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$30m project

Friday, October 13, 2017

PORT Vila, Vanuatu - The Asian Development Bank (ADB) and the Government of Vanuatu yesterday signed agreements for a $US15.1 million ($F30m) project to increase renewable energy generation and energy access in the islands of Malekula and Espiritu Santo.

The loan and grant agreements for the Vanuatu Energy Access Project, approved by ADB's board of directors in September, was signed by James Lynch, deputy director general of ADB's Pacific Department, and Jean Pierre Nirua, acting Minister of Finance and Economic Management at a ceremony in Port Vila.

"The project will deliver an increased supply of clean, renewable electricity to households in Malekula and Espiritu Santo," said Mr Lynch.

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

The project, which will be financed from the ADB-supported Pacific Renewable Energy Investment Facility approved in June, will construct a hydropower plant at Brenwe which will provide more than 90 per cent of the total generated energy for the Malekula grid through to 2040.

The electricity grid will be extended to additional 1050 households in the two target islands.

Newly connected households will be trained on options for electricity-based income generation, electricity safety, and budget management.

About 75per cent of Vanuatu's population lives in rural areas and have limited access to electricity nationwide, with electrification rate at a mere 33 per cent.

Where electricity is available in the provinces, the main energy generation source is diesel and other fossil fuels.

"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," said Mr Nirua.

"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."

To help fund the project, ADB will provide a concessional loan equivalent to $US2.5m ($F5m), sourced from ADB's ordinary capital resources. ADB's Special Funds resources will also provide a $US2.5m ($F5m) grant.

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