The Asian Development Bank (ADB) has approved a new Pacific Renewable Energy Investment Facility which will finance a series of renewable energy projects and sector reforms in the smallest 11 Pacific island countries consisting of the Cook Islands, the Federated States of Micronesia, Kiribati, Nauru, Palau, the Republic of Marshall Islands, Samoa, the Solomon Islands, Tonga, Tuvalu, and Vanuatu.
The target countries face similar development challenges including small populations, limited resources, remoteness, and vulnerability to natural disasters.
“ADB is rapidly expanding our financing for renewable energy in the Pacific and have a strong portfolio of 13 renewable energy projects in 9 of the targeted 11 small Pacific economies over the next 3 years,” said Anthony Maxwell, Principal Energy Specialist from ADB’s Pacific Department. “The Facility was developed to respond to the growing demand from the region and will provide innovative financing mechanisms and upscale support for the countries’ sector reform programs. This is the first time ADB has developed such a facility in the Pacific”.
The facility will support the target countries to transform their diesel-based power systems to sustainable renewable energy generation sources. The facility includes cumulative ADB financing of up to $200 million. ADB will also be sourcing additional cofinancing to support the facility which will streamline ADB internal procedures to enhance its ability to process small-value projects in the target small countries faster with lower transaction costs.
The projects planned for this new facility will include solar power, wind power, hydropower, and grid rehabilitation. The first three projects to be supported under the facility will be in the Cook Islands, Tonga, and Vanuatu. It will also support regional approaches for energy sector reform, private sector development, and capacity building.
