| Project Detail |
Project Name Disaster Resilient Clean Energy Financing - Additional Financing
Project Number 54011-002
Country / Economy Palau
Project Status Approved
The additional financing for the DRCEF Facility is to further accelerate clean energy investments by NDBP through establishing a new product under DRCEF. The new product will be a revolving facility on-lent by the NDBP with a subsidized interest rate on terms and conditions set forth in grant and project agreements between ADB and MOF/NDBP. The pricing and tenor of the proposed on-lending by the NDBP will include its administration charge and risk premium based on appraisal of loan applications to be further designed and reviewed at due diligence stage. The scope of the new product will be further determined at due diligence stage but will support an additional DRCEF Output 4: a new product for incentivizing adoption of advanced low-carbon technologies in clean energy projects made available and operationalized. The eligible projects may include: (i) rooftop solar PV, battery energy storage system, and energy management system for residential housing and/or commercial buildings; (ii) floating solar PV, battery energy storage system, and energy management system; and (iii) electric transportation (electric ferries, electric buses).
Project Rationale and Linkage to Country/Regional Strategy In 2015, the government adopted the Palau Climate Change Policy for Climate and Disaster Resilient Low Emissions Development, including the objective to mitigate global climate change by working toward low-carbon emission development, maximizing energy efficiency, protecting carbon sinks, and minimizing greenhouse gas emissions. The nationally determined contribution of Palau in 2015 aims to reduce energy sector greenhouse gas emissions by 22% compared to the 2005 level by 2025. A key government development priority set in the Energy Policy (2010) and the Energy Act (2016) is to diversify the energy generation mix by including more indigenous, renewable energy resources. Introduced in 2012, net metering was intended to benefit consumers for off-grid and on-grid rooftop PV solar generation. However, despite the strategies and policies in place, high cost of capital remains a key constraint for households and industries to install renewable energy systems. The current electrification rate of the country is almost 100%, but installed renewable energy, mostly solar (2.7 megawatt), is estimated to account for less than 7% of total electricity consumption.
Impact
Access to disaster resilient renewable energy for consumers increased
Safe, resilient and prepared communities for calamities and women livelihood recovery enhanced
Resilience of Palau communities to climate change and disasters enhanced |
