The UAE is using renewable energy projects to help countries in the Pacific Islands save more than US$2.4 billion annually in imported diesel costs.
Masdar, Abu Dhabi's renewable energy company, entered into an agreement with New Zealand to help develop a 1 megawatt solar photovoltaic (PV) power plant in the Solomon Islands, the seventh and final project awarded under the UAE Pacific Partnership Fund. The UAE will finance 60 per cent of the project, carried out through Masdar, while New Zealand's government will pay for the rest.
The fund, established two years ago, has disbursed $50 million for Masdar to develop solar and wind energy projects across 11 countries in the Pacific Islands.
Ahmad Belhoul, Masdar’s chief executive, said the Pacific Islands were facing some of the highest fuel costs in the world. “Clean energy delivers tremendous benefits in terms of savings and development opportunities,” he said.
Much like its other Pacific Islands neighbours, the Solomon Islands rely almost exclusively on diesel to generate power.
The high import costs are transferred to consumers via high electricity bills.
“We are conscious of the high cost of electricity in Solomon Islands due to our heavy reliance on diesel, and are actively working with all our stakeholders to pursue initiatives to bring down the price of electricity,” said Adrian Wickham, the chairman of the Solomon Islands Electricity Authority.
Once the 1MW solar PV project is completed, its solar energy is expected to meet 7 per cent of the Solomon Islands' energy needs, saving the country about $500,000 annually on diesel imports. Last week, two 500-kilowatt solar plants in Tuvalu and Kiribati were completed, supplying 1,600 homes with power.
Other projects in Fiji, Samoa, Tonga and Vanuatu are also receiving funding. The cost savings in diesel imports range from $200,000 a year for Tuvalu to just less than $500,000 in Samoa.
The UAE’s permanent representative to the Abu Dhabi-based International Renewable Energy Agency said the latest project was pivotal for the Solomon Islands.
“This project will deliver significant economic, social and environmental benefits to the people,” he said.
Follow The National's Business section on Twitter