MIGA has issued guarantees to KLED Capital and CIFI LATAM to support installation, operation, and servicing of a modernized streetlights network in Saint Lucia.
The project consists of replacing all 22,000 of the island's sodium streetlights with LEDs and installing 2,460 new LED streetlights.
This will lead to a greenhouse gas (GHG) emission reduction of 5,000 tons of carbon dioxide equivalent (CO2e) per year while increasing light levels by over 30 percent across the road network.
MIGA's guarantees totaling $11.7 million are covering an equity investment by KLED for 15 years and an eight-year loan to KLED from CIFI LATAM.
Saint Lucia depends heavily on imported petroleum products to power its economy and has among the highest electricity tariffs in the world.
The government of Saint Lucia is working to transition to a lower-carbon economy and undertake initiatives to promote climate resilience and energy efficiencies. This project is an important initiative that is consistent with the government's climate change policy and demonstrates its commitment to increase energy efficiency that reduces the country's carbon footprint.
"This first project MIGA is supporting in Saint Lucia will help the country meet its national climate targets," said MIGA Executive Vice President Hiroshi Matano. "Replacing streetlights with energy-efficient LEDs will complement Saint Lucia's efforts to increase the energy efficiency of public buildings and explore renewable energy resources."
With the installation of energy-efficient LEDs, the project will reduce streetlight electricity consumption by 68.9 percent. Energy savings from the LED streetlights are estimated to be about 6.8 GWh per year, corresponding to monetary savings of about $2.3 million per year, which will enable the government to focus on other development initiatives.
"High electricity prices have a negative effect on businesses and people in Saint Lucia," said Lilia Burunciuc, World Bank Director for the Caribbean Countries. "Reducing dependency on oil imports and decreasing the country's vulnerability to the volatility of fuel markets, while increasing energy efficiency, is a smart investment."
The KLED project to replace and expand the nationwide network of streetlights with energy saving LEDs makes Saint Lucia one of the first countries in the Caribbean to modernize its entire public street lighting network, serving as a model to others. It is a step toward meeting targets submitted to the United Nations of a 16 percent reduction in GHG emissions by 2025, and a 23 percent reduction by 2030. The LED streetlights will be installed over a period of 18 months. During the replacement process, toxic sodium found in the existing streetlights will be properly disposed of and recycled to prevent environmental harms.
KLED Group Chief Executive Richard Burdon said: "KLED is delighted to be the first company in Saint Lucia to partner with MIGA. We are pleased to be able to undertake this project to the benefit of every Saint Lucian citizen. While we have operated extensively in Europe, this is also our first venture in an emerging market, especially in a Small Island Developing State. MIGA's long-term guarantees for the KLED equity investment and our project financing from CIFI LATAM are crucial for the successful delivery of this nationally important project. MIGA's environmental, social, and health and safety support has been also invaluable."
The nationwide streetlight project is funded entirely by KLED's equity investment supported by CIFI LATAM's project finance loan and paid for by the government from the energy savings.
"CIFI continues to be an active player in the structuring and financing of projects within the region," said CIFI CEO César Cañedo-Arguelles. "We are delighted to have collaborated with MIGA and KLED for such an important project in Saint Lucia. We are excited to continue with more; we foresee a bright future."
SOURCE: Multilateral Investment Guarantee Agency
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