Montserrat’s government has committed to transitioning to 100% renewable electricity by 2030.
Similar to many small island developing states (SIDS), Montserrat faces the dual challenges of fluctuating global fuel prices and high shipping costs, with the armed conflict between Ukraine and Russia only exacerbating the situation. Montserrat’s government has committed to transitioning to 100% renewable electricity by 2030. To achieve the goal, the government took the decisive step to initiate a public tender for its geothermal potential, aiming to fully replace its imported fossil fuels-based energy generation with locally sourced renewables, specifically geothermal energy.
Montserrat’s geothermal potential is centered on three boreholes, two of which could meet the island’s current electricity demand. Initial estimates showed that the entire project requires an investment of more than USD 20 million (XCD 62.8 million). Covering it from the public purse was not an option. The complex situation required a comprehensive approach to asset procurement, risk management and investor negotiations. Realising the need for external expertise, the government, through the Ministry of Building, Utilities, Infrastructure, Labour, Transportation and Ecclesiastical Affairs (BUILT), requested CONNEX’s support.
Managing a project of this complexity demanded a new level of strategic thinking and process rigour. With CONNEX’s support, we were able to build a transparent and adaptable tendering framework that met international standards, while tailoring it to Montserrat’s unique context. One of the most impactful aspects was the inclusion of climate objectives in the financing strategy — it helped us see beyond the immediate infrastructure to the long-term transformation we’re aiming for.
Colin Fergus, Permanent Secretary, Ministry of Building, Utilities, Infrastructure, Labour, Transportation and Ecclesiastical Affairs (BUILT)
Our Role
After consultation with the government regarding the expertise needed, CONNEX leveraged its network, supporting the government in legal, financial, and strategic advisory services. With the experts’ multidisciplinary offer, the government navigated the complex tendering process and structured the island’s first geothermal project.
Due to the passaging of time and lack of comprehensive maintenance capacities, the reliability of the boreholes remained uncertain. A 2022 performance testing yielded inconclusive results, adding a layer of technical uncertainty to the project’s investment appeal. CONNEX advisors supported Montserrat’s officials to balance investor confidence with clear, transparent communication of the project’s potential as well as its technical realities.
To strengthen the project’s financial appeal and underscore its environmental benefits, CONNEX advisors examined the inclusion of climate objectives in the financing structure. This farsighted approach allowed the government to leverage additional revenue stream options, demonstrating the geothermal project’s financial viability and environmental benefits despite the upfront costs, presenting it as an economically sound and sustainable investment.
Given Montserrat’s limited experience with large-scale energy projects, managing the tendering process for the geothermal initiative presented unique challenges. To ensure transparency and meet local procurement requirements while maintaining the flexibility needed to attract reputable bidders, the advisors introduced best practices in process and change management. These practices allowed Montserrat’s officials to adapt tendering workflows, effectively address unexpected project needs, and navigate complex stakeholder dynamics.
The bid evaluation stage required Montserrat’s officials to rigorously assess technical and financial aspects given the project’s complexity. To ensure a high-quality and transparent assessment, CONNEX supported the government to create an evaluation committee with the necessary expertise. Training sessions prepared committee members to confidently evaluate the bidders’ technical capabilities, financial sustainability, and potential risk factors.
Our Impact
By introducing climate objectives into the project’s logic, Montserrat’s government now has a clearer understanding of the geothermal project’s full value. Although these considerations might result in slightly higher energy prices, they align with Montserrat’s goals for carbon neutrality and demonstrate the project’s alignment with sustainable economic growth.
During the process, CONNEX’s advisors identified legislative gaps, which could affect investor confidence. Key among these were arbitration clauses, which provide an essential dispute resolution mechanism in investment agreements, especially important in high-stakes infrastructure projects. By raising these regulatory gaps, CONNEX’s advisors helped Montserrat’s government to understand their importance as well as areas for improvement to establish an investor-friendly environment and to create a more robust legal landscape for future projects.
Through collaborative discussions, CONNEX’s experts recommended amendments and additions to Montserrat’s regulatory frameworks, helping to lay a solid foundation for the geothermal project and ensuring long-term stability and transparency. These efforts have reinforced Montserrat’s commitment to future-ready regulations that will support not only this project but also attract sustainable investments for years to come.
CONNEX’s experts empowered Montserrat’s officials to manage risks effectively, ensuring that investors could assess the geothermal project’s viability with a comprehensive understanding of both its advantages and technical challenges.
Throughout, CONNEX’s advisors prioritised not only project-related support but also a valuable knowledge transfer as a cornerstone of their support, working sideby-side with Montserrat’s officials throughout the project. Through targeted training on topics such as public-private partnerships (PPPs), power purchase agreements (PPAs), risk sharing, and financing, CONNEX’s advisors equipped Montserrat’s officials with essential skills to engage with bidders, negotiate complex terms – empowering Montserrat’s team for managing large-scale renewable energy projects. Ultimately strengthening Montserrat’s institutional resilience and readiness for future projects.
This geothermal initiative is more than an energy project, it’s a nation-building step toward a cleaner, more self-reliant Montserrat. With CONNEX’s support, we were able to design a transparent process that aligned with our climate ambitions and our people’s needs. We’re not just rehabilitating wellheads, we’re laying the groundwork for energy independence and economic resilience. That’s the essence of our ‘One Montserrat’ approach: strategic action, sustainable transformation, and a future built by and for our people.
Hon Veronica Dorsette-Hector, Minister of Building, Utilities, Infrastructure, Labour, Transportation and Ecclesiastical Affairs (BUILT)
The CONNEX team is available to answer your questions and provide any clarification you may require. Please feel free to contact us for assistance or additional details.
