Blended Finance for Geothermal Development, Caribbean Region

Client needs

Eastern Caribbean islands have massive geothermal resources that they were not developing due to drilling risk, lack of capacity, and concerns about off-taker credit risk.

How Castalia helped

• Expanded the Sustainable Energy Facility to include drilling risk and support for geothermal energy, adding $86 million to the facility
• Prepared grant and loan transactions to finance geothermal projects
• Assessed the legal, regulatory, financial, and technical aspects of geothermal projects that sought SEF funding
• Helped structure and negotiate a geothermal project with a private developer and lenders
• Built the CDB’s capacity to execute the SEF.

The outcome of our work

In 2018, the SEF contributed $20 million in funding for geothermal exploration, drilling, and capacity building in the region. The SEF recently provided $17 million in financing for a 40MW geothermal drilling project in Nevis Island; the project was tendered late 2022 and the first well will be drilled in June 2023.