Vanuatu to construct US$15 million hydropower plant

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James Lynch, Deputy Director General, ADB’s Pacific Department (right), and Jean Pierre Nirua, Acting Minister of Finance and Economic Management (left)

The Asian Development Bank (ADB) and the Government of Vanuatu have signed an agreement for a US$15.1 million project to increase renewable energy generation and energy access on the islands of Malekula and Espiritu Santo.

“The project will deliver an increased supply of clean, renewable electricity to households on Malekula and Espiritu Santo,” said James Lynch, Deputy Director General of ADB’s Pacific Department. “This will have a positive effect on the livelihoods of rural households and also decrease long-term reliance on diesel fuel.”

The hydropower plant at Brenwe will provide more than 90 percent of the total generated energy for the Malekula grid through to 2040. The electricity grid will be extended to an additional 1,050 households in the two target islands. Newly connected households will be trained on options for electricity-based income generation, electricity safety, and budget management.

Around 75 percent of Vanuatu’s population live in rural areas and have limited access to electricity nationwide, with electrification rates at 33 percent. Where electricity is available in the provinces, the main energy generation source is diesel and other fossil fuels.

“We sought the assistance of ADB to help produce and deliver low-cost hydropower energy and grid extensions in the two targeted provincial centres,” said Jean Pierre Nirua, Acting Minister of Finance and Economic Management. “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 US$2.5 million, sourced from ADB’s ordinary capital resources. ADB’s Special Funds resources will also provide a US$2.5 million grant. The Strategic Climate Fund will contribute a US$7 million grant and the Government of Vanuatu will deliver US$3.1 million.