Small island economies in the Caribbean are transforming energy vulnerabilities into investment opportunities through blended finance, hybrid systems, and corporate consolidation, exemplified by Dominica’s geothermal project and Bahamas’ hybrid solar initiatives.
Small island economies in the Caribbean are converting longstanding energy vulnerabilities into investment opportunities by combining concessional finance, hybrid technologies and scaled corporate transactions to lower costs, shore up grids and attract private capital.
The most concrete demonstration of that shift is Dominica’s 10 MW geothermal project, which reached financial close in September 2025 under a blended financing package arranged by the Caribbean Development Bank. According to a CDB statement, the deal includes USD 34.8 million in concessional funding from the Green Climate Fund, Canada’s Supporting Resilient Green Energy (SuRGE) programme and the CARICOM Development Fund. Developed by the Geothermal Power Company of Dominica, a subsidiary of Ormat Technologies Inc., the plant is expected to supply a substantial portion of Dominica’s baseload demand with zero‑carbon power once operational. The project follows a 25‑year power purchase agreement Ormat signed with Dominica Electricity Services Ltd. in December 2023 and, according to the CDB, marks the first regional geothermal initiative to involve a private sector partner. Industry participants say the package illustrates how layered risk‑sharing and concessional capital can clear bankability hurdles that have delayed geothermal development across the region.
Hybrid systems are emerging as a pragmatic bridge where baseload geothermal or large transmission builds are impractical. In December 2025 Renugen Pro Limited launched more than USD 40 million of hybrid projects across Cat Island, Long Island and San Salvador in The Bahamas, integrating solar PV, battery storage and natural gas generation under long‑term arrangements with the government and Bahamas Power and Light. Local reporting notes engineering, land preparation and front‑end design are under way, with commissioning targeted over the next couple of years. The projects are explicitly designed for severe‑weather resilience, seeking to cut outages and displace diesel while providing modern, decentralised power in islands where traditional grid expansion is costly.
Corporate consolidation is another sign that investors see scalable returns in Caribbean renewables. In July 2025 TotalEnergies expanded its partnership with AES by acquiring a 50% stake in AES Dominicana Renewables Energy’s portfolio of solar, wind and battery energy storage systems, creating a combined Caribbean portfolio exceeding 1.5 GW. TotalEnergies had earlier taken a 30% stake in AES’s Puerto Rico assets. Press releases from TotalEnergies and sector reporting note the Dominican Republic portion alone includes over 1 GW of contracted wind, solar and BESS projects, with roughly 410 MW operational or under construction. For investors, such transactions spread market and construction risk across multiple islands and create investable, scaleable platforms.
Despite these advances, material risks persist. Small island states still confront financing gaps, fragile grids, regulatory fragmentation and high costs of capital. Hurricanes and other disasters can destroy years of infrastructure in hours, and project returns remain sensitive to fuel price volatility, currency exposure and the strength of off‑takers. Government procurement, credible power purchase agreements and clear pathways for private participation remain decisive for project bankability. Industry and multilateral sources point to reforms underway in jurisdictions such as Jamaica and Barbados and to regional efforts to harmonise standards and accelerate project readiness as essential to converting pipelines into investable assets.
For investors and developers, the emerging playbook is therefore threefold: use concessional and blended finance to absorb early‑stage and political risk; deploy hybrid and modular technologies to reduce capital intensity and increase resilience; and pursue aggregation or platform‑level deals to deliver scale and liquidity. According to regional bank communications and corporate statements, the Dominica geothermal close and TotalEnergies‑AES portfolio transaction provide practical examples of each strand.
The inaugural Caribbean Energy Week in Paramaribo will convene policymakers, financiers and developers to discuss risk allocation, project preparation and financing innovation, and to showcase cases from Dominica and The Bahamas. For stakeholders focused on industrial decarbonisation, the region offers an instructive laboratory: projects that reduce operational costs and fuel exposure, while delivering resilience, can be made investable when finance is tailored to island realities and when policy frameworks and procurement are credible and consistent.
- https://energycapitalpower.com/caribbean-islands-turn-energy-vulnerability-into-investment-opportunity/ – Please view link – unable to able to access data
- https://www.caribank.org/newsroom/news-and-events/cdb-marks-major-milestone-financial-close-dominica-geothermal-energy-project – In September 2025, the Caribbean Development Bank (CDB) achieved a significant milestone by reaching financial close on the 10 MW geothermal energy project in Dominica. This project, developed by the Geothermal Power Company of Dominica (GPC), a subsidiary of Ormat Technologies Inc., is the first geothermal initiative in the region to involve a private sector partner. The financing package includes USD 34.8 million in concessional funding, with contributions from the Green Climate Fund (GCF), Canada’s Supporting Resilient Green Energy Initiative in the Caribbean (SuRGE) programme, and the CARICOM Development Fund (CDF). The plant is expected to supply a substantial portion of Dominica’s baseload demand with zero-carbon power upon becoming operational. ([caribank.org](https://www.caribank.org/newsroom/news-and-events/cdb-marks-major-milestone-financial-close-dominica-geothermal-energy-project?utm_source=openai))
- https://totalenergies.com/news/press-releases/caribbean-totalenergies-expands-its-partnership-aes-lng-renewable-energy – In July 2025, TotalEnergies expanded its longstanding partnership with AES by acquiring a 50% stake in AES Dominicana Renewables Energy’s portfolio of solar, wind, and Battery Energy Storage Systems (BESS) in the Dominican Republic. This acquisition follows TotalEnergies’ earlier purchase of a 30% share in AES’s solar and battery assets under construction in Puerto Rico. The combined portfolio now exceeds 1.5 GW of renewable energy and BESS capacity across the Caribbean, with the Dominican Republic portion including over 1 GW of contracted wind, solar, and BESS projects, of which 410 MW are operational or under construction. ([totalenergies.com](https://totalenergies.com/news/press-releases/caribbean-totalenergies-expands-its-partnership-aes-lng-renewable-energy?utm_source=openai))
- https://www.tribune242.com/news/2025/dec/12/40m-hybrid-energy-project-launched-for-three-family-islands/ – In December 2025, Renugen Pro Limited launched hybrid energy projects across Cat Island, Long Island, and San Salvador in The Bahamas, with a combined value of over $40 million. These projects integrate solar photovoltaic (PV) systems, battery storage, and natural gas generation to provide reliable, modern power in areas where traditional grid expansion is challenging. The systems are designed to withstand severe weather, aiming to reduce outages and diesel dependence. Engineering, land preparation, and front-end design are underway, with commissioning targeted over the next couple of years. ([tribune242.com](https://www.tribune242.com/news/2025/dec/12/40m-hybrid-energy-project-launched-for-three-family-islands/?utm_source=openai))
- https://investor.ormat.com/news-events/news/news-details/2023/Ormat-Signed-Historic-25-Year-Power-Purchase-Agreement-With-Dominica-Electricity-Services-Ltd/default.aspx – In December 2023, Ormat Technologies Inc. signed a 25-year Power Purchase Agreement (PPA) with Dominica Electricity Services Ltd. (DOMLEC) for the development of a 10 MW binary geothermal power plant in Dominica’s Roseau Valley. The project is expected to be operational by the end of 2025. This agreement follows the successful development of the geothermal reservoir in the Roseau Valley by the Government of the Commonwealth of Dominica. Upon completion, ownership of the power plant will be transferred to the Government of Dominica. ([investor.ormat.com](https://investor.ormat.com/news-events/news/news-details/2023/Ormat-Signed-Historic-25-Year-Power-Purchase-Agreement-With-Dominica-Electricity-Services-Ltd/default.aspx?utm_source=openai))
- https://www.nsenergybusiness.com/news/totalenergies-divests-portuguese-renewable-assets-acquires-them-in-dominican-republic/ – In July 2025, TotalEnergies expanded its renewable energy presence in the Caribbean by acquiring a 50% stake in AES Dominicana Renewables Energy’s portfolio of solar, wind, and Battery Energy Storage Systems (BESS) in the Dominican Republic. This acquisition follows TotalEnergies’ earlier purchase of a 30% stake in AES’s solar and battery assets under construction in Puerto Rico. The combined portfolio now exceeds 1.5 GW of renewable energy and BESS capacity across the Caribbean, with the Dominican Republic portion including over 1 GW of contracted wind, solar, and BESS projects, of which 410 MW are operational or under construction. ([nsenergybusiness.com](https://www.nsenergybusiness.com/news/totalenergies-divests-portuguese-renewable-assets-acquires-them-in-dominican-republic/?utm_source=openai))
- https://www.ainvest.com/news/totalenergies-caribbean-renewable-expansion-strategic-play-high-growth-markets-2507/ – In July 2025, TotalEnergies expanded its Caribbean renewable energy portfolio by acquiring a 50% stake in AES Dominicana Renewables Energy’s portfolio of solar, wind, and Battery Energy Storage Systems (BESS) in the Dominican Republic. This acquisition follows TotalEnergies’ earlier purchase of a 30% stake in AES’s solar and battery assets under construction in Puerto Rico. The combined portfolio now exceeds 1.5 GW of renewable energy and BESS capacity across the Caribbean, with the Dominican Republic portion including over 1 GW of contracted wind, solar, and BESS projects, of which 410 MW are operational or under construction. ([ainvest.com](https://www.ainvest.com/news/totalenergies-caribbean-renewable-expansion-strategic-play-high-growth-markets-2507/?utm_source=openai))
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative references the financial close of Dominica’s 10 MW geothermal project in September 2025, with commissioning starting in December 2025 and commercial operations expected by March 2026. This timeline aligns with recent reports from the Caribbean Development Bank and other reputable sources. The content appears to be current and not recycled. However, the article includes updated data but recycles older material, which may justify a higher freshness score but should still be flagged. ([caribank.org](https://www.caribank.org/newsroom/news-and-events/cdb-marks-major-milestone-financial-close-dominica-geothermal-energy-project?utm_source=openai))
Quotes check
Score:
7
Notes:
The article includes direct quotes from officials such as Isaac Solomon, Vice President of Operations at the Caribbean Development Bank, and Rodinald Soomer, CEO of the CARICOM Development Fund. These quotes are consistent with statements made in official releases from these organisations. However, the exact wording varies slightly across sources, indicating potential paraphrasing. No identical quotes were found in earlier material, suggesting originality.
Source reliability
Score:
6
Notes:
The narrative originates from Energy Capital & Power, a platform focusing on energy industry news. While it provides detailed information, the platform’s reputation and editorial standards are not widely recognised, which raises questions about its reliability. The article cites reputable organisations like the Caribbean Development Bank and CARICOM Development Fund, lending some credibility.
Plausability check
Score:
8
Notes:
The claims about Dominica’s geothermal project are consistent with information from multiple reputable sources, including the Caribbean Development Bank and CARICOM Development Fund. The timeline and financial details align with official statements. The language and tone are appropriate for the topic and region, with no inconsistencies noted.
Overall assessment
Verdict (FAIL, OPEN, PASS): OPEN
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The narrative presents current information about Dominica’s geothermal project, with quotes matching official statements. However, the source’s reliability is uncertain due to its limited recognition. While the content appears plausible and consistent with other reports, the source’s credibility warrants further verification.
