Fiu Hydro Loan Agreement Signed

Fiu Hydro Loan Agreement Signed

The Government and the Solomon Islands Electricity Authority (SIEA) has finally signed a Subsidiary Loan Agreement (SLA) to fund the Fiu River Hydro Power project Thursday last week in Honiara.

The signing ceremony was made in the presence of senior officials from the Ministry of Finance and Treasury, SIEA and ADB.The Asian Development Bank (ADB) as part of the Solomon Islands Provincial Renewable Energy Project agreed to provide the Solomon Island Government with a funding of US$12 million financing package, comprising $US6 million in loan and $US6 million in grant for the proposed US$15 million Fiu River Hydro Power project in Malaita Province. The remaining US$3 will be equally contributed by the Government and SIEA

Of the US$12 million from the ADB, the Government, under a subsidiary loan agreement, will on-lend US$10.5 million to SIEA and US$1.5 million in subsidiary grant. The agreement enables SIG to on-lend funds from the Asian Development Bank (ADB) to SIEA and finalize all documentation to access the loan for the hydro power project.

SIEA Chairman Adrian Wickham acknowledged Finance Minister Snyder Rini and the Government for the important and historical project that SIEA will now undertake, as it will be the first big hydro project in Malaita Province. Mr Wickham also thanked ADB for supporting the project and highlighted that SIEA is working closely with landowners to ensure that the required land acquisition is on track so that the work can start as soon as possible.

The subsidiary loan agreement includes a condition that no funds will be disbursed until SIG and SIEA are satisfied that all land issues are resolved satisfactorily and all rights-of-way are acquired in accordance with ADB’s land acquisition and involuntary resettlement requirements.

Minister Rini highlighted that the Fiu River Hydro Power project is a very important project for the DCC Government. He said the Prime Minister recently met with the Malaita Provincial Government senior officials and landowners to address some of the important issues relating to development in Malaita Province.

The Fiu River Hydro is envisaged to provide lasting economic and social benefits in and around Auki Town as well as the possibility to reach key Growth Centers such as Bina-harbor.

It is expected that SIEA will be able to produce more electricity through the hydro power project than what is currently produced with diesel generation. This means more households and businesses will be able to access electricity.

Both the Government and SIEA have encouraged landowners in the Project area to advance land agreements so that their own communities can realize the benefits of improved electricity supply.

ENDS

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