Regional : Pacific Renewable Energy Investment Facility (formerly Pacific Renewable Energy Investment Program)

Energy / Energy sector development and institutional reform

Pacific Small Island Developing States (SIDS) are heavily dependent on diesel for power generation, which has resulted in high electricity tariffs. The average supply cost for electricity across the Pacific is $0.47/kilo-watt hour (kWh), which is high by international standards. However, this increases significantly for the smaller, more isolated SIDS where the high cost of electricity is negatively impacting economic growth. Over reliance on imported fuel also depletes limited foreign reserves and exposes the SIDS economies to diesel price spikes. The investment program will target seven of the smaller Pacific SIDS with a combined population of around 500,000. All targeted SIDS have populations less than 200,000, with four less than 55,000.

Pacific SIDS have recognized the need to structurally shift power generation from diesel to renewable energy and all have aggressive national renewable energy targets, in some cases of up to 100%. While the seven target SIDS are endowed with cost-competitive renewable energy resources, lack of access to adequate funding has limited the uptake of renewable energy, and most SIDS have been unable to secure sufficient funding to significantly increase the renewable energy share of generation. In order to fill the financing gap, Pacific SIDS are encouraging private sector in the form of independent power providers (IPPs) to invest in the sector, however there are significant barriers to entry of the private sector. Additionally, SIDS face significant capacity barriers to plan, design, implement and manage renewable energy investments. Ongoing sector reform is required to encourage the structural shift to renewable energy. In general, Pacific SIDS are not currently on track to meet their aggressive renewable energy targets. If all proposed renewable energy projects with secure financing in the target SIDS are constructed, two SIDS would have over 40% renewable energy, however 4 of 8 would still only have less than 5% renewable energy.

The TA is financing contracts with consulting firms and individual consultants for project processing and pre-implementation works on projects for 11 smaller Pacific island countries (PIC-11).

The TA has also supported the capacity development of the officials from the executing agencies (EAs) and implementing agencies (IAs) for project preparation/implementation through regional forums/workshops, such as Pacific Power Annual Meeting, Asia Clean Energy Forum, and Pacific Energy Operations, among others.

As of 26 September 2022, 2018, twelve resource persons, nine individual consultants, and six consulting firms have been engaged to do the preparatory work for the ensuing projects as applicable.