Driving energy sector development in the Blue Pacific

7 November 2022

By Paul Makumbe, Camco Pacific Director

Pacific Island countries face a unique set of challenges stemming from the dispersed nature of the islands and their low populations and which affects everything from energy access and income generation to education and healthcare. Being low-lying countries, they are also on the frontline of climate change, facing both an increased prevalence of extreme weather and rising sea levels that is threatening the livelihoods of entire communities.

 

But despite these issues, there has not been the same level of urgency from both the international donor community and private sector participants to help islands meet their energy access and climate action targets that has been applied in Africa or Asia. The solutions and focus paid to the Pacific Islands today remains mostly notional, with the participation of international multilaterals remains largely absent save for interventions of the Ministry of Foreign Affairs and Trade (MFAT), Department of Foreign Affairs and Trade (DFAT) and the Asian Development Bank (ADB).

 

As a result, electrification rates are lagging behind global averages in many Pacific Island countries and all of them still have a heavy dependence on imported diesel for their energy needs, with both significant economic and environmental consequences.

 

Somewhat ironically, the enormous threat posed by climate change on Pacific Islands could, under the right circumstances, provide a transformative opportunity for them to increase their broader economic resilience through building infrastructural and community resilience to climate change. However, as every Pacific Island leader is aware, to tackle the challenges and seize the opportunities requires a huge upsurge in international investment and support that has so far been lacking. To put it simply, wealthier countries must start putting their money where their mouth is.

 

With COP27 under way in Egypt, now is the time for wealthier countries – who, let us not forget, are largely responsible for anthropogenic climate change – to act meaningfully and decisively in supporting countries like Tonga in achieving their ambitious Nationally Determined Contributions and renewable energy plans. 

 

There are high hopes that COP27 will prove to be the COP that quickly paves the way for the necessary international investment needed for Pacific Islands to implement their climate mitigation and adaptation priorities. But what is the best form of investment to enable rapid and scalable impact?

 

Meaningful and decisive support should not simply be in the form of one-off grants that might provide quick wins but do little to build the capacity needed to put Pacific Islands’ development on a sustainable trajectory. What is needed instead is a commercially driven approach that sees money deployed in a way that builds local industry and attracts private capital for renewable energy projects, leading to a more sustained stream of finance. Or put another way, leads to the multiplier effect.

 

There are valuable lessons to be learned from replicable interventions in Africa, where a once nascent small-scale and decentralised renewable energy sector is starting to realise its promise and deliver first time clean electricity access to millions of people. As a case in point, the Camco-managed and UK government-funded Renewable Energy Performance Platform is helping to accelerate Africa’s transition to a sustainable development pathway by innovating within recognisable finance structures and taking the calculated risks that many investors fear to take. Since 2016, REPP has supported 38 projects in 18 countries that have connected more than one million people to electricity for the first time, installed more than 30MW of renewable energy capacity and avoided over 80,000 tonnes of greenhouse gas emissions. It has also committed GBP43.4 million and, even more importantly, mobilised more than GBP300 million from third parties.

 

To realise its clean energy potential and build climate resilience across the Blue Pacific, the region needs a blended finance solution that provides quick, practical and flexible financing to local renewable energy developers with the goal of catalysing investment in zero-emissions projects. That’s why we created TIDES ((Transforming Island Development through Electrification and Sustainability​), which has been designed to catalyse private sector investment into renewable energy projects in Tonga and the region.

 

At COP27 on Wednesday, we are honoured to welcome Hon. Hu’akavameiliku, Prime Minister of Tonga, as one of the esteemed speakers on an event we are co-hosting with the Government of Tonga and IRENA to look at the role of TIDES and blended finance more generally in driving energy sector development in the Blue Pacific. If you are at the conference, please do join us for what I am sure will be an electrifying discussion.

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