ADB, Australia Fund Solar to Help Tonga Cut Fuel Bill

ADB, Australia Fund Solar Systems to Help Tonga Cut Fuel Bill, Power Costs

NUKU’ALOFA, TONGA (2 July 2013) – The Asian Development Bank (ADB) and Australia are to fund the construction and installation of solar power systems on nine outer islands to provide a clean, affordable supply of electricity and to help trim the country’s costly imported fuel bill.

“Tonga depends on imported diesel for over 90% of its electricity needs and the high cost imposes a heavy burden on consumers,” said Paul Hattle, Energy Specialist from ADB’s Pacific Department. “Installing solar systems on distant islands will help reduce the fuel bill and give consumers access to a cleaner, more cost effective power source.”

The Outer Islands Renewable Energy Project will fund solar systems on Eua, Vava’u and Ha’apai, along with four outer islands in the Ha’apai group (Uiha, Nomuka, Ha’ano, Ha’afeva), as well as on Niuatoputapu and Niuafo’ou. ADB will provide a $2 million grant from its concessional Asian Development Fund, while the Australian Agency for International Development will extend a $4.5 million grant, which will be administered by ADB. The Government of Tonga will make an in-kind contribution of $300,000 equivalent for a total investment cost of $6.8 million.

Tonga has 176 islands scattered over 700,000 square kilometers, and its small population of just over 100,000 people relies largely on diesel fuelled power. The country is highly vulnerable to international fluctuations in fuel prices and the government is seeking to lower imports to reduce the cost of electricity, which can run to as high as $0.74 or more per kilowatt hour in some remote areas.

The project will build solar generating facilities with a total distribution capacity of 1.25 megawatts at peak use, reducing diesel imports by an estimated 0.48 million liters a year. The new systems will be connected to state-owned and community-owned power distribution networks on most of the target islands, with an existing solar home system on Niuafo’ou to be boosted, by the installation of additional capacity.

To ensure continuity, consultants will provide training on the operation and maintenance of the solar facilities to project staff, national and local power officials, and beneficiaries. They will also extend management services for at least 5 years after completion of the training. State-owned Tonga Power Ltd and private companies are then expected to take over management.

The project, to be carried out by the Ministry of Finance and National Planning, will be implemented over 6 years with an estimated completion date of end-December 2019.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2012, ADB assistance totaled $21.6 billion, including cofinancing of $8.3 billion.

ENDS

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