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15 March 2006 1 Eastern Caribbean Geothermal Development Project A. John Armstrong Policy & Legal Consultant Geo-Caraibes Project.

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Presentation on theme: "15 March 2006 1 Eastern Caribbean Geothermal Development Project A. John Armstrong Policy & Legal Consultant Geo-Caraibes Project."— Presentation transcript:

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2 15 March Eastern Caribbean Geothermal Development Project A. John Armstrong Policy & Legal Consultant Geo-Caraibes Project

3 15 March Cornerstones of Geothermal Development Policy Finance Resources Market

4 15 March Private Investment Prerequisites Prerequisites for private investment – Prerequisites for private investment – a stable political environment a stable political environment a reliable legal environment a reliable legal environment an effective regulatory framework an effective regulatory framework Clear & reliable off-take Clear & reliable off-take rules stipulated in PPAs rules stipulated in PPAs crucial crucial Policy

5 15 March Reforming the Energy-Sector Framework Develop & institute policy reforms policy reforms institutional reforms institutional reforms capacity reforms & capacity reforms & legislative & regulatory counsel legislative & regulatory counsel to overcome barriers that prevent private- sector development of geothermal energy. to overcome barriers that prevent private- sector development of geothermal energy.

6 15 March Subcomponent One: Policy Reforms ORGANIZATION PROJECT COUNTRY GEOTHERMAL POWER PROJECT LENDING INSTITUTIONS DEVELOPERSDEVELOPERS OPINION MAKERS GOVERNMENTGOVERNMENT UTILITIES

7 15 March Subcomponent One: Policy Reforms ORGANIZATION Geothermal Advisory Groups Consistent with the Project objective of capacity building in each of the Geo-Caraïbes countries, the Project established/worked with : Regional Geothermal Advisory Task Force; Regional Geothermal Advisory Task Force; Policy and Legal Team; & Policy and Legal Team; & Project Country Project Country Geothermal Consultative Groups.

8 15 March Subcomponent One: Policy Reforms ORGANIZATION Regional Geothermal Advisory Task Force Hon. Reginald Austrie Minister of Communications, Works & Housing Commonwealth of Dominica Hon. Reginald Austrie Minister of Communications, Works & Housing Commonwealth of Dominica Marcella Powell Permanent Secretary, Ministry of Communications, Works & Housing Marcella Powell Permanent Secretary, Ministry of Communications, Works & Housing Rawlins Bruney Manager, Dominica Electricity Services Ltd. (DOMLEC) Rawlins Bruney Manager, Dominica Electricity Services Ltd. (DOMLEC) Sylvester Vital Senior Engineer, Ministry of Communications, Works & Housing Sylvester Vital Senior Engineer, Ministry of Communications, Works & Housing Alick C. Lawrence Legal Consultant to Office of Prime Minister Alick C. Lawrence Legal Consultant to Office of Prime Minister Hon. Ferguson John Minister of Physical Development, Housing & Environment St. Lucia Hon. Ferguson John Minister of Physical Development, Housing & Environment St. Lucia Martin Satney Permanent Secretary, Ministry of Physical Development, Environment & Housing Martin Satney Permanent Secretary, Ministry of Physical Development, Environment & Housing Judith Ephraim Unit of Sustainable Development & Environment, Ministry of Physical Development, Housing & Environment Judith Ephraim Unit of Sustainable Development & Environment, Ministry of Physical Development, Housing & Environment Trevor Louisy Managing Director, St. Lucia Electricity Services Ltd. (LUCELEC) Trevor Louisy Managing Director, St. Lucia Electricity Services Ltd. (LUCELEC) Georgis Taylor-Alexander Crown Counsel Georgis Taylor-Alexander Crown Counsel Hon. Michael A. Perkins Minister Physical Planning & Infrastructural Development, Nat. Resources & Env. St. Kitts & Nevis Hon. Michael A. Perkins Minister Physical Planning & Infrastructural Development, Nat. Resources & Env. St. Kitts & Nevis John Channor Chief Engineer/Manager, St. Kitts Electricity Department John Channor Chief Engineer/Manager, St. Kitts Electricity Department Shirley Skerrit Senior Project Analyst, Planning Unit, Ministry of Sustainable Development ( Ministry of Finance) Shirley Skerrit Senior Project Analyst, Planning Unit, Ministry of Sustainable Development ( Ministry of Finance) Stephen Hector Office of Attorney General Stephen Hector Office of Attorney General Israel Mukasa Office of Attorney General Israel Mukasa Office of Attorney General

9 15 March Subcomponent One: Policy Reforms Need regional approach Need regional approach Re-evaluate & refine regional starting goal & individual country's policy guidance. Re-evaluate & refine regional starting goal & individual country's policy guidance. Develop sharing of regional institutional resources. Develop sharing of regional institutional resources. Long-term purchases of IPP electricity. Long-term purchases of IPP electricity. Establish authority for IPPs to generate electricity. Establish authority for IPPs to generate electricity. Enact exceptions for geothermal IPPs. Enact exceptions for geothermal IPPs. Need effective capacity to enable power sales. Need effective capacity to enable power sales. Streamline & standardize legal & regulatory procedures for PPAs. Streamline & standardize legal & regulatory procedures for PPAs. Assist utilities draft model PPAs. Assist utilities draft model PPAs.

10 15 March Subcomponent One: Policy Declaration It is hereby declared that all the Geothermal Resources in, or under any Land of whatsoever ownership or tenure are vested in and are subject to the control of the State. It is the duty of the State to promote the exploration for, and development of, its Geothermal Resources in such a manner as to assure the supply of energy necessary for the economic growth and general welfare of the people the country and to decrease the dependency of the country on non-renewable resources. It is hereby declared to be in the public interest to foster, encourage and promote the discovery, development, production and disposal of Geothermal Resources in the country in such manner as will safeguard the natural environment and the public welfare and at the same time will encourage private enterprise to provide the necessary services, financing and technology.

11 15 March Subcomponent Two: Institution Building Need legal framework adequate for successful geothermal development. Need legal framework adequate for successful geothermal development. Need mechanism for memorializing regional policy reform consensus. Need mechanism for memorializing regional policy reform consensus. Review & enact Geothermal Resources Development Law -- adjust for Martinique & Guadeloupe transmission Review & enact Geothermal Resources Development Law -- adjust for Martinique & Guadeloupe transmission Resolve local transmission hurdles. Resolve local transmission hurdles. Legislate competitive advantages. Legislate competitive advantages. Need institutional organization for managing resources. Need institutional organization for managing resources. Institute standing policy & technical body. Institute standing policy & technical body. Provide complimentary regulations. Provide complimentary regulations. Provide capacity to manage geothermal resource areas; permits/ licenses/concessions; contracts. Provide capacity to manage geothermal resource areas; permits/ licenses/concessions; contracts.

12 15 March Subcomponent Two: Institution Building (continued) Need legal & institutional framework establishing conditions for commercial geothermal power plants & for selecting developers. Need legal & institutional framework establishing conditions for commercial geothermal power plants & for selecting developers. Institutionalize “one-stop shop”. Institutionalize “one-stop shop”. Establish critical path for negotiated licenses & public bidding. Establish critical path for negotiated licenses & public bidding. Institute mechanisms allowing both development promotion to co- function with compliance. Institute mechanisms allowing both development promotion to co- function with compliance. Need capacity to regulate technical aspects of geothermal development -- meaningful regulatory structure. Need capacity to regulate technical aspects of geothermal development -- meaningful regulatory structure. Provide regulations – model contracts, bond & royalty schedules, & field rules. Provide regulations – model contracts, bond & royalty schedules, & field rules. Establish means for legislating fees, royalties & taxes. Establish means for legislating fees, royalties & taxes. Establish fees, royalties & taxes that balance government’s return with allowing resource development. Establish fees, royalties & taxes that balance government’s return with allowing resource development. Need due diligence mechanisms. Need due diligence mechanisms. Provide clear, mandatory, due diligence guidelines for evaluating prospective geothermal developers. Provide clear, mandatory, due diligence guidelines for evaluating prospective geothermal developers.

13 15 March Subcomponent Three: Capacity Building Need capacity for promoting commercial development. Need capacity for promoting commercial development. Obtain input on proposed legislation & regulations from Stakeholders, international private-sector developer & lending communities. Obtain input on proposed legislation & regulations from Stakeholders, international private-sector developer & lending communities. Need capacity for promulgating information re geothermal development. Need capacity for promulgating information re geothermal development. Establish Regional public outreach geothermal educational program. Establish Regional public outreach geothermal educational program. Develop related shareable materials. Develop related shareable materials. Tailor Regional program to meet country-specific circumstances. Tailor Regional program to meet country-specific circumstances. Need local human resources trained in geothermal resource development. Need local human resources trained in geothermal resource development. Formulate educational program to assist governments to staff regulatory institutions. Formulate educational program to assist governments to staff regulatory institutions. Establish repository libraries, geothermal web site, & cross-training. Establish repository libraries, geothermal web site, & cross-training. Institutionalize safety & environment bonding & other enforcement tools. Institutionalize safety & environment bonding & other enforcement tools.

14 15 March Legislative & Regulatory Counsel Subcomponent Four: Legislative & Regulatory Counsel Need internal capacity to monitor or regulate licenses. Need internal capacity to monitor or regulate licenses. Establish permit, license & concession criteria. Establish permit, license & concession criteria. Need clear policy with respect to using private lands for geothermal development purposes. Need clear policy with respect to using private lands for geothermal development purposes. Assist national political leadership in determining best way to obtain geothermal resource lands through liaison with municipal authorities. Assist national political leadership in determining best way to obtain geothermal resource lands through liaison with municipal authorities. Ministries need technical expertise. Ministries need technical expertise. Provide legislative advice, & counsel at Ministerial, Cabinet & Parliamentary levels -- counsel only, not actual testimony. Provide legislative advice, & counsel at Ministerial, Cabinet & Parliamentary levels -- counsel only, not actual testimony.

15 15 March Next Steps (Legislation & Regulation) Feedback from policy makers (formalize) Feedback from policy makers (formalize) Redraft 1 Redraft 1 Ministerial or Cabinet clearance on Redraft 1 Ministerial or Cabinet clearance on Redraft 1 Present draft(s) for Geothermal Community comment Present draft(s) for Geothermal Community comment Present draft(s) for Financial Community Comment Present draft(s) for Financial Community Comment Redraft 2 Redraft 2 Regional Review Regional Review Cabinet Clearance on Redraft 2 Cabinet Clearance on Redraft 2 Introduce Bill Introduce Bill Enact Enact

16 15 March Geo-Caraïbes Policy Summary


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