The Caribbean Development Bank (CDB), the United Kingdom’s Foreign, Commonwealth & Development Office (FCDO), and the Government of Grenada (GOGR) have taken a significant step towards advancing geothermal energy development in the region with the signing of a £10 million Memorandum of Understanding (MOU) to support Grenada’s geothermal test drilling.

CDB’s Vice-President of Operations, Mr. Isaac Solomon, highlighted the importance of the partnership:

"This agreement reflects the strong collaborations driving the Caribbean’s sustainable energy transition. CDB welcomes the continued support of its development partner, FCDO, and looks forward to utilising these funds as part of the Bank’s GeoSmart Initiative to enhance Grenada’s Geothermal Drilling Project. With Grenada’s commitment to advancing its geothermal development, this funding will help unlock sustainable, indigenous energy sources, strengthening energy security and resilience."

In 2023, CDB approved USD 9.4 million for the Geothermal Drilling Project – Grenada, which includes drilling two exploratory wells to assess the island’s geothermal potential. In early 2024, FCDO pledged an additional £10 million to expand the drilling programme, enabling deeper and broader drilling at the same site to improve the chances of accessing a commercially viable geothermal resource.

Geothermal energy, generated from heat beneath the Earth’s surface, provides a stable, 24-hour renewable energy source, unlike solar and wind power, which are variable. Surface studies suggest that Grenada’s geothermal resources could support a 15-megawatt power plant. This indicative potential must be confirmed through test drilling, currently underway, followed by production drilling. If successful, the project could reduce the country’s reliance on diesel by up to 55%. Grenada’s primary geothermal prospects are located near Mount Saint Catherine, the island’s highest point.

Through CDB’s GeoSmart Initiative, the Bank mobilises resources through strategic partnerships, and provides financing and technical assistance to unlock geothermal potential, strengthen energy security, and enhance regional climate resilience.

Speaking on the significance of the agreement, the Hon. Dickon Mitchell, Prime Minister of Grenada, expressed appreciation for the additional support:

"This £10 million investment from the UK Government is a significant milestone in Grenada’s pursuit of a sustainable and resilient energy future. By harnessing our geothermal potential, we are taking a bold step towards reducing fossil fuel dependence, enhancing energy security, and creating economic opportunities for our people. This partnership reaffirms our unwavering commitment to a cleaner, more sustainable future."

Beyond Grenada, other islands in the Eastern Caribbean are also benefiting from funding under GeoSmart. In 2024, CDB approved a USD 34.8 million loan to fund the construction of a 10-megawatt  geothermal power plant in Dominica, while funding of USD 17 million has been approved for St Kitts and Nevis towards the drilling of production wells on the island of Nevis. CDB previously provided USD 27 million to support the now completed geothermal exploration in Saint Vincent and the Grenadines.

The signing of this agreement represents a significant milestone in the Caribbean’s transition to a cleaner, more sustainable energy future, positioning Grenada and the wider region as leaders in renewable energy innovation.