Austria offers Vt 107.3 million for rural electrification project on two islands

solar panels

At a signing ceremony on the margins of the recent COP22 UN Climate Change Conference in Marrakesh, Vanuatu’s Ministry of Climate Change and the Austrian Federal Ministry for Agriculture, Forestry and Environment signed an agreement to fund Vt 107.3 million (US$1 million) for renewable rural electrification.

The Nationally Appropriate Mitigation Action (NAMA) on “Rural Electrification in Vanuatu” aims to boost sustainable income generation through access to clean energy for Vanuatu’s rural areas in the aftermath of Cyclone Pam. They aim to balance stimulating local, inclusive economies and helping to rebuild the human, natural, physical, financial, and social assets of the affected populations.

Through the support of the Austrian government, the first investments will focus on extending access to clean energy via micro-grids and grid extensions in rural areas. The agreement will also fund capacity building for Vanuatu’s institutions to establish an adequate framework for the implementation of the NAMA. The project will include the following three components:

  • Investment in 2 grid extensions for two islands
  • Investment in 1 micro-grid for one community
  • Capacity building to provide the framework for NAMA implementation

Rural electrification is a key priority for the Vanuatu Government. Only one-third of Vanuatu’s households have access to electricity, most of which are connected to the Government-regulated grid in the two main urban areas, Port Vila and Luganville. In rural areas, however, where 75% of Vanuatu’s households are located, energy poverty is even more pronounced: there, only one-sixth of households and less than half of schools have access to electricity. With an overall electrification rate of just 17% in rural areas, Vanuatu has about the same level of rural electrification as the most underdeveloped countries in sub-Saharan Africa.

vanuatuAccess to energy—a critical condition for economic wellbeing—has become even more pressing as Vanuatu is still suffering from the devastating effects of Cyclone Pam in 2015, which led to a staggering drop of 50% in GDP.

The project will be implemented by the Ministry of Climate Change (MCC) of the Government of Vanuatu. The MCC will supervise the preparation and implementation of the investment activities, supervise the disbursement of funds and carry out capacity-building activities.

The specific costs for the grid extensions and mini-grids will be investigated in a feasibility study expected to be carried out in early 2017 supported by UNDP.

Article by Nick Howlett