Green Climate Fund Tina River Hydro Project

Significantly reduced electricity costs are one step closer with the approval of US$86 million by the board of the Green Climate Fund for the Tina River Hydropower Project.

The funding approval was made in a meeting of the Fund’s board at its headquarters in Songdo, South Korea this week.

Of the GCF funding, US$70 million is a low-interest loan towards the cost of building the hydro power facility, while US$16 million is grant contribution for the construction of the key access road that will link the power house and the hydropower facility to the capital city Honiara.

The Green Climate Fund is one of the key bodies set up under the United Nations Framework Convention on Climate Change to help countries adapt to, or meet their national targets to reduce their greenhouse gas emissions. Their support is linked to the Tina River Hydro project’s aims of providing lower cost, clean renewable water-generated energy to Solomon Islanders to help reduce – and eventually replace – the country’s almost sole reliance on expensive imported diesel oil.

Tina River Hydro is planned as Solomon Islands’ first large-scale sustainable energy project, and will lead national efforts to diversify electricity generation in favor of clean, renewable sources such as hydro and solar power. The project has the potential to more than double the country’s annual greenhouse gas reduction target, and has the largest greenhouse gas reduction potential of any planned energy project in Solomon Islands.

At USD0.81 per kWh Solomon Islands’ retail electricity cost is one of the highest in the world. The country has for decades relied on extremely expensive imported diesel fuel for Power generation. Diesel Power generation is also subject to international oil prices and can be unpredictable for a small country like Solomon Islands. The extremely high costs of electricity, combined with unpredictable international oil prices is one of the country’s key development challenges and this can be mitigated by utilizing indigenous resources such as the Tina Hydro.

The Green Climate Fund is now the second donor to announce its funding approval for Tina River Hydro, following a US$15 million commitment from the International Renewable Energy Agency (IRENA) in early January this year.

Other institutions and governments that have indicated funding support for Tina River Hydro include the Government of Australia, the Asian Development Bank, the World Bank Group, and the Economic Development Cooperation Fund (EDCF) of the Government of Korea.

All funding support for the project is expected to be finalized by August 2017.

Speaking from Songdo, Korea where he is part of a Solomon Islands delegation to present the Tina River Hydro funding proposal to the Green Climate Fund, Minister for Mines Energy and Rural Electrification, Honorable David Day Pacha said, the Government is grateful for the funding support from the Green Climate Fund.

“Tina River Hydro offers significant economic and social benefits to the country and Tina River Project communities. Solomon Islanders have been denied cheaper electricity for many years, and donors including the Green Climate Fund make us believe it is possible to produce clean and cheaper electricity in Solomon Islands,” said Minister Pacha.

The Solomon Islands delegation included representatives of all national project stakeholders including the Government, Project Community and landowners, and the Civil Society sector. It was led by the Deputy Prime Minister, Hon Manasseh Maelanga. The composition of the delegation also indicates the strong country ownership of the project and an indication of the multi-stakeholder support that the Tina Project is enjoying.