A series of crucial final agreements have been signed in Sydney for the long-awaited Tina River Hydropower Development Project in Solomon Islands, to usher in the start of construction.
The key commercial agreements include the On-lending Agreement between the Tina River Hydropower project company and Solomon Islands’ Ministry of Finance & Treasury, as well as agreements related to the funding support from the Asian Development Bank (ADB), which have confirmed a commitment of $30 million to the project.
Other than ADB, project stakeholders include Abu Dhabi Fund for Development, the Australian Government, Green Climate Fund, the Korea-EX-IM Economic Development Cooperation Fund, and the World Bank Group.
The planned 20-MW project will significantly reduce the cost of electricity for Solomon Islanders. It is also expected to dramatically reduce Solomon Islands’ greenhouse gas emissions, by cutting reliance on expensive diesel petrol in favor of clean, renewable sources. The project will see Honiara’s grid shift from 3% renewable in 2017 to 68% at the time the project is commissioned; expected in 2024.
Solomon Islands has a near-total reliance on expensive diesel petrol for electricity generation and at $0.82/kW has among the highest electricity costs in the world, almost double the average for Pacific Island countries. This places a huge burden on families, communities, businesses and government services, resulting in only 16% of Solomon Islanders having access to the country’s electricity grid.
Solomon Islands minister for finance and treasury, the Hon. Harry Kuma, was joined for the signing in Sydney by officials from K-water and Hyundai Engineering Company, a major shareholder in Tina Hydropower Limited, together with the World Bank and its sister organization, the International Finance Corporation (IFC) — both members of the World Bank Group — and ADB.
“Tina River Hydro is a project rooted in our history and with branches that will grow into our future,” said Minister Kuma. “The signing of these agreements … will further enhance the Public Private Partnership that the Solomon Islands government is adapting for the financing of the Tina River Hydro Project; the first such arrangement for infrastructure in the Solomon Islands.”