ADB offers US$19 million for water, renewable energy

Te Aponga wants $11 million US dollar ADB renewable energy project loan, two years ahead of time

Te Aponga’s eagerness to have a proposed Asia Development Bank (ADB) renewable energy project loan of over US$11 million advanced by two years, raises questions as to Te Aponga’s ability to deliver the goods given a renewable energy engineer is yet to be appointed and the forward planning charted.
Part of the recent visit by the high level ADB Board of Directors group visit was to focus on the Cook Islands operations business plan for 2012 to 2014.
An earlier ADB mission in April discussed with government areas to focus on and the ADB is now proposing a Memorandum of Understanding (MOU) be signed in relation to projects for 2012 to 2014.
An ADB loan of around US $8 million for the Rarotonga Water Supply Project was scheduled to be approved in 2013 and a proposed renewable energy project technical assistance loan of around US$11 million was included and scheduled for approval in 2014.
The ADB has proposed the MOU with government, if agreed, cover the total of US$19 million for both projects.
Of interest is that Te Aponga Uira (TAU) management is keen to bring the renewable energy project forward by two years to 2012/2013. This is on the expectation that a renewable energy engineer will have been recruited to assist in the development of project proposals.
This matter along with other issues will be considered by the National Sustainable Development Council before any MOU is agreed to.
The ADB is expecting that government will approve the 2012 to 2014 operations business plan by 8 July 2011.
Several issues arise concerning TAU’s capacity to deliver what it proposes given the tightening of the time frame by requesting the funds several years early.
There’s also the question of the status of the earlier outer islands assessments carried out by overseas Consultants for the Ministry of Energy.
Consideration needs to be given to how taking on the loan will affect the end price to consumers given it is the consumer who will be expected to repay the loan plus interest.
With solar power generating systems already being installed by households and businesses under the net metering concept, what proportion of the ADB money could be directed to householders and businesses at a low rate of interest to enable them to install a net metering solar power system? -Are other sources of funding or grants available other than through the ADB?
It is interesting to note that the ADB has proposed that an MOU be signed at this time when the relationship has done well since the middle 1970s.

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