Project Name Energy Access Project
Project Number 49450-008
Country / Economy Vanuatu
Project Status Active
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0543-VAN: Energy Access Project
Asian Development Fund US$ 2.50 million
Grant 0544-VAN: Energy Access Project
Strategic Climate Fund US$ 7.00 million
Loan 3572-VAN: Energy Access Project
Concessional ordinary capital resources lending US$ 2.50 million
Grant 0811-VAN: Energy Access Project (additional financing)
Asian Development Fund US$ 6.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Energy / Renewable energy generation - small hydro

Gender Effective gender mainstreaming
Description The project will increase energy access and renewable energy generation in the two islands of Espiritu Santo and Malekula, being second and third largest population centers after Efate. The project will assist Vanuatu install hydropower generation to replace diesel generation in Malekula and will extend the distribution grid in both Malekula and Espiritu Santo. Project preparatory technical assistance was used in project preparation.
Project Rationale and Linkage to Country/Regional Strategy

Access to electricity nationwide in Vanuatu is low (33%), however drops even further in rural areas. Low access to reliable, affordable electricity has negative impact on the livelihoods of households, particularly rural households. Where electricity is available in the provinces, it is largely diesel generated. Cost of electricity is high, however, quality of supply is high which is partially due to the electricity grids being operated by the private sector. High cost and limited access to electricity is having a negative impact on economic development, particularly in the provinces. Over-reliance on imported fossil fuels (diesel) also has a negative macro-economic impact. In order to address these issues, the Government of Vanuatu has requested ADB to support development of least-cost renewable energy (hydropower) and grid extensions in targeted provincial centers.

In order to address the above barriers, the Project will construct the Brenwe Hydropower Plant which would displace an estimated 90% of the diesel generation in Malekula. The Project will increase the residential customer base in Espiritu Santo by 25% and in Malekula by 90%. Hydropower has been assessed to be the least-cost baseload generation option for Malekula.

The project is integrated into government long term strategic planning. The project supports the government's Priority and Action Agenda (PAA) 2006-2015, which aims to (i) reduce the cost of services, (ii) extend the coverage of rural electrification, and (iii) promote the use of renewable energy. The project is aligned with the government's action document Planning Long, Acting Short, 2009-2012 which aims to (i) ensure that electricity is more widely available at a fair price, and (ii) encourage investment in renewable electricity. The project is included in the Vanuatu National Energy Road Map (NERM) 2014.

Impact

Livelihoods of households in Espiritu Santo and Malekula improved

Project Outcome
Description of Outcome

Supply of clean renewable electricity to households in Espiritu Santo and Malekula increased

Progress Toward Outcome After the commissioning of the Brenwe Hydropower Plant and transmission lines in Malekula, scheduled for Q3/2023, clean and renewable electricity will be supplied to households in Malekula.
Implementation Progress
Description of Project Outputs

Brenwe Hydropower Plant put into operation by the government

Distribution grid extended and additional households connected by the government

Capacity building for project beneficiaries undertaken

Status of Implementation Progress (Outputs, Activities, and Issues) The contract for the Brenwe Hydropower Plant was awarded on 13 November 2019 and was signed on 21 January 2020. Due to COVID-19 travel restrictions, the Contractor could only mobilize on 24 March 2021. The completion of the hydropower plant and transmission lines in Malekula is scheduled for Q3/2023, and the completion of the transmission lines in Espiritu Santo is scheduled for Q4/2023.
Geographical Location Nation-wide, Brennwe
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects An initial environmental examination was prepared. The main potential environmental impacts are related to the construction of the access road, the removal of vegetation within a modified habitat, the plant installation at the intake and powerhouse sites, and vegetation trimming along the transmission line corridor. Environmental management plans have been updated based on the detailed designs.
Involuntary Resettlement The project had land acquisition impacts for the Brenwe Hydropower Plant are not deemed significant. The transmission line extension at Espiritu Santo follows the existing road corridor without any resettlement impacts. No physical relocation or loss of major income sources is expected from the implementation of the project.
Indigenous Peoples Melanesian Ni-Vanuatu groups constitute the majority population in the project area, their institutions are not separate from mainstream society, and these groups are not vulnerable because of their ethnicity.
Stakeholder Communication, Participation, and Consultation
During Project Design The stakeholders are the Vanuatu government (MFEM, MOCC, MLNR, VPMU, MIPU, PWD, Provincial Councils, affected land owners, and other relevant agencies) and development partners.
During Project Implementation The stakeholders are the Vanuatu government (MFEM, MOCC, MLNR, VPMU, MIPU, PWD, Provincial Councils, affected land owners, and other relevant agencies), and development partners.
Responsible ADB Officer Elbling, Elmar
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Liaison and Coordination Office in Sydney, Australia (PLCO)
Executing Agencies
Ministry of Finance & Economic Management
Timetable
Concept Clearance 18 Dec 2012
Fact Finding 27 Jan 2015 to 30 Jan 2015
MRM 05 Mar 2015
Approval 26 Sep 2017
Last Review Mission -
Last PDS Update 26 Apr 2023

Grant 0543-VAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Sep 2017 11 Oct 2017 18 Dec 2017 31 Mar 2024 - 06 Apr 2022
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 2.50 Cumulative Contract Awards
ADB 2.50 14 Feb 2024 2.50 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 14 Feb 2024 2.50 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory Satisfactory - Partly satisfactory

Grant 0544-VAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Sep 2017 11 Oct 2017 18 Dec 2017 31 Mar 2024 31 Mar 2026 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 7.00 Cumulative Contract Awards
ADB 0.00 14 Feb 2024 0.00 6.72 96%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 7.00 14 Feb 2024 0.00 6.61 94%

Grant 0811-VAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
03 Dec 2021 07 Dec 2021 20 Dec 2021 31 Mar 2024 31 Mar 2026 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 9.10 Cumulative Contract Awards
ADB 6.00 14 Feb 2024 6.01 0.00 100%
Counterpart 3.10 Cumulative Disbursements
Cofinancing 0.00 14 Feb 2024 5.40 0.00 90%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory Satisfactory - Satisfactory

Loan 3572-VAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Sep 2017 11 Oct 2017 18 Dec 2017 31 Mar 2024 - 18 Oct 2022
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 2.50 Cumulative Contract Awards
ADB 2.50 14 Feb 2024 2.42 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 14 Feb 2024 2.42 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory Satisfactory - Satisfactory
 
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