The Abu Dhabi Fund for Development or ADFD has agreed to provide Dh55 million loan to Saint Vincent and the Grenadines to set up a geothermal power station.

The agreement was signed by Mohammed Saif Al Suwaidi director-general of the ADFD and Ralph Gonsalves Prime Minister of Saint Vincent and the Grenadines.

The project is being funded as part of the Dh1.285 billion ADFD/International Renewable Energy Agency project facility set up in 2012 to provide concessional financing for renewable energy projects in developing countries affiliated to the Irena.

One of the five projects selected for funding as part of the second loan cycle facility the power plant aims to utilise naturally-occurring geothermal energy to plug the power shortage in Saint Vincent and the Grenadines. In the long term the project will help drive the wider energy sector and accelerate sustainable economic development across the country's 32 islands.

Gonsalves said: "The proposed geothermal power plant will give a strong boost to the energy sector in our country supporting its economic growth and development programmes."

Al Suwaidi said: "The ADFD has paid particular attention to the renewable energy sector given the essential role of the sustainable energy in meeting the growing needs of developing countries."

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