CAF, the development bank of Latin America and the Caribbean, has approved a $100m loan to foster energy sector reforms in the Bahamas, marking a significant step towards modernising infrastructure and expanding renewable energy sources.

The initiative enhances affordability and resilience for Bahamian households and businesses.

The funds are earmarked to bolster elements crucial to executing the country's National Energy Policy.

These resources from CAF will aid the government of the Bahamas by consolidating regulatory frameworks, advancing infrastructure modernisation, fostering renewable energy adoption and enhancing energy efficiency.

The move aligns with CAF's Green Agenda while supporting national efforts to mitigate climate change through cleaner, sustainable power sources.

It is expected to improve the reliability of Bahamian electricity systems and reduce generation costs while heightening climate shock resilience.

These reforms are also expected to entice fresh investments into local energy infrastructure.

The programme reinforces institutional capabilities that pave pathways for long-term investments centralised around an efficient transition towards alternative energies.

This backing from CAF is its first sovereign financing to the Bahamas since it became a shareholder in November 2024.

CAF executive president Sergio Diaz-Granados stated: “The Bahamas is one of CAF's newest shareholder countries, and we are proud to approve our first sovereign operation in support of its national commitments to more sustainable energy.

"This approval reflects our commitment to be a reliable partner in the country's path towards sustainable and inclusive growth. We understand the unique challenges faced by small island states and stand ready to further deepen our collaboration with the Bahamas."

CAF has also sanctioned $5.2bn for projects across ten Latin American and Caribbean countries, focusing on infrastructure, climate action, human development, urban mobility and energy transition.