Cook Islands : Renewable Energy Sector Project

Sovereign Project | 46453-002

The Renewable Energy Sector Project will support the government's policy to increase power generation from renewable sources and enhance the government's institutional capacity for implementing the Cook Islands Renewable Energy Chart Implementation Plan (CIRECIP), 2012-2020, which sets a target of supplying electricity from renewable energy sources on all inhabited islands by 2020. It will construct new solar photovoltaic power plants on up to six islands of Cook Islands' southern group. The project will result in annual savings of 1.09 million liters of diesel consumption and annual reduction of 2,930 tons of carbon dioxide emission, for greater energy security and sustainability in the Cook Islands.

The impact of the project will be increased energy security in an environmentally sustainable manner. The outcome will be an increased access to a higher share of electricity generated by renewable energy sources.

Project Details

Related Projects

Project Name Renewable Energy Sector Project
Project Number 46453-002
Country / Economy Cook Islands
Project Status Active
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0415-COO: Renewable Energy Project
European Union US$ 7.26 million
Loan 3193-COO: Renewable Energy Project
Ordinary capital resources US$ 11.19 million
Grant 0493-COO: Renewable Energy Sector Project - Additional Financing
Global Environment Facility Grant US$ 4.26 million
Grant 0548-COO: Renewable Energy Sector Project-Additional Financing
Green Climate Fund US$ 12.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Energy / Renewable energy generation - solar

Gender Some gender elements
Description

The Renewable Energy Sector Project will support the government's policy to increase power generation from renewable sources and enhance the government's institutional capacity for implementing the Cook Islands Renewable Energy Chart Implementation Plan (CIRECIP), 2012-2020, which sets a target of supplying electricity from renewable energy sources on all inhabited islands by 2020. It will construct new solar photovoltaic power plants on up to six islands of Cook Islands' southern group. The project will result in annual savings of 1.09 million liters of diesel consumption and annual reduction of 2,930 tons of carbon dioxide emission, for greater energy security and sustainability in the Cook Islands.

The impact of the project will be increased energy security in an environmentally sustainable manner. The outcome will be an increased access to a higher share of electricity generated by renewable energy sources.

Project Rationale and Linkage to Country/Regional Strategy

Socioeconomic Context and Sector Performance.

The Cook Islands is a Pacific island country divided into two island groups with an estimated total population of 18,600 people. The northern group consists of seven low-lying and sparsely populated coral atolls, while the southern group consists of eight fertile volcanic islands. About 92% of the population lives in the southern group, which includes the main island of Rarotonga. Economic development is hindered by the country's limited size, isolation and distance from markets, lack of natural resources, periodic devastation from natural disasters, and inadequate infrastructure.

The Cook Islands depends heavily on imported fuels. Its total fuel import bill in 2012 was $29.8 million, or 25% of total imports and 9% of gross domestic product. The total installed power generation capacity in the Cook Islands is 11.75 megawatts. Diesel-powered generators constitute about 99% of the total electricity generating capacity. More than 99% of all households are grid connected, 5.5% have additional solar photovoltaic home systems, and 1.0% use small diesel generators. According to the CIRECIP, current electricity demand in the Cook Islands is about 33.0 gigawatt-hours, and is forecast to grow modestly to 38.5 gigawatt-hours by 2020. The southern group is the dominant load center, accounting for 98% of current and future load demand.

Delivery of energy services is undertaken by a state-owned utility on Rarotonga, and by island administration committees on the other outer islands in the northern and southern groups. They are vertically integrated electricity authorities in charge of generation, transmission, distribution, and retail sales of electricity. Assets for energy services are administered and managed by the Cook Islands Investment Corporation, the government's holding company that groups the state-owned enterprises.

Sector Challenges and Opportunities.

Electricity costs in the Cook Islands are among the highest in the Pacific. The reliance on imported fuel is reflected in the high average electricity tariff charged, which was $0.63 per kilowatt-hour (kWh) in 2013. Such a high tariff translates into 4% of annual household expenditure and 15% of annual business entity expenditure. Under the regulations, the utilities can pass on fuel costs directly to consumers and charge an inflation-indexed nonfuel tariff. In Rarotonga, the current tariff is $0.70 per kWh. On the outer islands, due to limited affordability, the government subsidizes a part of the electricity generation cost so the average electricity tariff is $0.57 per kWh. Both are above regional average tariffs.

Volatile diesel fuel prices and heavy reliance on imported diesel fuel for power generation significantly affects the economy and living standards in the Cook Islands. Changing diesel-based power generation to renewable energy sources is expected to reduce the cost of generation by up to 40% and diesel consumption for power generation by up to 95%, and will contribute to sustainable social and economic development. Average annual solar irradiation of around 1,900 kWh per square meter constitutes a major renewable source for power generation.

In 2011, the government issued the Cook Islands Renewable Energy Chart, which sets a target of supplying 50% of inhabited islands with power from renewable sources by 2015, and 100% of the inhabited islands by 2020. It also launched the CIRECIP in 2012, which incorporates a development schedule for electricity generation from renewable sources.

Institutional Framework.

The government has a coherent institutional framework to guide renewable energy development. The National Renewable Energy Committee was formed in 2010 to lead the renewable energy project and ensure timely achievement of the government's renewable energy policy.8 A Renewable Energy Development Division (REDD) was established in 2010 within the Office of the Prime Minister and is responsible for implementing the CIRECIP. REDD is under the supervision and guidance of the Office of the Energy Commissioner (OEC), which is responsible for energy sector planning and management, including electricity tariff regulation and standardization of electricity services.

Impact

Increased energy security in an environmentally sustainable manner

Project Outcome
Description of Outcome

Increased access to a higher share of electricity generated from renewable energy sources

Progress Toward Outcome (i) On all Phase 1 subprojects (Mauke, Mitiaro, Mangaia, Atiu), commissioning has been done; (ii) on Phase 2 subproject (Aitutaki), the systems have been operating since September 2019 and no issues have been reported; (iii) on Rarotonga Airport West BESS, Completion Certificate was issued in October 2019; (iv) on Rarotonga Airport South BESS Lot 2, it is online and maintains constant state of charge and is configured to provide network frequency and voltage support; and (v) on Rarotonga Power Station BESS Lot 1, development and design is complete. Civil Works on site was completed and clean-up and demobilization from the site has been carried out.
Implementation Progress
Description of Project Outputs

1. Solar PV power system development for four Phase 1 and for one Phase 2; BESS subprojects developed; and additional installation of 3 units of BESSs with a preliminary capacity of 3.0 MW and 12.0 MWh

2. Institutional strengthening and project management support

Status of Implementation Progress (Outputs, Activities, and Issues) (i) On all Phase 1 subprojects (Mauke, Mitiaro, Mangaia, Atiu), commissioning has been done; (ii) on Phase 2 subproject (Aitutaki), the systems have been operating since September 2019 and no issues have been reported; (iii) on Rarotonga Airport West BESS, Completion Certificate was issued in October 2019; (iv) on Rarotonga Airport South BESS Lot 2, it is online and maintains constant state of charge and is configured to provide network frequency and voltage support; and (v) on Rarotonga Power Station BESS Lot 1, development and design is complete. Civil Works on site was completed and clean-up and demobilization from the site has been carried out.
Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The project has been classified as category B for environment following ADB's Safeguard Policy Statement (2009). An environmental assessment and review framework has been prepared for noncore (Phase 2) subprojects, and an initial environmental examination has been prepared for core (Phase 1) subprojects. The main environmental impacts will occur during site preparation, which will include the cutting of about 140 trees and clearing of vegetative cover from the proposed sites and surrounding areas to prevent shading. There will be impacts from noise and dust due to transportation of plants and materials, and operation of construction machinery. These impacts will be short-term (about 1 week for the smaller plants, and up to 1 month for the larger plants). Operational impacts include maintenance of the plant and management of used batteries. It is proposed, as a special condition in the technical specifications, that suppliers handle and dispose used batteries. The solar photovoltaic power system will not have any significant long-term environmental impacts. During implementation, MFEM, REDD, and TAU, with support from the environmental expert under the institutional strengthening and project management support component, will prepare the initial environmental examination for noncore subprojects and update the initial environmental examinations and the environmental management plans based on the detailed designs for core and noncore subprojects. ADB will clear the updated documents. The environmental management plans from the updated assessments will be integrated into the bid and contract documents. During project implementation, the environment expert will enhance the capacity of MFEM, REDD, and TAU in safeguard implementation and monitoring.
Involuntary Resettlement The project has been classified as category B for involuntary resettlement. It is not expected to involve physical displacement. Impacts are not significant, but will arise from the minor acquisition of land with some trees. A resettlement plan has been prepared for the three core subprojects. A resettlement framework has been prepared for the project with guidelines to prepare resettlement plans for noncore subprojects. Affected communities have been consulted during project preparation, and the resettlement framework and plan have been posted on ADB's website. The resettlement plan will be updated after the detailed design, and compensation will be provided to affected persons before civil works start on the respective sites. The Cook Islands Investment Corporation and Crown Law Office have experience in acquiring land and they will support MFEM, REDD, and TAU in updating and implementing the resettlement plan. The project will recruit social safeguard specialist to boost the capacity of government agencies for managing land acquisition and safeguards.
Indigenous Peoples The project has been classified category C for indigenous peoples. The population in the project area comprises the mainstream population of the Cook Islands. The project is not expected to affect any distinct and vulnerable group of indigenous peoples as defined under ADB's Safeguard Policy Statement.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services The executing agency has requested advance contracting. This will include procurement of consulting services.
Procurement The loan will be used for the procurement of equipment and materials, civil works, services, related transportation, insurance, installation costs, and interest and commitment charges on the loan during construction for non-core subprojects on Atiu, Aitutaki, and Rarotonga. The loan will also be used to finance consulting services and contingencies. The grant will be used for the procurement of equipment and materials, civil works, related transportation, insurance, and installation costs for core subprojects on Mauke, Mitiaro, and Mangaia. The government of Cook Islands will finance land acquisition, environmental and social monitoring, taxes and duties not funded by the loan and grant, and contingencies. To support the project's procurement, EU has agreed to follow ADB's Procurement Guidelines (2013, as amended from time to time) for the civil works contracts. However, EU cannot exclude any of its member countries from the contracts it funds. Therefore, an exception to Article 14(ix) of the Agreement Establishing the Asian Development Bank (the Charter 7) is required to allow non-member countries of ADB to tender for the procurement of equipment and materials, civil works, and services. The government of Cook Islands will finance land acquisition, environmental and social monitoring, taxes and duties not funded by ADB loan and the EU grant, and contingencies.
Responsible ADB Officer So, Eun young
Responsible ADB Department Sectors Group
Responsible ADB Division Energy Sector Office (SG-ENE)
Executing Agencies
Ministry of Finance & Economic Management
Timetable
Concept Clearance 04 Sep 2013
Fact Finding 10 Mar 2014 to 21 Mar 2014
MRM 22 Apr 2014
Approval 21 Nov 2014
Last Review Mission -
Last PDS Update 20 Sep 2023

Grant 0415-COO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
21 Nov 2014 13 Jan 2015 09 Feb 2015 31 Dec 2017 31 Dec 2021 14 Jan 2022
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 13.09 Cumulative Contract Awards
ADB 0.00 10 Nov 2023 0.00 5.61 100%
Counterpart 5.83 Cumulative Disbursements
Cofinancing 7.26 10 Nov 2023 0.00 5.61 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

Grant 0493-COO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Aug 2016 14 Sep 2016 18 Oct 2016 31 Dec 2019 31 Dec 2024 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 5.57 Cumulative Contract Awards
ADB 0.00 10 Nov 2023 0.00 3.84 90%
Counterpart 1.31 Cumulative Disbursements
Cofinancing 4.26 10 Nov 2023 0.00 3.83 90%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

Grant 0548-COO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Oct 2017 20 Jun 2018 30 Jul 2018 30 Jun 2020 31 Dec 2024 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 13.80 Cumulative Contract Awards
ADB 0.00 10 Nov 2023 0.00 10.95 91%
Counterpart 1.80 Cumulative Disbursements
Cofinancing 12.00 10 Nov 2023 0.00 9.88 82%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

Loan 3193-COO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
21 Nov 2014 13 Jan 2015 09 Feb 2015 31 Dec 2017 31 Dec 2024 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 11.19 Cumulative Contract Awards
ADB 11.19 10 Nov 2023 8.35 0.00 93%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 10 Nov 2023 8.58 0.00 96%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
Renewable Energy Sector Project: Audited Project Financial Statements (July 2021-June 2022) Audited Project Financial Statements Feb 2023
Amendment to the Grant Agreement (Externally Financed) for Grant 0548-COO: Renewable Energy Sector Project - Additional Financing 2 Grant Agreement Mar 2022
Renewable Energy Sector Project: Audited Project Financial Statements (July 2020-June 2021) Audited Project Financial Statements Dec 2021
Renewable Energy Sector Project: Updated Project Administration Manual Project/Program Administration Manual Jan 2021
Renewable Energy Sector Project: Audited Project Financial Statements (July 2019-June 2020) Audited Project Financial Statements Jan 2021
Renewable Energy Sector Project: Audited Project Financial Statements (July 2018-June 2019) Audited Project Financial Statements Feb 2020
Amendment to the Grant Agreement (Externally Financed) for Grant 0548-COO: Renewable Energy Sector Project - Additional Financing 2 Grant Agreement Oct 2019
Renewable Energy Sector Project: Audited Project Financial Statements (July 2017-June 2018) Audited Project Financial Statements Jul 2019
Renewable Energy Sector Project: Procurement Plan Procurement Plans Apr 2019
Project Agreement for Grant 0548-COO: Renewable Energy Sector Project - Additional Financing 2 Project/Program Agreements Jun 2018
Grant Agreement (Externally Financed) for Grant 0548-COO: Renewable Energy Sector Project - Additional Financing 2 Grant Agreement Jun 2018
Renewable Energy Sector Project: Audited Project Financial Statements (July 2016-June 2017) Audited Project Financial Statements Jan 2018
Renewable Energy Sector Project - Additional Financing: Project Administration Manual Project/Program Administration Manual Oct 2017
Renewable Energy Sector Project (Additional Financing): Gender Action Plan Gender Action Plans Jun 2017
Renewable Energy Sector Project: Audited Project Financial Statements (June 2015-June 2016) Audited Project Financial Statements Jan 2017
Grant Agreement (Global Environment Facility) for Grant 0493-COO: Renewable Energy Sector Project - Additional Financing Grant Agreement Sep 2016
Project Agreement for Grant 0493-COO: Renewable Energy Sector Project - Additional Financing Project/Program Agreements Sep 2016
Project Agreement for Renewable Energy Sector Project Project/Program Agreements Jan 2015
Loan Agreement for Renewable Energy Sector Project Loan Agreement (Ordinary Resources) Jan 2015
Grant Agreement for Renewable Energy Sector Project Grant Agreement Jan 2015
Renewable Energy Sector Project: Project Administration Manual Project/Program Administration Manual Nov 2014
Renewable Energy Sector Project: Report and Recommendation of the President Reports and Recommendations of the President Oct 2014

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Renewable Energy Sector Project: Environmental and Social Monitoring Report (January-June 2023) Environmental and Social Monitoring Reports Oct 2023
Renewable Energy Sector Project: Environmental and Social Monitoring Report (July-December 2022) Environmental and Social Monitoring Reports Mar 2023
Renewable Energy Sector Project: Environmental and Social Monitoring Report (January-June 2022) Environmental and Social Monitoring Reports Dec 2022
Renewable Energy Sector Project: Environmental and Social Monitoring Report (July-December 2021) Environmental and Social Monitoring Reports Mar 2022
Renewable Energy Sector Project: Environmental and Social Monitoring Report (January-June 2021) Environmental and Social Monitoring Reports Oct 2021
Renewable Energy Sector Project: Environmental and Social Monitoring Report (July-December 2020) Environmental and Social Monitoring Reports Feb 2021
Renewable Energy Sector Project: Environmental and Social Monitoring Report (January-June 2020) Environmental and Social Monitoring Reports Aug 2020
Renewable Energy Sector Project: Environmental and Social Monitoring Report (July-December 2019) Environmental and Social Monitoring Reports Feb 2020
Renewable Energy Sector Project: Environmental and Social Monitoring Report (January-June 2019) Environmental and Social Monitoring Reports Sep 2019
Renewable Energy Sector Project: Environmental and Social Monitoring Report (July-December 2018) Environmental and Social Monitoring Reports Dec 2018
Renewable Energy Sector Project: Environmental and Social Monitoring Report (January-June 2018) Environmental and Social Monitoring Reports Jun 2018
Renewable Energy Sector Project: Environmental and Social Monitoring Report (January-June 2018) Environmental and Social Monitoring Reports Jun 2018
Renewable Energy Sector Project: Environmental and Social Monitoring Report (July-December 2017) Environmental and Social Monitoring Reports Jan 2018
Renewable Energy Sector Project: Environmental and Social Monitoring Report (January-June 2017) Environmental and Social Monitoring Reports Jul 2017
Renewable Energy Sector Project (Additional Financing): Initial Environmental Examination Initial Environmental Examination Jun 2017
Renewable Energy Sector Project (Additional Financing): Social Due Diligence Report Safeguards Due Diligence Reports Jun 2017
Renewable Energy Sector Project: Environmental and Social Monitoring Report (July-December 2016) Environmental and Social Monitoring Reports Dec 2016
Renewable Energy Sector Project: Environmental and Social Monitoring Report (January-June 2016) Environmental and Social Monitoring Reports Jul 2016
Renewable Energy Sector Project - Additional Financing: Initial Environmental Examination Initial Environmental Examination May 2016
Renewable Energy Project Resettlement Plans Mar 2014
Renewable Energy Project Resettlement Frameworks Mar 2014
Renewable Energy Project Environmental Assessment and Review Framework Mar 2014
Renewable Energy Project Initial Environmental Examination Mar 2014

Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
L3193/G0415/G0493/G0548-COO: Renewable Energy Sector Project [CIRESP-007-CK181929] Invitation for Bids Closed
L3193/G0415/G0493-COO Cook Islands Renewable Energy Sector Project [Aitutaki - Phase 2] Invitation for Bids Closed

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
RAROTONGA BATTERY ENERGY STORAGE SYSTEM "AIRPORT SOUTH" Grant 0548 26 Sep 2018 VECTOR LTD | 101 CARLTON GORE DRIVE NEWMARKET AUCKLAND 1023 NEW ZEALAND Ministry of Finance & Economic Management 5,057,053.00
AITUTAKI RENEWABLE ENERGY SYSTEM Loan 3193 16 Jul 2018 POWERSMART NZ LIMITED | 18 TUKORAKO DRIVE MT. MAUNGANUI NEW ZEALAND Ministry of Finance & Economic Management 2,211,524.00 269,195.00
Phase 1 Solar Photovoltaic Plants (Civil Works) Loan 3193 27 Jun 2017 Netcon Limited | Level 3, 15 Courtenay Place, Po Box 19227, Wellington, 6149 New Zealand Ministry of Finance & Economic Management 2,558,447.00 2,558,447.00
Replenishment of Imprest Account Loan 3193 18 Apr 2017 Netcon Limited | 31 Meadows Road Timaru 7910 New Zealand Ministry of Finance and Economic Management 2,732,758.38 2,708,018.53

Procurement Plan

Title Document Type Document Date
Renewable Energy Sector Project: Procurement Plan Procurement Plans Apr 2019