Private sector financing will play a critical role in the development of cleaner renewable energy in small-island nations, the Minister of Home Affairs has said.

Walter Roban, who is also the Deputy Premier, gave a presentation during the opening session of a three-day virtual forum about sustainable island finance on Tuesday.

The Island Finance Forum, taking place until today, provides a platform for policymakers, financiers, entrepreneurs and other stakeholders to share their experiences, and best practices in sustainable finance.

Mr Roban said: “Finance is crucial to all of us reaching sustainable development and goals of transition towards cleaner energy and cleaner environmentally safe futures but that finance doesn’t exist within our islands in the amounts that is required.

“So the global community, the public and non-public sector areas that are about development financing and infrastructure financing are required to also be a part of this picture.

“It is now very clear that long-term investment in renewable energy options is a lot more lucrative than investing in fossil fuel options.

“Yes, we are in a very challenging world right now due to a number of factors, which puts pressure on growth, which puts pressure on energy needs and which presses on ensuring sustainable communities.

“But we must push forward with looking at how we can finance the transition for all communities, particularly island communities, towards green energy, towards sustainable options and sustainable development.”

In 2018, Bermuda adopted its first Integrated Resource Plan which set out a path towards transitioning from primarily fossil fuel generation to renewable.

The IRP’s goal is for Bermuda to transition to 85 per cent of renewable energy generation by 2035 and to achieve net zero in carbon emissions by 2050.

Mr Roban said this will include about 21MW of solar energy, adding: “We are very much on our path of meeting that goal.”

He said it would mean a further 60MW of wind power and decommissioning about 71MW of fossil fuel generation.

Bermuda’s energy generation is primarily derived from heavy fuel oil, one of the highest-polluting fossil fuels for use in an urbanised area.

In 2021, the Regulatory Authorit,y which regulates the sector, rejected a ban in Bermuda on high-sulphur HFO based on price and other factors. Light fuel oil and diesel are approved fuels that could be adopted on a permanent basis here but at a higher price.

Belco, Bermuda’s primary energy supplier, has also explored the viability of liquefied natural gas, a fossil fuel, as a way forward for the island, but the IRP rejected its proposal. The IRP is being updated and could include a new LNG proposal.

In his talk, Mr Roban referenced Larry Fink, American billionaire and chief executive of the global investment management corporation Black Rock, who has said large corporations’ capacity to invest will be guided by companies having strong environmental, social and governance frameworks.

Mr Roban said it was important that islands, too, have ESG priorities.

He added: “We must also embrace legislative and regulatory frameworks that support sensible and reasonable development that not only protects our own economic livelihoods, our environment, but also our public.

“We must have the appropriate legislative frameworks in place to show the private community and public community that we are serious about these objectives and goals.”

Mr Roban reiterated the need for islands to be supported financially in the endeavour, adding: “Where the public sector can support it should, mindful that in most island communities we are struggling to pay for healthcare, education, security and overall social governance so pushing monies towards the support of financing energy generation is extremely costly and can tie up priorities that we need to put elsewhere, so having a balanced approach with getting public sector to derisk certain projects so that the private sector can come in is the way we should go.”

The forum, hosted by Island Innovation and lead partner PwC Caribbean, is covering a range of topics including fintech innovation, risk and insurance, the blue economy, climate finance, renewable energy finance and impact investing.

Mr Roban was joined in the opening presentations by Denzil Douglas, Minister for Foreign Affairs, International Trade, Industry, Investment and Economic Development for the Government of St Kitts & Nevis among other high-ranking officials.