AUSTRALIA has made a second AUD8 million-tranche payment to the Tina River Hydro Project. This follows successful negotiations in Sydney in late April 2018 between the Solomon Islands Government, Solomon Power and private sector developers, the Korea Water Resources Corporation and Hyundai Engineering Co. Ltd.
New electricity tariff and key project agreements were substantially agreed at these meetings.
Australia’s contribution will support construction of the access road to the project site in East Guadalcanal and technical assistance for the Solomon Islands Government to manage the project’s implementation.
Project construction is expected to commence in the fourth quarter of 2018.
Australia’s support for Tina River Hydro Project is a flagship activity under its AUD 50 million Solomon Islands Growth Program that was launched by Foreign Minister Julie Bishop in Honiara in December 2016.
This payment brings the total disbursement for the implementation phase to AUD 16 million, and total support for the project to AUD 24.7 million to date.
The Tina River Hydro Project has the potential to transform the Solomon Islands business environment by reducing electricity prices, which are currently among the most expensive in the world, and, as the first public-private partnership scheme, its success will demonstrate that Solomon Islands is a viable destination for international investment.
It is Solomon Islands’ first major renewable energy project, and Australia’s largest climate finance investment in the Pacific.
The project will help transition Solomon Islands away from diesel-powered energy, strengthen energy security, reduce its exposure to the volatile global fuel prices, and significantly reduce greenhouse gas emissions, meeting Solomon Islands international commitments for emissions reductions under the Paris Agreement.
In June 2017, the Australian Minister for International Development and the Pacific, Senator the Hon Concetta Fierravanti-Wells announced Australia’s commitment of up to AUD 17 million for the implementation phase of the Tina River Hydro Project.
Australia’s support is delivered in partnership with the World Bank. Since 2009, Australia has invested AUD 9.7 million to support the preparation phase of the Tina River Hydropower Project.