 Hello and welcome to TV30, a production of the Government Information Service and the National Television Network. I am your host, Kenal Eugene. And with me this afternoon, we have Mr. Rodinal Souma, the Chief Executive Officer of the Karakum Development Fund, Mr. Souma. Welcome to the show. Thank you. Thank you very much. When we hear Karakum Development Fund and Renewable Energy, what should we think about? What should come to our minds? Well, if you'll allow me to step back a bit, because I think I need to put it in a broader context. The Karakum Development Fund was established by the Treaty of Shagaramas, particularly to help disadvantaged countries, regions and sectors, so that they would be better and able to take advantage of the Karakum Single Market and economy. So where renewable energy fits into that framework is that it has been identified as a sector in which countries that rely on fossil fuels at the country level but also at the business level are at a disadvantage because of the high costs of energy. And through our process of consultation with the member states of Karakum that have signed up to the CDF, we have been given the mandate to help small businesses in particular address their competitiveness challenges by helping them to reduce their operating costs. And one of the areas in which their operating costs is highest is in electricity use. So and I think it's important for me to indicate now that because we are a regional institution that operates within the Karakum system, there is a specific regional institution that deals with renewable energy and energy efficiency. As the Caribbean Center for Renewable Energy and Energy Efficiency, CICRI. So we have a partnership arrangement with CICRI through which we get support from them in executing our mandate in renewable energy. But we got into this business of renewable energy, particularly to help small businesses to reduce their operating costs. But as you know, because this is a major dimension of climate action dealing with mitigation arising from the use of fossil fuels and they need to mitigate the level of emissions, we have this dual objective that we are trying to achieve to help the region reduce emissions as well as working with CMEs to help them to reduce their operating costs in relation to energy use. Why is it important for us to reduce the amount of energy that we use? Of course, I've been hearing about it for such a long time, but we still have individuals who may not understand the importance of reducing that level of energy we use with fossil fuels, for example. Well, there are many reasons why we need to do it. Obviously there's an environmental benefit. It's a global issue. Even if our contribution in the region to greenhouse gases is much lower than the industrial countries, it's much, much lower. Because we are impacted by climate change, it's important for us to demonstrate that we are playing our part in helping with emissions reduction by working on the mitigation side. Also a lot of fuel is imported, so there's a foreign exchange drain from the importation of fuel. So it's important for us to use the resources that are available to us and also help to conserve foreign exchange. As I indicated earlier, because it's such a major element of operating costs for businesses, to the extent that we're able to help them to increase the efficiency of the energy use and to reduce the overall level of use of fossil fuel-based energy, then it also redounds to their benefit by way of increasing their competitiveness by lowering their operating costs. Happy you mentioned the benefit because that's where it's about to go. What benefits would one see if they were to start reducing on the costs and the energy that they use on a daily basis? One of the major benefits is cost savings. In fact, as we speak, the CDF has just finished hosting a forum here in St. Lucia, where we are trying to generate effective demand for investments in the energy sector. In the sustainable energy sector. We had quite a good turnout of small businesses because they saw the benefit of receiving the support from the CDF because they see it going straight to their bottom line through the cost savings that are generated by increased efficiency of energy use and also the deployment of renewable energy technologies to substitute for the use of fossil fuels. What types of business owners attended the forum? Do you know? Yes, yes. We had a cross-section of small businesses in St. Lucia. We had a particular drive to the agricultural sector and I'm pleased to know that quite a few agricultural agencies, cooperatives, as well as individual farmers and entrepreneurs actually came to the forum. I spoke to them personally and they're very interested in introducing new technologies that would help them save on energy costs. We had representation of manufacturing from retail and tourism, so there's quite a good cross-section of small businesses. Agriculture is a driving force in any island, any country, the world, and to hear that they attended and you're quite pleased that they attended the forum, what would you recommend for an individual that probably missed out on the forum but is watching the program now and hearing you, what do you recommend he or she should do to reduce the cost probably on their farm and what technologies should they look at to help them reduce the cost of the high cost of running their farm? Right. Well, we've had some experience implementing some agricultural projects that have renewable energy elements in them. For example, they could be looking at solar pumps, for example. Then there are a lot of innovative technologies in aquaponics. In fact, I was just speaking to one of the young entrepreneurs and he's saying that he's looking to scale up his operation by going vertical with high-tech solar-driven agriculture. So there are many opportunities that are available to the sector, especially young people that would see the benefit in getting into that type of agriculture rather than the sort of... More of the traditional. More of the traditional agriculture that we associate with drudgery and hard work. So there are a lot of opportunities and what we've done is that recently we've hired a program specialist focusing on sustainable energy who is reaching out to those potential clients and giving them the specific solutions to their problems, to the challenges that they face. One of the outcomes of the forum is that we were able to get a lot of the SMEs that attended, not just in agriculture, tourism, manufacturing, retail, to set up appointments for us to go to their establishments and do first-level energy audits to help them to determine the best technical solution for them in terms of renewable energy or energy efficiency. With the fund now, how can these individuals, these entrepreneurs, especially, tap into the CDF, where do they go, how do they get that information? Well, we've established a portal for the credit risk abatement facility, so they could visit that portal. Those that did not attend, we have them on a mailing list, we will get to them. Not everybody was invited could attend, and we're going to work through the associations and the cooperatives to reach these individuals, provide the information to them and what gets around. And we've only now started this process in solution. We intend to continue whatever leads we've been able to generate to close on them and also to do this to the rest of the region as well. So I don't have the information at my fingertips, maybe I should have. But once you visit the CDF website or Kraft website, www.kraft.org, you should get the information that you need, but we will be actively reaching out to potential clients to give them the information. That's actually the information at your fingertips right there. Yes, yes, that they need. But it's interesting because it's a good question, because what we've done is we put all of that information on a portal. And it's not just for the small, medium enterprises, but also for the financial institutions that are going to be providing the concession of financing to those SMEs. So if they want to apply for support from the Kraft facility, the applications can actually be done online as well. This is a very important terminology, support, because we have individuals who when they see fund, they believe that place would just give them the money and they can do whatever with it. What are you expecting from the entrepreneurs of the serious industries when they have seek the assistance from the CDF? They've gotten the support. What are you looking for? Well, I mean, there are a number of stages to this. And I think it's important for me to talk about the different forms of support that we provide. Yes. Most importantly, at the forum today, and in terms of the model that we've developed, we provide the technical support to the SMEs free of charge. So if you want an energy audit done and you're interested in becoming part of that system to get support from the Kraft facility as a whole, we provide free technical assistance. That could be for energy audits, as I mentioned, it could be that you have a project and you want to develop it so that it is bankable. We can help you with your project design. We can help you with your choice of technology, appropriate to the scale of your business. And all of that technical assistance is free of charge. Once you've done that and the project is deemed to be bankable, we have signed up a number of financial institutions in Senushan. We're in the process of expanding that pool. So far, we have the Senusha Development Bank and the Bank of Senusha signed up as partners of the Kraft. So you would go to them and they would assess your project and determine whether you qualify for credit risk support. That support is currently being provided in the form of a partial guarantee on a concessional loan. So that does two things. It incentivizes the financial institution to lend to you and it also makes the cost of borrowing lower for the SMEs. So it's all part of incentivizing investment in renewable energy and energy efficiency. So there are different forms of support, technical support, financial support. Okay. Now, what are some of the projects that you are involved in and around the region and of course, particularly here in Senushan? Okay. Well, there are a number of areas in which we do projects. We have a mandate in accordance with the treaty, revised treaty of Shahgramas and the CDF agreement to work in three broad areas. Infrastructure development is one. Enterprise competitiveness and business development is another and facilitation of regional investment. In our consultation with the countries that we serve, these areas have been broken down into a number of thematic thrusts. So renewable energy and energy efficiency is one. Sector level infrastructure, infrastructure to improve the productive capacity in agriculture, in tourism, national infrastructure is another one. And I'll give you, hopefully, can give you a few examples in a minute. And agriculture, importantly, is another sector that we get a lot of requests for support and tourism. In all of these areas, in most of these areas, we actually have programs in Senusha. We've done a youth enterprise project in agriculture in Senusha under our full cycle. Under this current cycle, we are supporting Senusha with community tourism. With the community tourism, there's a line of financing that we have through the SLDB that provides loans to businesses interested in doing business in tourism that is related to supporting the community tourism thrust. So that's access to finance for SMEs. But we also provide them with technical support to improve the quality of their product. And we provide the government with loan financing to improve the infrastructure in the communities to make them more attractive for visitation by tourists. So that's one set of projects that we've been doing. At the national level, we actually, in our full cycle, provided a significant level of financing to invest in integralities for their new airport, our Gail International Airport, including a renewable energy solar farm, which was co-financed with the global environmental facility. And now we are supporting St. Vincent in building hotels that will be given to international operators to manage. So all in all, we're talking programs in the region of about 8 to 10 million US dollars for these countries. We operate across the region, but these are just probably some examples that might give an idea of the breadth of the work that we do. Okay, well, we'll take a quick break right now and when we get back, we'll find out some more of the work that is done. And also, I'm curious to find out a little bit about the climate change because we always here talk about climate change and the CDF's involvement in the discussion. So we'll do that right after the break. This is TV30. I'm your host, Kendall Eugene. We'll be back after this. The world's climate is changing, and that affects all of us. Storms are becoming increasingly intense. Periods of intense drought and heavy rain, stress farm animals and destroy our crops. Higher average ocean temperatures kill our coral reefs and change the migratory patterns of fish. St. Lucia contributes only 0.0015% of global greenhouse gas emissions, but is doing its part, along with countries around the world, to reduce the emissions that are warming our world and changing our climate. These efforts are called mitigation. But decades of emissions have already changed the climate and the greenhouse gases in the atmosphere today will increase average global temperatures even more. We need to adapt, that is, do everything we can to prepare for and respond to the actual and expected negative effects of climate change and everyone has a role to play. We need to protect our crops, build homes that withstand storms and keep our drains and waterways free of garbage to help us recover or bounce back from climatic events. Learn more about the Government of St. Lucia's National Adaptation Plan and the steps you can take to protect yourself and your fellow St. Lucia's. Welcome back to TV30. I am your host, Kenneth Eugene. With me today is our guest, Mr. Ronald Suma, and he is the Chief Executive Officer of the Caribbean, the Karakum Development Fund. I tried my best not to say Karakum, and it happened. I was about to give the entire Karakum a feeling when it happened anyway. Mr. Suma, climate change is a big discussion now. Well, not now, it has been for a long time, but I am curious to find out CDF's involvement in that discussion around climate change within the region. If you guys have any involvement at all, what is the basis? Yes, we have quite a significant involvement, which probably is not known by many. And it is because two of the thematic areas in which we work, I have spoken about sustainable energy, the other being infrastructure. Because infrastructure is adversely impacted by climate change, when you are building or building back, it has to be resilient. It has to be resilient to climate change. So a lot of our infrastructure projects have that element in them. I will just give you a few examples. For example, we co-financed the energy plant in Barbuda with the UAE and the government Antigone Barbuda and the government of New Zealand to set up a new plant, which would be green, more green, with a combination of solar battery, but also with diesel backup. So we have been involved, and that was in response to building back more resiliently after Hurricane Irma. And further to that, we are co-financing a project with the Caribbean Development Bank to underground the utilities infrastructure in Barbuda to make the system even more resilient. So these are two examples of climate-related projects. We have done drainage and irrigation infrastructure projects in Guyana that are meant to address the flooding issue. Which is climate-related and the elements of renewable energy in there, where you have a solar operated pumping system and a drainage system. So it's fully solar powered. So we are addressing it in that way. As we move forward, there are two dimensions to climate action that we're involved in. The energy side deals with mitigation. So I was talking about the credit risk abatement facility. Correct. So what we're trying to do is to develop products or programs that address various aspects of our mandate. So the craft addresses the mitigation dimension of climate change. But we are currently in the process of developing a fund that will address the resilience building, particularly for infrastructure. And including setting up a system that would attract more private sector investment in resilience building. So that resilience fund will be able to speak more definitively about it, hopefully later in the year. It's in the process of being structured now. And once we do that, then we become much more active in the climate action sphere. And allied with that, we are currently in the final stages of seeking accreditation to the Green Climate Fund. So we will have additional resources available to the CDF to help the region with its climate agenda. Why is it important for the CDF to engage in funds such as the Green Financial Spoke about? Well, it's critical because the cost of building back in the aftermath of disasters is very high. So there's been a call, as you'll be aware, for much more concessional financing, including grant financing, to the extent possible, to help the countries rebuild because they already have such high debt levels. So there's an increased emphasis on being able to tap into those funds to bring more concessionality to the process of building back better. I think that's one of the major reasons why we are involved, because as a regional fund responsible for addressing situations of disadvantage in the countries, obviously one of the major challenges we face is the challenges that emanate from climate change, both on the adaptation side as well as the mitigation side. So we have to be involved in order to support the region's development trust. Excellent. Now we have programs that you have spoken about recently and I'm curious now, the successes, everybody wants to know, okay, if I'm going to be a part of something, it has to be successful. What are some of the successes that you can speak of, speak about, and you can of course boast it to anyone who asks you a question, specifically about the programs that CDS engage in? Well, a lot of the projects that I have mentioned, I mean, can be considered to be successful, they've been successfully implemented. The Barbuda Energy Resilience Project that we are co-financing with the CDB is ongoing now, but the Green Barbuda plant is up and running. It should have been commissioned by now, but it sustained some slight damage from the recent hurricane. So they're now sort of dealing with that so that it can properly commission the plant. The Argyle International Airport is up and running, it's a success. And we've also successfully provided funds to the development banks on land to SMEs. We typically do those in tranches of three to five million US dollars, so we've worked with the Development Finance Corporation in Belize with these lines of credit, Senutia Development Bank, AID Bank in Dominica, the Greenland Development Bank. We're currently working with the Antigone Barbuda Government to resuscitate the Antigone Barbuda Development Bank. So once we strengthen the operations of these banks, they can lend more effectively and at concessional rates to SMEs. So that is a success story for us, and we're actually building on that using these development banks as partners for the craft so that they can incrementally lend more to SMEs interested in energy investments. Individual businesses, especially small businesses, would ask one question. What is in it for me? What would your answer be to them? Well, the answer would be benefits to the competitiveness of your business, lowering your operating costs, providing you additional cash flow for expansion, giving you an opportunity to expand your reach into the regional and international market by allowing you to operate more competitively. And this morning when that question was asked, I think they appreciated the answers we gave them, and they appreciated the fact that we recognized that there's a need to incentivize investments in the sector, which is why the technical assistance is being provided at no cost to them, and that there's support in the systems that we are making available to them, where wherever the challenge might be, whether it's a technical challenge, whether it's an access to finance challenge, we have put mechanisms in place to support them. So what's in it for them is a program that is tailored to meet their specific needs and to open up the opportunities for them to lower their operating costs and expand their businesses. You would have some that would hear that, see their comrades or their colleagues engaging in it, being successful, but they would still be reluctant to take the plunge, take the dip. Why do you think that? What do you think the reason is for an entrepreneur, for example, being reluctant to take advantage of all the benefits that you just spoke about? Well, I think when you speak to these business people, what they said, and some of them said it today, that there's a lot of fatigue with these new facilities that have been presented to them. They see it as a lot of talk and a little action. So we're obviously trying to be different. We're trying to ensure that whatever we offer, we can bring to a successful closure. And what we would say to them is look at the evidence, give it a try, and we are prepared to hand-holding with them and take them through the process. So in fact, one of the major objectives of the forum that we had today and we are going to do throughout the region is to raise awareness of the opportunities and to let them know that the CDF and its partners are there to support them every step of the way. So whatever the nature of their challenges or the opportunity they're pursuing, we have the technical resources in-house to help them to define, better define what they wanted to do, help them develop their projects, and to make them bankable, that's the most important thing. The banks have the financing, but there's a shortage of good projects to drive the investments. So we are offering the small businesses assistance and getting their projects to market. So I mean, some of them would be reluctant because they've heard it before, but we are able, even at this stage, to show them the successes that we have been able to generate so far. There's one company that has benefited from the full range of services of CRAF. So we showcased that this morning. And we are hoping that with the leads that we generated from the interest expressed today, that we will have a pipeline of projects going through the financial system in St. Lucia that can then add to that demonstration effect and then encourage more businesses to come forward. Now you mentioned that the forum was held today in St. Lucia and there will be more forms coming up. Can you let us know when and where they will be held? Well, what we have done, because the financial institutions are critical to the functioning of this facility, everything dovetails into a financial institution being able to finance a bankable project. So what would dictate where we go next is where we have signed up financial institutions. So we have done that in Belize. So I think we're going to go to Belize next. We are in the process of finalizing this for Grenada and Antigone, Barbuda. So these are the two OECS countries we're likely to go to afterwards. And as we sign up financial institutions in these countries, so there is some institution that the SMEs can go to and get the full range of services, then we go and promote the facility in that country. What is your ultimate goal? Our ultimate goal, and I'm happy you asked that question because the reason that the CDF was set up was to foster greater economic and social cohesion in Karakom. We do that by working with those countries and sectors and businesses that need the most help to take advantage of the single market and economy. So that's what our goal is really. Our main goal is to address any dislocation, economic dislocation that might arise from the implementation of the CSME, but more positively to promote social and economic cohesion in Karakom. And to the extent that we can help businesses to become more competitive, improve their capacity to produce and trade and create employment, then we are providing opportunities for social and economic cohesion. Excellent. Mr. Sumawan, I want to say a big thank you for joining us this afternoon with our TV30, and good luck with the forum as you guys move to Belize and you try to wrap up with the other OECS countries. This has been TV30. My guest today was Ronald O'Souma, Chief Executive Officer of Karakom Development Fund. My name is Kenal Eugene to have a great day. Bye-bye now.