World Investment News (WI): As one of the most important ministers, you have a major responsibility with regards to the country's future and sustainable development, what would you say has been your main priorities and what are the main challenges you have to faced?
Honourable Gregory Bowen (GB): Development has been the main priority since coming into office; we came in 1995, went out in 2008 and came back in 2013. Along that period, we decided to do what was necessary and embark on a set of measures that would bring the economy back. We strengthened our partnerships with our donors, such as the International Monetary Fund (IMF), the World Bank or the European Union. We did what was necessary and correct in order for the country to reactivate, and that has put us in a comfortable position with our partners and donors.
We have a fiscal responsibility, oversight committee that looks at the rules that we have placed -completely independent of the government- to see that we stay on course. This is something that was instituted by this administration, for we believe that these types of measures are necessary for a transparent and correct government. Reports are published even if we do not agree with them. This was the first time that a completely independent oversight committee which reported straight to parliament and donors, was put in place. These are some of the measures that were introduced in order to come out of the doldrums; and it is one of the reasons why the country is growing at a rate of over 5 per cent, which is one of the best in the region.
WI: What is your assessment of the current state of public infrastructure, what would you say are the major developments taking place, and how can Chinese investors contribute to its development?
GB: I was recently in China for the Belt and Road Initiative summit. Where Grenada is concerned, we need to expand our road infrastructure in order to avoid traffic congestion. We need to construct alternative routes in order to decongest main roads, which will help in meeting our commitment to the Kyoto Protocol, the UN's COP21 with regards to pollution, etc. Even though we are a small country that does not pollute much, we still have to control our emissions and carbon footprint. In this regard, the island nations are some of the most negatively affected countries due to big industrialized countries. But we must also lead by example, which is why these issues are of such importance for us.
Another area where Chinese can contribute is in the energy sector, which is critical. I have already spoken with some Chinese companies for us to move closer into renewable energy. We have diesel plants, but our plans are to move our generation to 100 per cent renewable energy; it will not be easy, but it is the way we have to go. I have spoken with some people from the tourism sector, and this step towards renewables could quadruple our tourism numbers.
WI: When could this be achieved?
GB: It is one of our targets for our 2030 development plan.
WI: Is there geothermal potential as well?
GB: Yes, and it is of critical importance to us. When the solar irradiation falls at night, the geothermal does not fall, so there is constantly energy being generated. We have 33 MW peak demand, and the preliminary findings that Japan and New Zealand helped us gather, show a potential of 50 MW of geothermal. Once we achieve reasonable energy prices, our numbers will double very quickly, we can hit the 60MW Peak mark.
If preliminary results show a 50MW potential of geothermal energy before we drill the well, we can easily find 60MW after we drill the slim hole well. As I said, Japan and New Zealand - both leaders in geothermal - are already in the country; the next step is to invest in the slim hole drilling, which is another 20 million USD. This is where investment is needed. After drilling the slim hole, you can develop and build out the plants.
We also have great solar potential obviously, which is very important to our mix because geothermal is expensive, so even if you have potential for 50MW, you might develop 30MW - later down the road you can include another generating unit to bring up installed capacity - but you can blend the geothermal generation with solar for peaking.
Thanks to this mix, from an economical evaluation, you will have better returns. You will have the base thanks to geothermal and you peak with cheaper renewables, like solar. This represents a great investment opportunity, and it is where the country wants to go energy-wise. Although we are currently working on this, we still lack the resources, so investment is welcome in this area.
As you can see, there are many different areas of opportunity for international investors. We have liberalized the electricity sector and we strongly support private partnerships. We have many private public partnerships (PPP) in the telecom area. Broadband has been brought in thanks to a PPP; we are currently landing cables, there is still room for PPP's in innovation and technology, we can have various operators in an open competitive market.
WI: Is government looking into attracting more players to the sector through the PPP scheme?
GB: Certainly, in our budget and arrangements, we report on the PPP's results. Many potential partners want to move into PPP's, and we have indicated that government wishes to follow this road as well in order to expedite investments in priority areas.
We have had suggestions from Chinese companies that unfortunately have not materialized, but we want investors all over the world to know that the PPP market in energy is wide open. Government is willing to entertain these partnerships in many different sectors and industries if it can work beneficially for the country and the investors. It has to be a win-win approach.
WI: Regarding the oil and gas sector, can you tell us about the current exploration projects, what potential exists and where do you see this industry in the next five years?
GB: With regards to oil and gas, a Russian company invested in drilling one well that showed significant amount of gas from the findings. We obviously want to move on to the second stage and drill two other wells to determine definitively the location of production drill-holes, quantity, quality and composition (gas, condensate, oil) of the discovery.
We had some speculative explorations by a ship from Norway, and there has been significant interest in the data gathered. We always knew that there was something there, so after the company found the great discovery that exists, the ships started coming in and surveys started being done in areas where it had never been done before. Obviously, there will be greater interest in areas close to Venezuela and Trinidad and Tobago, but even outside of those areas, the data show great potential. For this reason, Trinidad and Tobago, after seeing the data, agreed to build a pipeline that is expected to transport whatever gas is found in Grenada's waters via one of their offshore platforms to onshore refining facilities. If you look at the last reports, you will find that they have 1.34 billion TT dollars to build the pipeline, and 110 TT dollars to do the technical studies. As you can see, they are moving into this project speedily. We must now ensure that the second and third wells are drilled, so we can quantify and qualify the findings and commence production.
There is great potential in the oil and gas area, and we have seen much interest from the major players, but it is important that the investors come in at the beginning of the exploration. For this reason I say that the time is ripe for China to come in and look closely at these investment opportunities, because once the concession is given, it will be too late.
WI: What are the mains challenges that hinder the energy sector's development, and how are you working to overcome them?
GB: The main challenges that hinder the sector's development have to do with investment. From an electricity stand point, when we liberalized the sector, there was the issue of the existence of a monopoly, which has now gone to arbitration and will be resolved very soon. Once this is resolved I think we will start seeing movement on the interest; investors are waiting to see what happens, but obviously the first company that has the leg in is the one that will reap the rewards. The company that is currently running the power plant has seen the market liberalize and they are no longer interested they say, they want government to buy it back, but as you can imagine, we are not in the business of running power plants, we leave this to the private sector. More competition in the sector will bring cheaper power for the homes and businesses and the people, as well as a new energy mix, where renewables can lead the way.
WI: Another area for investment and partnership is the Gravel Concrete and Emulsion Production Corporation; what can you tell us?
GB: This company is in charge of producing the aggregates and other products that are used in the construction of roads, massive buildings and housing, etc. This company presents important opportunities for investment in equipment and other areas. All such building materials used in Grenada come from this company's operations. They supply the aggregates and they make construction blocks as well. They are even looking into potentially exporting to other countries in the region once the local demand and needs are met. This is another significant area for investment and partnership. And although we do currently have interested investors looking closely into this, it is a competitive process and the opportunity is open to Chinese companies as well.
WI: What message would you like to share with the readers of South China Morning Post?
GB: Grenada is ready for investment; we are well located in a geostrategic position along the sea lane between North and South America. This is ideal for setting up Free Zones. Factories are encouraged.
We also present significant opportunities in the energy sector where we have just liberalized the electricity market and we are now ready to use PPP's as a vehicle for investment. If investors prefer to invest on their own, we have no problem with this; but if you want to partner with government, we will be there at your side. Your investment in the oil and gas sector is also sought. Review the available seismic data.
Outside the energy sector, there are opportunities as well in construction; we have roads and buildings that must be constructed, hospitals, public housing, many of our schools must be refurbished, etc. We have worked with our Chinese partners who have helped us with housing, stadiums, and are now helping with the expansion of the airport; and we obviously welcome them to continue investing and contributing to the country's socioeconomic development.