News and Events

News Release

Email this page   Print this page

MANILA, PHILIPPINES - ADB will help prepare a renewable power sector development project for Fiji Islands through a US$650,000 technical assistance (TA) grant.

Power in the Fiji Islands is currently supplied by the Fiji Electric Authority (FEA), a corporate utility fully owned by the Government. While FEA currently provides electricity to about half the population, electricity demand has been growing at 5% yearly over the last five years, and is expected to continue to grow faster in the coming years.

To meet the growing demand, FEA increased its diesel capacity in the past two years. But with global fuel prices increasing, this led to higher costs, and consequently, higher tariffs for consumers.

"Ensuring that generation, transmission, and distribution capacity is enough to meet electricity demand is a key challenge facing the power sector," says Carol Litwin, an ADB Senior Economist. "At the same time, the generation mix must improve to make the cost of electricity more predictable."

The Government envisions a resource-efficient, cost-effective, and environmentally sustainable energy sector. To achieve this, FEA has embarked on a strategy to diversity its generation sources and promote clean and renewable energy. The financing needs for FEA's plans over the next five years are estimated at $300 million.

"This will reduce the exposure of FEA, and ultimately the consumers, to foreign exchange risks and global fuel price hikes. In addition, it is consistent with the need to adapt to climate change and variability, to which countries in the Pacific, including Fiji Islands, are vulnerable to," adds Ms. Litwin.

The TA will help prepare a project that will expand, at the least cost, FEA's program for renewable and indigenous resources, as well as upgrade FEA's transmission and distribution networks.

The TA will also assess FEA's financial performance, analyze the "climate-proofing" of the proposed project to withstand extreme climate events, and assess the possibility of using the clean development mechanism for the project.

The Government will contribute $280,000 equivalent towards the TA's total cost of $930,000. The Ministry of Works and Energy is the executing agency for the TA, which is due for completion in September 2006.