4/30/2019 ADB Approves New Financing Support for Renewable Power Projects in the Pacific

23 April 2019

ADB Approves New Financing Support for

Renewable Power Projects in the Pacific
MANILA, PHILIPPINES (23 April 2019) — The Asian Development Bank (ADB) has approved an umbrella facility of up to $100 million
which will provide financing support including loans, guarantees, and letters of credit to overcome constraints to private sector investment in
renewable power projects in Pacific island countries.

The Pacific Renewable Energy Program will support an estimated 5 separate renewable energy projects in ADB’s Pacific developing
member countries over a 5-year period. ADB’s Pacific Department (PARD) and Private Sector Operations Department (PSOD) will work
together to implement the program.

“The program will help to build urgently needed capacity for energy sector expansion and private sector interest in clean energy projects in
the region,” said PARD Director General Ms. Carmela Locsin. “The objective is to implement more renewable energy projects in the Pacific
by working with power utilities to identify transactions at an early stage.”

Funding for power utilities in the Pacific is inadequate. Private sector investment in particular is crucial to expand renewable power
generation as the region transitions from fossil fuels to clean energy. However, investment is restricted by a lack of governmental credit
support for the payment obligations of power utilities. Development is also hampered due to a lack of bankable power purchase
agreements, uncertainties over foreign currency availability and convertibility, and perceived political risks.

“This program is designed to work within these constraints and encourage private sector investment through an innovative blend of ADB’s
direct private sector lending, ADB’s guarantees of commercial bank lenders, together with donor funds which provide a backstop to the
payment obligations of the power utilities,” said PSOD Director General Mr. Michael Barrow. “It will help remove barriers to investment by
enhancing the creditworthiness of power utilities and mitigating perceived political risk for lenders.”

The program aims to spur self-sustaining private sector development and, over time, reduce reliance by power utilities on grants and
subsidies. A first project proposed for approval under the program has been identified and a financing plan is under discussion. To meet
international donor requirements, participating projects will be required to adopt environmental and social standards and to demonstrate
good gender parity in their energy projects and/or related community projects.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to
eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is
owned by 68 members—49 from the region.

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John Gerard Larkin

Telephone: +63 2 632 6618
Mobile: +63 999 999 6618
E-mail: jlarkin@adb.org

https://www.adb.org/print/node/498371 1/2
4/30/2019 ADB Approves New Financing Support for Renewable Power Projects in the Pacific

© 2019 Asian Development Bank

https://www.adb.org/print/node/498371 2/2