A landmark agreement between Energy Fiji Limited (EFL) and IFC to deliver the largest solar project of its kind in the Pacific to date has been hailed a transformative step that will take the island nation closer to its goal of sourcing 100 percent of its energy needs from renewable sources.
The project, worth around US$15 million, will reduce the country’s dependence on imported fossil fuels and at the same time cut harmful greenhouse emissions, boosting the nation’s resilience in the face of the impacts of climate change. It has the potential to transition as many as 14,000 households to solar energy.
The agreement allows EFL and IFC, a member of the World Bank Group, to now move forward with the selection of a private-sector partner in the project to deliver at least 15 megawatts (MW) of solar power to the national grid. IFC will also assist EFL in exploring potential renewable energy sources in Vanua Levu.
“EFL needs to meet Fiji’s demand for electricity, which is growing with the increase in connectivity to rural customers via grid extension and the ever-increasing demand from industries and the business community,” said EFL Chief Executive Officer Hasmukh Patel.
“Ideally, we would like to be self-sufficient in terms of energy sources and reduce our dependency on imported fuel. Fortunately, Fiji has a lot of renewable energy sources and we are working with our development partners to explore these.”
About 45 percent of the country’s power needs are supplied through fossil fuels, 50 percent through hydropower, and the remaining five percent from biomass and wind. At least 90 percent of Fijians are connected to EFL’s grid, which needs a total generation capacity of 267 MW daily.
“The private sector will be crucial in the Fijian Government’s target of sourcing 100 percent of its power generation from renewable energy by 2030,”
IFC Resident Representative in Fiji, Kiribati, Samoa, Tonga, and Tuvalu, Deva De Silva said.
“Through this partnership with EFL, we hope to demonstrate how the private sector can be attracted to invest in renewable energy through a transparent process and well-structured project, setting an example for other Pacific nations.”
IFC has been supported by the governments of Australia and New Zealand through the Fiji Partnership and the Danish Government to carry out this solar project in Fiji.
The development of more renewable energy sources paves the way for Fiji to significantly lower its fuel import bill, which was about US$500million (FJD$1.17billion) in 2019 and accounted for 20 percent of the country’s total imports.
As part of its push for the use of more renewable energy sources, IFC has also been advising the government of Solomon Islands on the Tina River Hydropower Development Project, which will see the nation go from almost total reliance on imported diesel to generating the majority of its power needs from renewable energy.
IFC’s work in Fiji is supported by the governments of Australia and New Zealand under the Fiji Partnership to unlock private sector investment, promote sustainable economic growth, and boost shared prosperity in Fiji.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In the fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty, and boost shared prosperity.