||Central Bank Of Barbados
Good morning and a warm welcome to this, the first in our series of webinars that comprise our 2021 Domestic Financial Institutions Conference. This year we will have four sessions over the next few months, covering diverse areas such as financial stability, payments, and technology and customer service at financial institutions.
We have again adopted the virtual format that we introduced last year following the onset of COVID-19 as a means of staying engaged with our stakeholders and fulfilling our commitment to deepen discussions on financial sector issues. I do miss the face-to-face interaction to which we were accustomed before COVID, but this format does offer benefits that are absent from our traditional in-person sessions.
First, by spreading the conference over several days, we can have more robust discussions on specific issues as we dedicate more time to addressing a single issue each day.
Second, absent the traditional physical space constraints, the virtual format allows us to broaden our outreach and to involve more participants in our discussions.
For example, last year, our session on AML/CFT (Anti-Money-Laundering and Combatting the Financing of Terrorism) attracted more than 200 persons, and significantly more watched it when we posted it on our website and social media channels. That session demonstrated how we can tackle the issues that confront us by having dialogue among the varied stakeholders.
We believe that today’s session entitled “Increasing Household Investment in Renewable Energy: How the Financial Sector can Help” follows in that vein.
Our panel discussion is set against the backdrop of Barbados’ stated commitment to become fossil-free by 2030. It is an ambitious target, but to make substantial headway we need buy-in from all, including at the household level.
We believe that the faster the progress we make toward this goal, the more we will realise benefits for our economy. We need energy to help drive economic activity, but we cannot ignore the fact that, pre-COVID, the import bill for oil and other fuels exceeded $700 million. Volatile oil prices can destabilise the balance of payments and erode our foreign exchange reserves. Significant investment in renewables will therefore enable us to reduce our import bill and save valuable foreign exchange.
A vibrant renewable energy sector also has the potential for new, more sustainable jobs. The IMF has suggested that the green economy could result in “a job-rich recovery” post-COVID, creating employment in renewables, new infrastructure, and climate resilience. The International Labour Organisation also supports the Fund’s perspective and forecasts that a shift to a greener economy could create 24 million new jobs globally by 2030.
These forecasts are consistent with the great interest and energy in building out the green economy to address the issues associated with climate change. Given our own susceptibility to natural disasters, we in Barbados and the Caribbean have been making representations in international fora for support to build a more resilient and sustainable economy and society. We now need to demonstrate our commitment to do our part by ensuring that we embrace going green in all aspects of our lives.
New strategies sometimes create new challenges and we must therefore assess how we will manage those associated with moving entirely away from fossil fuels. As is the case with all systems, we must strengthen our contingencies to manage energy supply shortages and shortcomings in the event that the sun’s rays are temporarily dimmed in a fossil free environment. Just as we build up our international reserves for a rainy day, players in the energy sector will also need to create buffers on which they rely in these circumstances.
It is generally accepted that there are financial benefits to be derived by households that make the investment in renewables. Indeed, there is already anecdotal evidence of the positives. However, given the up-front costs, the question is how will we finance this transition? What role will financial institutions, which are currently awash with excess liquidity, play in ensuring that households can benefit? How can we as householders protect our investment?
Our panel will explore these issues and it is my hope that by the end of this session, the discussion will yield a greater understanding of the opportunities for financing and protecting investments in renewable energy systems among households.
By working together to optimise the opportunities and minimise the risks, we will advance our efforts toward becoming a less fossil fuel dependent, more resilient and greener nation.
Enjoy today’s session, stay safe and be sure to share your feedback on the session.
I thank you.