Solomon Islands : Tina River Hydropower Project

Sovereign Project | 50240-001

The project will support the development of renewable energy to supply electricity to Honiara, the capital of Solomon Islands. The project will reduce the cost of power supply generation by replacing diesel power with hydropower, and reduce greenhouse gas emissions. It is estimated that, following the project, hydropower will generate 68% of Honiara's electricity.

The project's impact will be improved economic conditions for Honiara in line with the Solomon Islands National Development Strategy, 2016-2035. The outcome will be the increased generation of renewable energy on the Honiara grid. The project's output will be the Tina River Hydropower Plant constructed. The special project company will develop, design, finance, construct, operate, maintain, and transfer a 15 MW hydropower plant on the Tina River.

Project Details

Related Projects

Project Name
Tina River Hydropower Project
Project Number
50240-001
Country / Economy
  • Solomon Islands
Project Status
Active
Project Type / Modality of Assistance
  • Grant
  • Loan
Source of Funding / Amount
Grant 0665-SOL: Tina River Hydropower Project
Source Amount
Asian Development Fund US$ 12.00 million
Grant: Tina River Hydropower Project
Source Amount
Green Climate Fund US$ 16.00 million
World Bank US$ 9.70 million
Government of Australia US$ 11.70 million
Loan 3828-SOL: Tina River Hydropower Project
Source Amount
Concessional ordinary capital resources lending US$ 18.00 million
Loan: Tina River Hydropower Project
Source Amount
Green Climate Fund US$ 35.00 million
World Bank US$ 21.50 million
Korea Exim Bank US$ 31.60 million
Green Climate Fund US$ 35.00 million
Abu Dhabi Fund US$ 15.00 million
Operational Priorities
  • OP1: Addressing remaining poverty and reducing inequalities
  • OP2: Accelerating progress in gender equality
  • OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
  • OP4: Making cities more livable
  • OP6: Strengthening governance and institutional capacity
Sector / Subsector
  • Energy / Large hydropower generation

Gender
Effective gender mainstreaming
Description

The project will support the development of renewable energy to supply electricity to Honiara, the capital of Solomon Islands. The project will reduce the cost of power supply generation by replacing diesel power with hydropower, and reduce greenhouse gas emissions. It is estimated that, following the project, hydropower will generate 68% of Honiara's electricity.

The project's impact will be improved economic conditions for Honiara in line with the Solomon Islands National Development Strategy, 2016-2035. The outcome will be the increased generation of renewable energy on the Honiara grid. The project's output will be the Tina River Hydropower Plant constructed. The special project company will develop, design, finance, construct, operate, maintain, and transfer a 15 MW hydropower plant on the Tina River.

Project Rationale and Linkage to Country/Regional Strategy

Solomon Islands has the fourth-largest economy among ADB's 15 Pacific developing member countries, with a gross domestic product of just over $1 billion in 2016. However, annual per capita income is less than $1,800. Having withstood the impacts of the global financial and economic crises, the economy grew by an average of 6.6% in 2008-2011, driven by expansions in logging output and mineral extraction. Growth has since dropped to an average of just 2.6%, and is expected to remain low in the near term. The country's longer term prospects depend on the development of more sustainable drivers of growth, including tourism and commercial services. This will need to be underpinned by a stable and reliable energy supply.

High tariffs from over-reliance on diesel power generation. Grid-connected electricity in Solomon Islands is generated and supplied by Solomon Power, a state-owned electricity utility company. Solomon Power provides electricity to the capital Honiara and eight isolated provincial centers on separate islands. Solomon Islands has a total population of 616,000, more than 10% of whom live in Honiara. Honiara has an installed electricity generation capacity of 34 megawatts (MW). Peak load on the Honiara grid is growing, having increased from 9.3 MW in 2003 to 15.8 MW in 2018. Solomon Power's electricity supply relies almost entirely on diesel generation. The cost to Solomon Power of generating power from diesel decreased from $0.36 per kilowatt-hour (kWh) in 2014 to $0.26/kWh in 2018, mainly due to a decline in diesel prices. Similarly, retail tariffs paid by the consumer fell from $0.93/kWh in 2014 to $0.65/kWh in 2016, due in part to declining diesel prices and tariff reform. The high cost of electricity generation is negatively impacting economic growth, particularly in the commercial and tourism sectors.

Low access. Electricity access in Solomon Islands is low. Approximately 9% of the country's population have access to grid-connected electricity, and another 2% rely on self-generated power. The access rate is 64% in urban Honiara, and 3% in rural areas. About one-third of all households have small solar home systems. To improve access rates, Solomon Power is (i) extending the grid within Honiara, with financing support from the World Bank; (ii) converting provincial grids to renewable energy with support from the Asian Development Bank (ADB); and (iii) establishing renewable energy mini-grids in larger villages, partially supported by the World Bank and Government of New Zealand.

Least-cost development and tariff reduction. Solomon Power's least-cost power expansion plan recommends the construction of the Tina River Hydropower Plant supported by the expansion of solar power generation. This will drive tariffs down by replacing diesel generation with least-cost renewable energy. Tariff reductions will boost Honiara's economic development and lower power costs for households. The plan estimates that, with the construction of the plant, retail tariffs paid by consumers will decline to $0.33/kWh by 2023, compared to $0.51/kWh without the project. The plant will also provide suitable baseload power to facilitate the increased penetration of intermittent solar power in the Honiara grid. With the commissioning of the plant and proposed solar investments, the extent of renewable energy integration is expected to grow from 1% in 2016 to 85% in 2022 (68% from the plant and 17% from solar). The reduced use of diesel will significantly reduce Solomon Islands' greenhouse gas emissions.

Impact

Improved economic conditions of Honiara's population

Project Outcome

Description of Outcome

Generation of renewable energy on the Honiara grid increased

Progress Toward Outcome
The contract for the hydropower plant (engineering, procurement and construction) was awarded in December 2019. The construction of the access roads (lot 2 and 3) and temporary facilities (magazine facility, batching plant, crushing plant) is underway and preparations to start construction of the main works are ongoing.

Implementation Progress

Description of Project Outputs

Tina River Hydropower Plant constructed

Status of Implementation Progress (Outputs, Activities, and Issues)
Activities have yet to commence. The contract for the hydropower plant (engineering, procurement and construction) was awarded in December 2019. The construction of the access roads (lot 2 and 3) and temporary facilities (magazine facility, batching plant, crushing plant) is underway and preparations to start construction of the main works are ongoing.
Geographical Location
Nation-wide

Safeguard Categories

Environment
A
Involuntary Resettlement
A
Indigenous Peoples
C

Summary of Environmental and Social Aspects

Environmental Aspects
The project has been classified as category A for the environment following ADB's Safeguard Policy Statement (2009). An environment and social impact assessment has been prepared and disclosed on ADB's website. Aquatic and terrestrial flora and fauna and habitat surveys and impact assessments were conducted, and project-affected communities were consulted extensively. The main potential environmental impacts during construction are increased sedimentation, the inundation of 30.5 hectares (ha) of the reservoir, the removal of 115 ha of modified and natural habitat, and minor impacts on fauna. The main potential impacts during operation are induced impacts on terrestrial flora and fauna from increased human access to the upper catchment, and impacts on aquatic fauna due to reduced water flow in the bypassed river section. The special project company (SPC) will prepare and implement a biodiversity management plan targeting no net loss of biodiversity for identified species, including an offset program to rehabilitate modified habitat. The project design includes an environmental flow of 1 cubic meter per second in the bypassed river section. The SPC will update the environmental and social impact assessment, environmental and social management plan, and other management plans as required in the environmental and social impact assessment. The Tina River Hydropower Project Office (TRHPO) will monitor and supervise compliance with the approved environmental and social management plan during construction. A climate change risk evaluation was conducted and the findings considered in the project design.
Involuntary Resettlement
The project is classified as category A for resettlement following ADB's Safeguard Policy Statement. The government has acquired 428.8 ha of customary land for key project infrastructure using compulsory acquisition. The project will have an economic impact on tribal landowner groups and users mainly due to a lack of access to commercial timber and non-timber resources, although there will be no physical displacement. ADB confirmed that the land acquisition processes for the core land meet the safeguard policy requirements of the government and ADB. Although the appeals period has ended, compensation has been formally agreed upon, funds have been disbursed to a trust account, and the land title has been transferred to the lands commissioner, two of the five landowner groups have not yet accepted compensation. The benefits package includes royalties and the establishment of a benefit-sharing mechanism. Approximately 32.6 ha of private land has yet to be acquired for a power transmission corridor. A land acquisition and livelihoods restoration plan will provide compensation and benefits to affected persons, and the plan has been disclosed on ADB's website. Although the Policy on Indigenous Peoples has not been triggered, all necessary measures to minimize adverse impacts on tribal communities are consistent with ADB requirements and in place. The SPC will implement a community development plan, overseen by TRHPO and supported by safeguard specialists.
Indigenous Peoples
The project is classified as category C for indigenous peoples following ADB's Safeguard Policy Statement.

Stakeholder Communication, Participation, and Consultation

During Project Design
The TRHPO has prepared the Stakeholder Engagement Policy (SEP) dated April 2017, which outlines the proposed communication strategy with stakeholders. A Consultation and Participation Plan (CPP) will be prepared based on the strategy and will detail consultation activities to be undertaken at different stages of the project cycle. The CPP will include proposals to strengthen civil society participation. The CPP will include: a stakeholder analysis, a communication strategy (for disclosure, information sharing and community feedback), and an outline of resources to be allocated. Key stakeholders such as affected people, community members, women, and low-income householders, as well as provincial government officials, politicians, government staff, traditional leaders and any civil society organizations will be consulted throughout the project cycle.
During Project Implementation

Business Opportunities

Procurement
Engineering, procurement, and construction (EPC) and operation and maintenance contracts. The Special Project Company (SPC) will engage an EPC contractor to construct the Tina River Hydropower Plant and access road under an EPC contract. The Tina River Hydropower Project Office will engage an owners engineer to supervise the EPC contract, and the SPC will engage a contractor to operate and maintain the plant and access road. Solomon Power will be responsible for procuring contractors to construct the transmission line.

Contact

Responsible ADB Officer
Abbasov, Rafayil
Responsible ADB Department
Sectors Group
Responsible ADB Division
Energy Sector Office (SG-ENE)
Executing Agencies
Ministry of Finance and Treasury

Timetable

Concept Clearance
24 Mar 2017
Fact Finding
29 May 2017 to 02 Jun 2017
MRM
07 Jul 2017
Approval
26 Sep 2019
Last Review Mission
-
Last PDS Update
28 Sep 2022

Funding

Grant 0665-SOL

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Sep 2019 27 Sep 2019 16 Dec 2019 31 Dec 2025 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 12.00
ADB 12.00
Counterpart 0.00
Cofinancing 0.00
Grant Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 12.00 0.00 100%
Cumulative Disbursements 06 Jun 2024 0.00 0.00 0%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory Satisfactory - Satisfactory

Loan 3828-SOL

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Sep 2019 27 Sep 2019 16 Dec 2019 31 Dec 2025 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 18.00
ADB 18.00
Counterpart 0.00
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 17.25 0.00 96%
Cumulative Disbursements 06 Jun 2024 0.00 0.00 0%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - 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
Tina River Hydropower Project: Audited Project Financial Statements (January-December 2023) Audited Project Financial Statements Jul 2024
Tina River Hydropower Project: Audited Project Financial Statements (January-December 2022) Audited Project Financial Statements Jul 2023
Tina River Hydropower Project: Audited Project Financial Statements (January-December 2021) Audited Project Financial Statements May 2022
Tina River Hydropower Project: Audited Project Financial Statements (January-December 2020) Audited Project Financial Statements Sep 2021
Tina River Hydropower Project: Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Sep 2020
Tina River Hydropower Project: Project Administration Manual Project/Program Administration Manual Apr 2020
Amendment to the Loan Agreement for for Loan 3828-SOL: Tina River Hydropower Project Loan Agreement (Ordinary Resources) Apr 2020
Project Agreement for Loan 3828-SOL and Grant 0665-SOL: Tina River Hydropower Project Project/Program Agreements Sep 2019
Loan Agreement (Ordinary Operations [Concessional]) for Loan 3828-SOL: Tina River Hydropower Project Loan Agreement (Ordinary Resources) Sep 2019
Grant Agreement (Special Operations) for Grant 0665-SOL: Tina River Hydropower Project Grant Agreement Sep 2019
Tina River Hydropower Project: Project Administration Manual Project/Program Administration Manual Sep 2019
Tina River Hydropower Project: Gender Action Plan Gender Action Plans Sep 2019
Tina River Hydropower Project: Report and Recommendation of the President Reports and Recommendations of the President Sep 2019

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
Tina River Hydropower Project: Environmental and Social Monitoring Report (January-June 2023) Environmental and Social Monitoring Reports Apr 2024
Tina River Hydropower Project: Preparation Phase Environmental and Social Management Plan Environmental Management Plans Aug 2023
Tina River Hydropower Project: Construction Phase Environmental and Social Management Plan Environmental Management Plans Aug 2023
Tina River Hydropower Project: Monitoring Phase Environmental and Social Management Plan Environmental Management Plans Aug 2023
Tina River Hydropower Project: Environmental and Social Monitoring Report (July-December 2022) Environmental and Social Monitoring Reports Aug 2023
Tina River Hydropower Project: Environmental and Social Monitoring Report (January-June 2022) Environmental and Social Monitoring Reports Aug 2023
Tina River Hydropower Project: Environmental and Social Monitoring Report (July-December 2021) Environmental and Social Monitoring Reports Mar 2023
Tina River Hydropower Project: Environmental and Social Monitoring Report (January-June 2021) Environmental and Social Monitoring Reports Mar 2023
Tina River Hydropower Project: Safeguards Due Diligence Report Safeguards Due Diligence Reports Mar 2023
Tina River Hydropower Project: Environmental and Social Monitoring Report (July-December 2020) Environmental and Social Monitoring Reports May 2022
Tina River Hydropower Project: Corrective Action Plan Environment Compliance Audit Reports Dec 2021
Tina River Hydropower Project: Land Acquisition and Livelihoods Restoration Completion Report Resettlement Plans Dec 2021
Tina River Hydropower Project: 66 kV Transmission Line Subproject Environmental Management Plan Environmental Management Plans Jul 2021
Tina River Hydropower Project: Environmental and Social Monitoring Report (January-June 2020) Environmental and Social Monitoring Reports Jul 2020
Tina River Hydropower Project: Tina River 66kV Transmission Line Subproject Resettlement Plan Resettlement Plans Dec 2019
Tina River Hydropower Project: Land Acquisition and Livelihood Restoration Plan Resettlement Plans Jun 2017
Tina River Hydropower Project: Community Development Plan Resettlement Plans Jun 2017
Tina River Hydropower Project: Environmental and Social Impact Assessment Environment and Social Impact Assessments Jun 2017

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

No tenders for this project were found.

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
ENGINEERING PROCUREMENT AND CONSTRUCTION CONTRACT Loan 3828 20 Dec 2019 HYUNDAI ENGINEERING CO., LTD | JONGNO-GU, SEOUL KOREA, REPUBLIC OF Ministry of Finance and Treasury 30,000,000.00 18,000,000.00

Procurement Plan

None currently available.