Pacific Renewable Energy Tender

Project Status ActivePacific small island developing states sids are heavily dependent on diesel for power generation which has resulted in high electricity tariffs. The average supply cost for electricity across the pacific is 0. 47kilo-watt hour kwh which is high by international standards. However this increases significantly for the smaller more isolated sids where the high cost of electricity is negatively impacting economic growth. Over reliance on imported fuel also depletes limited foreign reserves and exposes the sids economies to diesel price spikes. The investment program will target seven of the smaller pacific sids with a combined population of around 500000. All targeted sids have populations less than 200000 with four less than 55000. Pacific sids have recognized the need to structurally shift power generation from diesel to renewable energy and all have aggressive national renewable energy targets in some cases of up to 100. While the seven target sids are endowed with cost-competitive renewable energy resources lack of access to adequate funding has limited the uptake of renewable energy and most sids have been unable to secure sufficient funding to significantly increase the renewable energy share of generation. In order to fill the financing gap pacific sids are encouraging private sector in the form of independent power providers ipps to invest in the sector however there are significant barriers to entry of the private sector. Additionally sids face significant capacity barriers to plan design implement and manage renewable energy investments. Ongoing sector reform is required to encourage the structural shift to renewable energy. In general pacific sids are not currently on track to meet their aggressive renewable energy targets. If all proposed renewable energy projects with secure financing in the target sids are constructed two sids would have over 40 renewable energy however 4 of 8 would still only have less than 5 renewable energy. The investment program will address the upfront financing barrier for renewable energy promote private sector investment develop capacity for planning and project preparation of renewable energy and support regulatory reforms. The proposed program will benefit sids economies through i improved balance of trade by reducing fossil fuel imports ii improved energy security iii downward pressure on tariffs and iii reduced greenhouse emissions. The proposed investment program will support implementation of the regional framework for action on energy security in the pacific faesp which was endorsed by pacific leaders in 2010. The faesp outlines a roadmap to achieving secured supply efficient production and use of energy for sustainable development through the following actions i leadership governance coordination and partnerships ii capacity development planning policy and regulatory frameworks iii energy production and supply iv