Singapore-based investment firm Mercurius Capital is set to explore opportunities in the untapped solar power market of the Caribbean and is planning to launch a private equity fund for the same.
Through the Caribbean Solar Power Investment PE fund, Mercurius Capital plans to raise $300 million to finance 100 to 150 MW of solar power capacity in Caribbean countries. To maximise the financial gains, the company plans to work with Chinese solar power equipment manufacturers to cut installation costs.
Mercurius also announced the launch of an $81 million private equity fund aimed at financing urbanisation projects in smaller Chinese cities.
According to NPD Solarbuzz, Latin America and Caribbean are expected to see 9 GW solar power capacity added over the next 5 years. NPD Solarbuzz’s Emerging PV Markets Report published last year states that the solar power project pipeline in Latin America and Caribbean now exceeds 22 GW, with 1 GW capacity already under construction.
The region has started to attract international support for its renewable energy infrastructure. The European Investment Bank announced financial support to study the feasibility of geothermal power project in Dominica. Japan announced aid worth $15 million to 8 countries in the Caribbean, for preparing and designing their Nationally Appropriate Mitigation Actions (NAMAs) and National Adaptation Plans (NAPs). Last year, the Inter-American Development Bank and the Japan International Cooperation Agency (JICA) signed an agreement to boost the amount of concessional loans offered to Caribbean and Central American countries from $300 million to $1 billion. The first loans issued by JICA are already being used for implementation of renewable energy and energy projects in Nicaragua and geothermal power projects in Costa Rica.
With rapidly increasing competition in other emerging markets like India, the Middle East, and North Africa, the Caribbean seems a logical market for early movers. The fund will also open a new market to the Chinese solar equipment manufacturers that are facing anti-dumping duties in developed economies like the US and Europe.