WASHINGTON, April 20 (UPI) -- Renewable energy development in Latin America and other Western Hemisphere countries will receive a major cash boost over the coming years to reduce dependence on fossil fuels, the Inter-American Development Bank said.
The new incentive for renewable energy comes at the same time as governments in Latin America -- Brazil, Ecuador, Mexico and Venezuela -- have laid out plans for increased spending to develop hydrocarbon resources.
The latest plans for crude oil exploration and development were announced by Venezuela as IDB unveiled its program for cash to boost renewable energy. IDB said it will increase its financing for renewable energy and climate-related projects to $3 billion a year by 2012.
IDB President Luis Alberto Moreno made the announcement as he addressed energy ministers of several countries at the bank's headquarters in Washington. Representatives from 32 Western Hemisphere countries attended the event, including U.S. Energy Secretary Steven Chu and Secretary of State Hillary R. Clinton.
The IDB support will supplement efforts under way and funded by the United Nations and other aid agencies.
Moreno cited demands faced by IDB for support to developing renewable energy resources and in combating the effects of climate change.
IDB lending for energy-related projects is likely to reach $1.5 billion this year, up from $457 million approved in 2008, the bank said.
The IDB funding promise follows a major capital increase initiated last year. The IDB board of governors in 2009 approved a record general capital increase of $70 billion.
Moreno said the capital increase would enable the bank to double its clean and sustainable energy lending program.
IDB said it wants to focus on four broad areas, from increased renewable energy investment in the poorer member countries, fostering energy integration throughout Latin America and the Caribbean, promoting energy efficiency and helping governments prepare for climate change.
As part of its new strategy, the bank plans to seek the development of a new energy infrastructure in Haiti to harness the country's wind, solar and hydroelectric potential. Although initially expected to cost $1 billion, the switch could save Haiti hundreds of millions of dollars a year in fossil fuel imports, Moreno said.
"Of course, $1 billion is a lot of money. And many technical and regulatory obstacles would have to be overcome," he said. "But imagine what it would mean to Haiti to reduce its burden from fuel imports.
"Furthermore, this would prove that renewable energy isn't a luxury but rather a smart way of unleashing human potential in even the most difficult of settings," Moreno said.
The bank is teaming with the U.S. Department of Energy and other agencies inside and outside the region to establish the Energy Partnership for the Americas Innovation Center.
Leading experts in renewable energy and energy efficiency are likely to be associated with the center, which will serve as a clearing house for knowledge and an incubator for energy projects backed by governments and private sector investors.
Chu said increased cooperation and collaboration on key energy and climate issues would lay the "foundation for broad-based economic growth while helping to protect our environment."