The Asian Development Bank (ADB) has approved a second additional fund of USD$5 million for a renewable energy project to upgrade the existing power distribution grid in Tonga’s outer islands of Vava’u and ‘Eua.
Energy Specialist at ADB’s Pacific Regional Department – Woo Yul Lee, told the Financial News Agency that the grid rehabilitation will promote greater efficiency and reduce electricity distribution losses.
The improvements will make Tonga’s power distribution network more resilient to climate change and rehabilitate electricity network in remote parts of the country.
The kingdom is heavily reliant on fossil fuels like diesel for our energy, consuming an estimated 13 million liters every year to generate electricity for over 103,000 of the country’s residents.
The Outer Island Renewable Energy Project, approved in 2013, was implemented to reduce the country’s dependence on fossil fuel while giving consumers greater access to electricity from solar power at a reduced cost.
ADB provided the first additional financing worth USD5.76 million in October 2015 to scale up the project and expand the project management support services, according to ADB.
Half of the second additional financing from the Asian Development Fund, ADB’s concessional financing window, will be in the form of a loan while the remaining TOP2.5 million will be provided as grant.