Solomon Power and the Australian Infrastructure Financing Facility for the Pacific (AIFFP) have signed a USD22.7 million (SBD180 million) grant and loan financing agreement to build the 22km transmission system for the Tina River Hydro-power Project.
The transmission system is the critical piece of infrastructure needed to enable the hydropower facility to supply power to Honiara. It will deliver 70–80 gigawatt hours of renewable energy per annum – enough electricity to meet around 68 per cent of Honiara’s needs. The resulting reduction in Honiara’s reliance on diesel generation will see Solomon Islands meet all of its greenhouse gas emissions targets under the Paris Agreement.
Prime Minister Hon. Manasseh Sogavare attended the ceremony at the Heritage Park Hotel and said, “the fact that we witness the signing today, despite the delays brought about by the COVID-19 pandemic is testament to the genuineness, durability and maturity of our relations which ensures we achieve win-win outcomes in our bilateral relations as we continue to strengthen it.”
Prime Minister Sogavare adds, “more affordable and reliable electricity for Solomon Islands will alleviate pressure on household incomes and provide opportunities for businesses.”
The Tina River Hydro-power Project is Australia’s largest ever climate finance investment in the Pacific. The AIFFP financing package brings Australia’s investment in the Project to more than SBD360 million since 2009. The package consists of a concessional loan of SBD84.8 million and a grant of up to SBD96.8 million.
“The agreement brings with it a partnership between Solomon Power and the AIFFP that will see reliable, sustainable renewable energy delivered to the people of Honiara for many years to come”, said Australian High Commissioner to Solomon Islands, Dr. Lachlan Strahan.
In his speech Solomon Power’s Chairman of the Board of Directors Mr David K.C.Quan, said, “I wish to thank the Solomon Islands Government for working together with the Australian Government in maintaining the long-standing partnership to successfully implement the country’s largest renewable energy project. We are honoured by the trust and confidence AIFFP has in SIEA and we will strive to ensure the transmission system is completed on schedule and on budget.”
The AIFFP financing agreement is a milestone for Solomon Power. The transmission system is expected to cost SBD219.1 million and Solomon Power will invest SBD37.6 million of its own funds. Solomon Power will employ more than 200 people to make sure the transmission system is constructed before the hydro-power facility is completed in 2024.