Selected Issues Papers

Low efficiency and reliability in the energy sector, paired with high costs, dampens competitiveness and holds up growth in The Bahamas. This chapter takes stock of the country’s electricity sector and examines the potential macroeconomic impact of the government’s proposed electricity sector reform that seeks to increase renewable energy and modernize transmission and distribution infrastructure. Over the medium-term, the reform has the potential to narrow the current account deficit, reduce vulnerability to commodity price shocks, boost growth, and significantly reduce CO2 emissions. However, such power projects should have a clear delineation of risk sharing between the private and public sector.