems can be financed and scaled, and what that means for investors navigating risk in these markets.
In Dominica, the long-anticipated 10 MW geothermal project reached financial close in September 2025, backed by a blended package arranged by the Caribbean Development Bank. Concessional capital from the Green Climate Fund and partner institutions helped move the project past bankability hurdles that have stalled geothermal in the Caribbean for years. Developed by a subsidiary of Ormat Technologies, the plant is expected to supply most of Dominica’s baseload demand with zero-carbon power once operational. More importantly, it demonstrates how layered risk-sharing and concessional finance can make complex island projects investable without straining public finances.
Hybrid systems are also emerging as a pragmatic bridge. In The Bahamas, Renugen Pro Limited is preparing more than $40 million in hybrid energy projects across Cat Island, Long Island and San Salvador, combining solar PV, battery storage and natural gas generation under long-term power purchase agreements with the government and Bahamas Power and Light. Designed to withstand severe weather, these systems aim to cut outages, reduce diesel dependence and provide reliable modern power in locations where traditional grid expansion is costly or impractical. Engineering, land preparation and front-end design are underway, with commissioning targeted over the next couple of years.
Corporate consolidation is another signal of confidence in Caribbean renewables. TotalEnergies’ expanded partnership with AES across the Dominican Republic and Puerto Rico – covering a 1.5 GW portfolio of solar, wind and battery storage – shows how multinationals are structuring assets to attract investment at scale while spreading risk across multiple markets. By acquiring a 50% stake in the combined portfolio, TotalEnergies signals confidence in long-term demand and the viability of island energy projects under stable contracts.
Despite progress, risks remain tangible. Small island states continue to face financing gaps, fragile grids, regulatory fragmentation and high costs of capital. Hurricanes and other disasters can erase years of investment in hours. Yet the returns from cleaner, more resilient energy systems extend beyond kilowatt-hours: reduced operational costs, insulation from fuel price volatility and stronger local economies make projects compelling for investors willing to engage with blended finance and risk mitigation strategies. Transparent procurement rules, credible PPAs and clear pathways for private participation are essential to translating promising pipelines into investable projects. Islands like Jamaica and Barbados are advancing reforms, while regional institutions work to harmonize standards and accelerate project readiness.
The inaugural Caribbean Energy Week (CEW) in Paramaribo will bring policymakers, financiers and developers together to discuss risk allocation, project preparation, financing innovation and replication. The conference will highlight practical cases – from Dominica’s geothermal project to The Bahamas’ hybrid microgrids – while connecting stakeholders to the instruments needed to scale similar initiatives. In a region long defined by high energy costs and climate vulnerability, small island states are beginning to show how tailored finance, hybrid system deployment and coherent policy frameworks can convert risk into durable, attractive returns.
Join us in shaping the future of Caribbean energy. To participate in this landmark event, please contact sales@energycapitalpower.com.