ADB Wind, Solar Power Project to Help Yap Cut Costly Fuel Imports

YAP, FEDERATED STATES OF MICRONESIA – The Asian Development Bank (ADB) is to fund wind and solar power facilities on Yap to slash fuel imports and strengthen energy security in the sparsely populated remote island group of the Federated States of Micronesia.

“The main island of Yap is 100% dependent on imported diesel for power generation, and the economy is highly vulnerable to fuel price movements, with imports making up about 15% of gross domestic product,” said Robert Guild, Director of the Transport, Energy, and Natural Resources Division of ADB’s Pacific Department. “Energy from renewable sources will cut the over reliance on fossil fuel and help stabilize power tariffs, with benefits for both end users and the broader economy.”

ADB has approved loans totaling $9 million for the Yap Renewable Energy Development Project which will include the construction of a wind farm near the largest urban center on the main island, capable of withstanding typhoons. Grid-connected solar panels will also be installed on about 21 government buildings across the island, and a new fuel-efficient diesel generator will replace the existing equipment.

The wind farm is expected to generate power equivalent to about 18% of the current delivered energy supply in Yap, while the solar facilities will produce energy equivalent to 4%. Fuel savings from the more efficient generator will also lower diesel consumption by about 25% from current levels. In total, the project will allow Yap to replace about 22% of the power it generates from diesel.

More wind and solar energy will help stabilize power tariffs by reducing the impact of fluctuating diesel prices. It will also have a number of positive social and economic spin-offs including easing financial strains on low income households, encouraging more private sector businesses, and providing potential employment opportunities for construction, maintenance and other support for the new installations.

ADB’s financing includes an ordinary capital resources loan of almost $4.7 million and a loan of nearly $4.4 million from the concessional Asian Development Fund. The Yap State Government will provide counterpart funds of over $2.1 million for a total project cost of more than $11.1 million. The project will be carried out over 4.5 years with an estimated completion date of June 2017.