AIC Caribbean Fund: Investing in renewable energy

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Site: Dominican Republic
Sector: Power

Challenge: The Dominican Republic has significant natural resources such as lush tropical forests and pristine beaches. But this island nation lacks what many advanced economies have relied upon for stability, jobs, and growth: an abundance of readily accessible fossil fuels. Its geography and location make it twice as reliant as the United States on oil imports, measured as a percentage of GDP.

As a result, Dominicans, nearly half of whom live below the global poverty line, have been highly susceptible to price shocks that affect everything from gasoline prices to the cost of food. Their economy has not been able to draw upon a robust energy sector to create jobs and import technological know-how.

Solution: Amid the oil price spikes of the late-2000s, the Dominican Republic enacted a far-reaching law and package of tax abatements to pave the way for the development of renewable energy generation, setting a national target of having 25 percent of its energy generated from renewable sources by 2025. In 2011, OPIC provided financing to the AIC Caribbean Fund, which financed the construction by InterEnergy Holdings, of the first wind turbine farm in the nation, a mid-scale, grid-connected facility capable of generating 25.2 megawatts.

Impact: At peak operation, the wind facility is capable of offsetting as much as 62,500 tons of carbon dioxide (CO2) annually -- tantamount to taking more than 13,000 automobiles off the road. The project helped prove the viability of wind energy in the Dominican Republic, which today is on track to have 300 megawatts of installed capacity from wind turbines by the end of 2016.

Construction of the facility, located in a southwestern province of Pedernales, has helped create jobs in a poor rural area and Interenergy supported the community in several additional ways. It provided free energy to the small village, Juancho-Los Cocos, within its concession area, as well as to municipal offices, police facilities and fire stations. It also helped start educational initiatives to teach students and local residents about clean energy, wildlife preservation and protection of ecosystems.

This project was profiled in 2014