storm clouds over sea

The Caribbean Climate Smart Fund

The Need

Most Caribbean island nations have a tumultuous relationship with traditional, fossil fuel–based electricity.

It is unreliable — causing power outages during climate-intensified hurricanes.

It is costly — stunting local economic growth.

And it is unpredictable — due to its dependence on volatile fuel prices.

While the region has seen an increase in climate finance and local interest to transition to clean energy, more than 44 million people in the Caribbean still rely on fragile, fossil-based electricity systems.

Why? The majority of island clean energy projects fail in the “project preparation” stage. In short, the project funding is there, but more work needs to be done to effectively get solar panels on roofs and steel in the ground to build real resilience.

The Opportunity

Addressing project bottlenecks provides the opportunity to transform livelihoods through clean energy. From Trinidad to The Bahamas, the Caribbean Climate Smart Fund (CCSF) is designed to:

  • Reduce environmental footprint: Eliminate 240 million metric tons of CO2 equivalent annually — an impact equal to removing over 51 million vehicles from the road per year
  • Gain control of electricity prices: Save US$24 billion annually and reduce price volatility
  • Bolster climate resilience: Install stormproof energy systems to provide consistent power for hospitals, telecommunications, and other facilities that are critical during and after extreme storms
  • Increase quality of life: Create well-paying, local jobs and enhance air quality

How It Works

The goal of the CCSF is to unleash the energy transition at scale—creating lasting change in project development, preparing investor-ready projects, and integrating energy justice at a project level. The CCSF aims to become a $15 million Project Preparation and Development Facility (PPDF) led by RMI Islands and a $150 million investment fund, with an initial target of $75M, led by an investment fund manager.

The PPDF systemically de-risks and prepares energy projects across Caribbean nations for investment. It does so by creating certainty around the financial and technical feasibility of projects—supporting utilities and project developers in securing commercial financing and bringing projects online, while building their capacity to scale this work independently in the future. Canada recently announced its multi-million-dollar support for the PPDF, progressing the reach and impact of these efforts.

The investment fund will comprise a diversified portfolio of utility-scale renewable energy projects, distributed microgrids (often supporting critical facilities), and energy efficiency projects.

General support will be spread across more than a dozen Caribbean islands,* with Canada’s funding initially focused in several jurisdictions. The CCSF will evaluate projects — for project preparation support and potential investment — based on five critical criteria: financial sustainability, equity, resilience, emissions reductions, and alignment with island priorities.

Case Studies of Impact

Inspiring Global Efforts

RMI’s Catalytic Climate Capital team was recently established to support global PPDF efforts to mobilize capital in the Global South. Our mission is to scale the Caribbean PPDF model within the region and to Sub-Saharan Africa and Southeast Asia—with the goal of a 10 GW (about five times the generation capacity of Trinidad and Tobago) renewable energy, energy efficiency and energy storage project pipeline within three years.

What Your Support Means

Across the clean energy projects RMI and local partners have prepared to date and those that have been identified as a pipeline of next projects, every dollar donated to project preparation unlocks $41, on average, in project investment for implementation. This means we can build climate resilience in the Caribbean faster and more effectively.

For more details on the Caribbean Climate Smart Fund goals and structure, please contact our islands team at islands-outreach@rmi.org.

* Island nations include Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Dominica, Grenada, Guyana, Jamaica, Montserrat, Saint Lucia, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, Turks and Caicos Islands, and the US Virgin Islands.