Venezuela’s government is prone to bouts of thuggery. In recent times, desperate for cash, it has resorted to gangsteresque oil debt-collection. “Pay up, you moron,” thundered Diosdado Cabello Cabello, Venezuela’s interior minister, in a fight over $350m in arrears with Luis Abinader, the president of the Dominican Republic, which relies heavily on fossil fuels (see chart). We are the ones who have the oil, he warned on another occasion. The alleged debt harks back to the days of PetroCaribe, a Venezuelan energy-assistance scheme that once offered cheap loans to Caribbean countries that bought its oil. It went bust in 2019. For Caribbean governments the spat is yet another stark reminder of the fragility of their energy supplies.

The Caribbean islands are among some of the world’s most energy-insecure countries. Fossil fuels account for roughly 90% of the region’s electricity generation, and the vast majority of what is needed has to be imported. Barring a couple of energy-rich countries like Trinidad & Tobago and Guyana, the bulk of Caribbean states rely on costly and volatile oil imports. Electricity prices are some of the steepest in the world. Tariffs average $0.25 per kilowatt-hour (kWh) across the Caribbean, more than double the rate in the United States. On the Dutch island of Curaçao, a small colonial-era vestige, consumers can pay up to a whopping $0.40 per kWh. Power outages are common, courtesy of old and poorly maintained grids and the mounting disruptions of climate change. Last week Cuba suffered its third nationwide blackout in just two months, plunging millions into darkness for hours.

Power cuts and high costs are a drag on growth, argues Wazim Mowla, a fellow at the Caribbean Initiative at the Atlantic Council, a think-tank. Take tourism as an example. Although the industry accounts for a big chunk of the region’s GDP, its beach resorts consume a lot of energy, mostly for air-conditioning and lighting. Irritating power cuts and pricey rooms can push holidaymakers to look elsewhere. One working paper published by the IMF found that a 10% increase in oil prices reduced real GDP growth by 0.5 percentage points over half a decade in the Caribbean’s most tourism-dependent economies.

For islands bathed in sun, littered with volcanic rocks and battered by strong winds, the answer seems obvious: to harness cheap, renewable energy. In Belize renewables now account for 80% of electricity generation, mostly in the form of hydropower and biomass. Commissioned in 2018, Montecristi in the Dominican Republic has become the region’s largest solar park, brimming with some 215,000 photovoltaic modules. Dominica is busy drilling geothermal wells. But elsewhere progress is slow. Figures from the International Renewable Energy Agency show that the Caribbean doubled its installed capacity of renewable power to 4,558 megawatts in the decade to 2021. That might sound impressive, but it is roughly equivalent to the power generated by a single large hydroelectric dam.

Several barriers hamper the region’s energy transition. One is scale. Its islands are small and isolated, with limited space for big solar or wind farms, points out Mr Mowla. Its electricity grids are similarly puny and its energy markets lack integration. Two projects that might help, a Caribbean gas pipeline led by Trinidad & Tobago and a regional electricity grid, have been bogged down by regulatory and financial snafus. Add the region’s vulnerability to natural disasters to the mix and it is easy to see why investors are skittish.

Therein lies the bigger issue: financing. Estimates put the upfront costs for the Caribbean’s energy transition at $5bn-7bn. But its governments have little fiscal room. During the go-go years of cheap Venezuelan oil, many doubled down on oil-dependent infrastructure and racked up big debts. Considered “middle-income”, Caribbean countries are usually shut out of concessional funding reserved for poor countries. Private investment, deterred by small-bore and ad hoc projects, has been slow to materialise. Sclerotic utility companies, meanwhile, face little competition or incentive to innovate.

There are some bright spots. A slew of initiatives have cropped up in recent years to relieve those pressures. A climate pact launched by the United States aims to improve Caribbean access to international finance. The World Bank announced $500m in assistance to Caribbean governments for renewable-energy projects last year. But those governments could do more to loosen regulations and improve their administrative capacity. They have every reason to do so: cheap and plentiful energy would be a boon to the region—and keep the debt-collectors off their backs.