Pacific Islanders Awarded Renewable Energy Funding

The World Bank Board of Executive Directors approved US$9.5 million provided by the Global Environment Facility to fund renewable energy electricity supplies for rural communities in Papua New Guinea, the Solomon Islands, Vanuatu, Fiji and the Republic of the Marshall Islands.

In the Pacific Islands, access to electricity can be as low as 7% in rural areas of Papua New Guinea to a high of 65% in Fiji. However, power generation has been heavily dependent on diesel and most lighting is still provided by kerosene lamps. With the cost of diesel and kerosene soaring in the past two years, many rural households have been spending 25% or more of their income on fuel. Schools in Papua New Guinea have been spending around 70% of their budget on diesel for electricity.

The Sustainable Energy Financing project will draw on the Pacific Islands good renewable energy endowments, particularly solar photovoltaic (PV), pico-hydro and biofuels (coconut oil). The project will also provide technical assistance so that quality energy equipment, such as solar PV kits, pico-hydro units and coconut oil tanks, can be provided reliably. The low cost loans over a five-year period provided through ANZ Pacific will help to overcome the previous reluctance of local financial institutions to lend money on affordable terms.

In Papua New Guinea, the Teachers’ Solar Lighting Project, which will continue under this new initiative, has already been a success. Initially set up to provide financing for 2,500 teachers to purchase solar home lighting kits, there are now more than 9,000 teachers on the waiting list and the cost of purchasing the Solar PV kit has been cut in half from 4,200 kina (USD1,235) to 2,100 kina (USD 618).

World Bank experience in China, Sri Lanka and Bangladesh has shown that renewable energy technologies have become a cheaper option for increasing access to electricity for rural households and small enterprises.

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