ADB $5 Million Additional Financing to Upgrade Power Grid in Tonga

The Asian Development Bank (ADB) has approved a second additional financing amounting $5 million for a renewable energy project to upgrade the existing power distribution grid in the Tonga’s outer islands of Vava’u and ‘Eua.

“The grid rehabilitation will promote greater efficiency and reduce electricity distribution losses,” said Woo Yul Lee, Energy Specialist at ADB’s Pacific Regional Department. “The improvements will make Tonga’s power distribution network more resilient to climate change and rehabilitate electricity network in remote parts of the country.”

Tonga is heavily reliant on fossil fuels like diesel for its 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 $5.76 million in October 2015 to scale up the project and expand the project management support services.

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 $2.5 million will be provided as grant.

Tonga Power Limited, a government-owned public enterprise and the implementing agency of the grid rehabilitation, is contributing a further $600,000 to the grid expansion project which is expected to completed by end of 2019.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.

Image: The additional financing will upgrade the existing power distribution grid in Vava’u and ‘Eua. (Source: Asian Development Bank)