The FINANCIAL — The Asian Development Bank’s (ADB) Board of Directors has approved the disbursement of a loan of up to $2 million to develop solar energy capabilities and coverage in Samoa.
The ADB-administered Canadian Climate Fund for the Private Sector in Asia will provide an additional $1 million concessional loan and also a preparatory technical assistance grant to help overcome some of the early stage barriers to solar power development in the country. Under the financing package, Jarcon Pty Limited and Sun Pacific Energy Limited (SPEL) will expand a 2.2-megawatt (MW) solar farm in Samoa that is in partial operation.
“Renewable energy sources are vital for Samoa’s efforts to achieve sustainable and inclusive development,” said Jackie Surtani, Director for ADB’s Private Sector Operations Department (PSOD). “The project will increase access to affordable clean energy for the people of Samoa.”
The project will install up to 4 MW of solar power generation, owned and operated by SPEL, an independent power producer (IPP), who sells power to Samoa’s state-owned utility Electric Power Corporation. The project is expected to help the country lower its dependence on fossil fuels by generating an estimated 5.5 gigawatt-hours of solar power annually for 20 years, with estimated carbon emission reduction of 1,644 tons of carbon dioxide equivalent and save an estimated 1.7 million liters of diesel per year. This will help achieve the government’s goal of inclusive, sustainable, and environment-friendly growth, according to ADB.
The project is PSOD’s first energy deal in the Pacific and the first ADB investment supporting an IPP in the region. Concessional financing was needed to help the project reach financial close. “We hope this deal will demonstrate to private sector investors that developing bankable renewable energy projects in the Pacific can be achieved,” added Martina Tonizzo, ADB’s Investment Specialist.
SPEL, the IPP, is preparing to start construction in September 2017 and expects the expansion project to be completed and operating in less than six months. Once the project is completed, the IPP will be able to offer power at a lower price compared to the existing system.