IDB Approves $90M Loan to Expand Smart Energy Access in The Bahamas

The Inter-American Development Bank (IDB) has approved a US$90 million loan to strengthen the reliability, resilience, and efficiency of electricity services in The Bahamas, marking a major step toward modernizing the country's energy sector. The investment will benefit over 352,000 people—approximately 85% of the population—by deploying advanced smart metering technology, modern grid management tools, and improved institutional capacity for the national utility, The Bahamas Power and Light Company (BPL).

This operation is the second phase under a Conditional Credit Line for Investment Projects (CCLIP), first approved in 2020, which provides long-term financing to support energy transformation, renewable generation, and digital infrastructure across the Caribbean nation.

Modernizing Energy Systems for Sustainable Development

The IDB's new investment is part of The Bahamas' ongoing efforts to improve energy efficiency, reduce technical losses, and enhance service quality for households and businesses alike. By integrating advanced technologies such as smart meters, Supervisory Control and Data Acquisition (SCADA) systems, and Geographic Information Systems (GIS), the program will enable faster response times, transparent billing, and smarter energy planning.

The smart meters, equipped with real-time monitoring and prepayment functionality, will allow users to track and control their electricity consumption, promoting financial management and sustainability. Approximately 41,000 vulnerable residents are expected to benefit directly from these features, which eliminate upfront installation costs and enable better household budgeting.

Residents across New Providence and the Family Islands will also gain from an upgraded grid that reduces outages and improves resilience to natural disasters. The integration of SCADA systems will enhance BPL's ability to monitor, detect, and restore power across its distribution and transmission networks efficiently.

Strengthening BPL's Institutional and Technical Capacity

In addition to technological upgrades, the IDB loan will fund institutional reforms and capacity-building measures within Bahamas Power and Light (BPL). The utility will receive support to:

• Enhance its data management and analytics systems, enabling data-driven decision-making;

• Strengthen corporate governance and financial management, ensuring transparency and accountability;

• Build technical capacity among staff through training in energy planning, IT, and big data; and

• Develop a long-term energy strategy consistent with the country's renewable energy goals and climate resilience plans.

The introduction of a digital GIS mapping system for electrical infrastructure will provide BPL with a comprehensive view of assets across the archipelago. This will support faster outage detection, quicker restoration times, and better coordination of emergency responses during storms and hurricanes—a critical advantage for an island nation frequently exposed to extreme weather events.

Supporting Energy Transition and EU Integration Goals

The program is aligned with The Bahamas' National Energy Policy, which targets a transition toward renewable and efficient energy systems. It also complements ongoing reforms to reduce reliance on imported fossil fuels, lower electricity costs, and cut greenhouse gas emissions.

"The IDB's support reflects our shared vision of making The Bahamas' energy infrastructure more efficient, climate-resilient, and people-centered," said an IDB representative. "By combining smart technologies with institutional strengthening, this program is helping The Bahamas take a decisive step toward energy independence and sustainability."

This new phase also underscores the IDB's role as a key partner in the Caribbean's clean energy transition, following similar operations in Barbados, Jamaica, and the Dominican Republic focused on grid modernization, renewables, and digital transformation.

Enhancing Equity and Access

The modernization effort goes beyond technology—placing social inclusion at the heart of energy reform. The introduction of prepaid smart metering systems allows lower-income households to manage consumption without facing unexpected bills, reducing the risk of disconnection.

By eliminating installation fees and promoting consumer-friendly innovations, the initiative seeks to ensure that no household is left behind in the country's shift to digital energy management.

Financial Details and Implementation Timeline

The US$90 million loan has a 25-year amortization period, with a 5.5-year grace period and an interest rate based on the Secured Overnight Financing Rate (SOFR). It forms part of the broader CCLIP framework approved in 2020, which aims to mobilize sustainable investment for energy efficiency, renewable integration, and institutional reform across The Bahamas.

Implementation will take place over the coming years, with BPL working alongside the Ministry of Energy and Transport and the IDB's technical experts to ensure smooth rollout, monitoring, and impact assessment.

A Blueprint for a Smarter, Greener Future

By modernizing its electricity infrastructure, The Bahamas is setting a benchmark for island nations aiming to strengthen energy security and adapt to climate change. The IDB's financing will help transform the country's grid into a smart, responsive, and efficient energy network that supports economic recovery and sustainable development.

The project exemplifies the growing emphasis on digitalization, inclusion, and resilience within the Caribbean's energy transition. It will empower The Bahamas to better withstand climate shocks, reduce operational costs, and deliver more reliable energy to its people — a crucial step toward achieving the country's vision of a sustainable, efficient, and equitable energy future.