|
Tonga's electricity service will be improved and expanded as a result of the approval today of a US$4.9 million concessional loan by the Asian Development Bank for the Second Power Development Project.
A US$300,000 technical assistance grant will also be provided by the ADB to develop the capability of the national utility, Tonga Electric Power Board, and to help the Government better manage the rural and outer islands electrification program. The ADB is also encouraging the Tonga utility to take further steps towards corporatization.
The Pacific island nation has four main island groups and the project will benefit the more densely populated Vava'u, Ha'apai and Tongatapu groups. Tongatapu, which has 65 per cent of the 100,000 population and the capital of Nuku'alofa, will have a major overhaul of three of four generating units with a combined 3,000 kW (kilowatt) capacity. The central Vava'u group will have its installed capacity raised 50 per cent with two new 300-kW (kilowatt) diesel generating units. Power distribution systems will be upgraded -- and electricity losses curtailed -- in Tongatapu, Vava'u, Ha'apai and 'Eua.
The project is intended to meet rising demand for power caused by growth in agro-industry, tourism, commercial and other service sectors.
Tonga has a total installed capacity of about 11,400 kW, a third of which has been installed under the ADB's first power development project (approved in 1991, the project's power generation facilities have been in commercial operation since October 1995).
The second project will be implemented by the Tonga utility and is scheduled for completion by the end of 2001. Environmentally, all Tonga's diesel generating units use highly refined automotive diesel oil which minimizes the emission of sulfur dioxide and other gases.
The Bank loan will cover the foreign exchange cost, or 70 per cent, of the project's total cost of US$7.1 million. The loan will come from the ADB's soft loan window which means it is interest-free, repayable over 40 years, including a 10-year grace period, and carries a service charge of one per cent per annum.