US$33.6 million approved towards major renewable energy project in Pacific nation burdened with some of the world’s highest electricity costs
WASHINGTON D.C., June 20, 2017 – Reliable renewable energy is a step closer for Solomon Islands, a country facing some of the world’s highest per capita energy costs, following the World Bank Group’s commitment to the Tina River Hydro renewable energy project.
The Board of Executive Directors of the World Bank today approved US$33.6 million in funding for the Tina River Hydropower project in the Solomon Islands, which aims to reduce the cost of electricity and end the country’s near-total reliance on diesel fuel for power.
Electricity costs in the Solomon Islands are among the highest in the world, placing huge strains on all facets of life in Solomon Islands; health, education, business and livelihoods. The Tina River Hydropower Project aims to reduce spending on expensive diesel power while also paving the way for the country to exceed its 2025 greenhouse gas emissions reduction target.
“The World Bank support to Tina River Hydro is an important milestone for Solomon Islands as we move towards a green energy future,” said the Hon. Manasseh Sogavare, Prime Minister of Solomon Islands. “We are grateful to the World Bank for its strong commitment to reduce electricity costs for Solomon Islands, and for its dedication in supporting the preparation of this complex nation-building project.”
The renewable energy project, one of the largest projects ever planned for the Solomon Islands, will bring expertise in infrastructure development and operations to the country – and pave the way for further investment and new jobs.
“Energy costs for Solomon Islanders have been too high for too long, burdening lives daily: children cannot study at night, businesses are forced to close early, and basic services continue to suffer,” said Michel Kerf, the World Bank Country Director for Timor-Leste, Papua New Guinea & the Pacific Islands. “This project will contribute to reducing energy costs and help to improve the lives of Solomon Islands families and their communities.”
Under the financing arrangement, the World Bank Group is providing a US$23.4 million credit and a US$10.2 million grant through the International Development Association, the World Bank’s fund for the world’s most in-need countries.
The World Bank joins other partners in supporting the Tina River Hydro Project, including the International Renewable Energy Agency/Abu Dhabi Fund for Development (IRENA/ADFD) facility, the Green Climate Fund, and the Government of Australia. The International Finance Corporation (IFC), the World Bank Group’s private sector arm, has also provided support throughout the development and negotiation process.
Other development partners, including the Asian Development Bank and the Economic Development Cooperation Fund of Korea, have indicated their potential support. Total funding support for the project is expected to be concluded in September 2017.