COMMITMENT TO ACTION

Investing in Caribbean Renewable Energy for Impact

Commitment by MPC Capital

In 2020, MPC Capital AG (MPC) committed to engage U.S.-based impact investors, institutional investors, and foundations to raise and invest $90,000,000 USD in 10-15 renewable energy projects in the Caribbean over the next two years. One of the key barriers to the deployment of renewable energy in the Caribbean is access to capital. While international investors are well-placed to fill this gap, single projects in the region are often unattractive in international markets because of their small size. Through this commitment, MPC will deploy a new strategy to engage U.S.-based investors in blended finance approaches to renewable energy projects in the region, creating 20 permanent jobs, 1,450 temporary jobs, and generating 200,000 kW capacity of renewable energy. Alongside these investments, MPC will reach an additional 1,000 people with training and capacity building opportunities to build the pipeline of workers in renewable energy and support an enabling policy and regulatory environment for blended finance in the Caribbean.



Overview
Summary

Commitment

Investing in Caribbean Renewable Energy for Impact

Launched

2020

Est. Duration

2 Years

Estimated Total Value

$90,000,000

Region

Latin America & Caribbean

Countries

ANGUILLA; ANTIGUA AND BARBUDA; ARUBA; BAHAMAS; BARBADOS; BELIZE; BRITISH VIRGIN ISLANDS; CAYMAN ISLANDS; DOMINICA; DOMINICAN REPUBLIC

Commitment by

MPC Capital

Partner(s) of the Commitment Maker(s)

Details

MPC Capital AG (MPC) commits to engaging U.S.-based impact investors, institutional investors, and foundations in the transition to renewable energy in the Caribbean. In total, MPC and its partners will raise and invest $90,000,000 USD in 10-15 renewable energy projects in the Caribbean over the next two years.

To date, MPC has secured $27,000,000 USD of this fund. To raise the remaining $63,000,000, MPC will utilize a new strategy to engage U.S. based impact investors. MPC will develop materials specific for this audience, including the impact case for renewable energy investment in the Caribbean region. The capital raising team will lead tailored convenings to raise awareness of MPC and its activities, and will participate in conferences, roundtables, and relationship-building with the impact investment and foundation community in the U.S.

The fund will support the implementation of up to 15 renewable energy projects across the Caribbean, including onshore wind, solar PV, and distributed solar PV projects, as well as energy efficiency projects. In total, these projects are expected to create 20 permanent jobs and 1,450 temporary jobs and generate over 200,000 new Kilowatt (kW) capacity of renewable energy.

Alongside these investments, MPC will undertake capacity-building activities and education programs in three key areas. First, MPC will support local universities, technical training colleges, and schools with training and curriculum to build the pipeline of workers for renewable energy projects, reaching a total of 250 individuals. Second, approximately 500 people will receive disaster preparedness and response training, and each site will develop a comprehensive emergency preparedness plan. Fourth, MPC will work with partners to engage approximately 500 high-level actors in the energy and finance system (50 through each project) on how to create an enabling environment for blended finance in renewable energy.

MPC will apply a gender equality lens at every step in the lifecycle of each project. MPC commits to hire and train 294 women (20% of the total projected permanent and temporary jobs) into the renewable energy field and continue this focus on gender in the capacity building activities described above, ensuring that girls and women are accounted for equitably in all capacity building activities.

2020 Activities
Q1: Project inception
Q2: Identify capital partners and impact specialists. Undertake capital raising and strategic partnership-building through tailored convenings, participation in conferences and roundtables, and other relationship-building and engagement activities.
Q3: Continue capital raising. Build network of impact investors and related engagement activities. Continue to develop the impact case for the renewable energy projects.
Q4: First financial close. Fine tune the impact case and design impact measures, including gender equality approach to hiring and capacity building. Secure MPC board approval. Begin all capacity building activities.

2021 Activities:
Q1: Reporting on Year 1
Q2: Project deployment in the Dominican Republic, Barbados, Jamaica
Q3: Project deployment in energy efficiency in Jamaica and Trinidad & Tobago
Q4: Project deployment and launch of full impact measurement and monitoring system. Disaster preparedness planning and training begins.

2022 Activities:
Q1: Reporting on Year 2
Q2: All 10-15 sites identified and capital allocated. Project deployment and impact measurement continues.
Q3: Develop showcase and storytelling materials.
Q4: Final reports and assessment of approach

Project deployment should continue after the period of this commitment. The two-year period will focus on raising and allocating capital to the 10-15 projects.

Background

The Caribbean region is heavily dependent on fossil fuels for electricity generation with 92% of energy generated from these sources, accounting for 99% of the greenhouse gas (GHG) emissions (Global Solar Atlas, 2020). Electricity access is provided by entities that offer low quality of service at high cost. Energy generation and transmission is typically organized in vertically integrated, publicly owned companies that are plagued with deteriorating equipment and high technical and non-technical losses. In several countries, non-payment for electricity services makes electricity more expensive for those who pay and hinders the profitability and sustainability of utilities. These conditions limit and discourage investment in new energy infrastructure, making expansion, repair, and development more difficult.

A key barrier for the deployment of renewable energy in the Caribbean region is the access to capital. International development partners and regional bodies such as CARICOM have sought to encourage and scale up private financing to roll out low cost, clean energy infrastructure, noting that it is likely that most capital will com`e mainly from international private capital markets rather than domestic sources. Local financial institutions lack the experience or expertise to invest directly in renewable energy projects, and the domestic capital markets in the Caribbean are similarly ill-suited to encourage investment in non-traditional activity and private equity modes. International investors are apt to fill these gaps, but single projects in the region are often unattractive in international markets because of their small size.

The Caribbean region is endowed with abundant solar and wind resources, and there is strong political will for a broad transition to renewable energy. Now more than ever there is an incredible opportunity to socialize and encourage international private investment in renewable energy projects in the region. With the right set of approaches – including education and awareness-raising, relationship building with all levels of financial institutions, and the deployment of projects with robust and widespread social impact goals – international investors can find both economic and social returns in the renewable energy sector in the Caribbean.

Partnership Opportunities

MPC Capital AG (MPC) has raised an initial $27 million dollars and seeks to raise $63 million dollars to scale its deployment across the entire Caribbean Basin, with a focus on the CARICOM region. MPC also seeks support to design and implement regulatory strengthening initiatives, as well as critical training for renewable energy professionals and other stakeholders to build the pipeline of workers in the sector and support the broader finance and energy ecosystem on each impacted island. In particular, MPC is looking for partners interested in collaborating to strengthen social impact and measurement. MPC also seeks media support to spread awareness of its activities. MPC Capital AG (MPC) provides international expertise in raising capital, asset management, and project development in the renewable energy and energy efficiency domains. Its efforts have already generated more than $25 million for project deployment. There is a full-fledged professional team dedicated to this commitment with comprehensive and thorough processes for full scale project design, development, monitoring, ongoing asset management, and governance.

Progress Reports