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ADB, Vanuatu sign deals for $15.1m project to increase renewable energy production

Published 13 October 2017

The Asian Development Bank (ADB) and the Vanuatu government have signed agreements for a $15.1m project to increase production of renewable energy and improve energy access in the islands of Malekula and Espiritu Santo.

The Vanuatu Energy Access Project will be financed from the Pacific Renewable Energy Investment Facility, which is supported by the ADB.

ADB will provide a concessional loan equivalent to $2.5m from its ordinary capital resources and a $2.5m grant from the Special Funds.

The Strategic Climate Fund will provide a $7m grant and the Government of Vanuatu will contribute $3.1m.

The project involves construction of a hydropower plant at Brenwe, which will reduce the country’s dependence on diesel and other fossil fuels for power generation.

Over 90% of the electricity generated is expected to be supplied to the Malekula grid through 2040.

The grid will cover an additional 1,050 households in the two islands and these households will be trained on electricity-based income generation, electricity safety, and budget management.

ADB’s Pacific Department deputy director general James Lynch said: “The project will deliver an increased supply of clean, renewable electricity to households in Malekula and Espiritu Santo.”

“This will have a positive effect on livelihoods of rural households and will also decrease long-term reliance on diesel fuel.”

Vanuatu’s Acting Minister for Finance and Economic Management Jean Pierre Nirua said: “We sought the generous assistance of ADB to help produce and deliver low-cost hydropower energy and grid extensions in the two targeted provincial centers.”

“Once the renewable energy arrives in Malekula and Espiritu Santo, the lives of the people in both islands will significantly change for the better. The supply of low-cost energy will greatly enhance increased business activity and contribute to better economic growth in the villages,” Nirua added.