Loan agreements for energy projects have been signed by Tonga and the Asian Development Bank last week, to help the transition from dependency on diesel fuel imports to renewable energy. The ADB and the governments of Solomon Islands and Tonga signed grant and loan agreements for energy projects on the sidelines of COP29.
Tonga Minister of Finance, Revenue, and Customs Tiofilusi Tiueti and Mr. Morris signed grant agreements totaling $ 4.6 million. The Asian Development Fund provided $1 million. Cofinancing includes $1.5 million from the Clean Energy Fund (International Climate Initiative of the German government) and $2.1 million from the European Union. The Government of Australia will provide grant financing equivalent to $5.6 million, which will be provided as budget support directly to the Ministry of Finance of Tonga to jointly finance expenditures in relation to procurement of goods and works.
The Tonga Grid Enhancement for Sustainable Energy Transition Project aims to help the Government of Tonga meet its 70% renewable energy target by constructing a new 33 kilovolt (kV) electricity network to evacuate energy from a solar power plant and upgrading a portion of the existing 11 kV network. The project will strengthen the capacity of Tonga Power Limited in constructing and maintaining the 33 kV network and support TPL in developing corporate-level gender policies and action plans. The project aims to significantly reduce Tonga’s reliance on imported fossil fuels, enhance the disaster resilience of its power grid, and improve energy accessibility.
“These transformational energy projects demonstrate ADB’s steadfast commitment to improving energy security, affordability, access, and sustainability across the Pacific,” said Mr. Morris. “They will significantly reduce Solomon Islands and Tonga’s reliance on fossil fuels and enhance the disaster resilience of Tonga’s power grid.”
Solomon Islands
Solomon Islands Minister for the Environment, Climate Change, Disaster Management and Meteorology Trevor Mahaga and ADB Vice-President for East and Southeast Asia, and the Pacific Scott Morris signed a $10 million concessional loan agreement and a $5 million grant agreement, which will help fund the Solomon Islands Renewable Energy Development Project. The Saudi Fund for Development is cofinancing the project with an amount of $10 million.
The Solomon Islands Renewable Energy Development Project will implement solar farms in Guadalcanal and Malaita province with a total capacity of 2.5 megawatts, install Solomon Islands first utility-scale grid-connected battery energy storage system for grid integration of more renewable energy, support power sector reforms, and help create the enabling environment for more private sector participation and investment into renewable energy. Those activities will be supplemented with capacity building support to the Solomon Islands Electricity Authority to improve its ability to sustainably operate and maintain the battery energy storage system.
The grants come from the ADF, which provides grants to ADB’s poorest and most vulnerable countries. It is replenished every four years by the ADF’s donor countries.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members—49 from the region.
