At project appraisal in 2013, only around 3% of the people in the Malaita province, which had about 25% of the Solomon Islands’ national population, had access to grid electricity. Power in the provincial capital of Auki was 100% diesel-generated and so was expensive and beyond the reach of most of the local population. The high electricity cost and limited coverage of the distribution grid were slowing economic growth in the province, particularly impacting agriculture and tourism.
The Provincial Renewable Energy Project, approved by the Asian Development Bank (ADB) in May 2014 for a loan and grant of $6 million each, was to assist the state-owned Solomon Islands Electricity Authority (SIEA) in constructing a hydropower plant on the Fui River, adjacent to Auki, and extend the distribution grid to peri-urban households in the provincial capital. It aimed to spur greater economic activity in Auki, as impact; and increase the supply of more reliable and cleaner power to the project area, as outcome. It had four planned outputs: (i) Fiu River hydropower plant constructed and operated, (ii) distribution grid extended, (iii) capacity building undertaken for the implementing agency and project beneficiaries, and (iv) efficient project management services.
Following loan effectiveness in June 2015, a year after the loan agreement was signed, the project management unit was established within SIEA and initial site preparation works were undertaken, including topographical and cadastral surveys, geotechnical analysis and preliminary technical design. Significant preparatory land acquisition works were also conducted by the Malaita provincial government to de-risk the pre-identified priority investment site.
Land acquisition was relatively on-schedule in relation to the timetable agreed at project appraisal schedule, until an out of appeals period objection was received. Lack of court action over a claimant’s claim to being part-owner of the 11-hectare originally planned hydropower plant site, which was a customary-owned land, prompted the consideration of alternative sites. Ownership issues on a 3-hectare private land subsequently considered resulted in further land acquisition delays. Because of the land acquisition problems, which dragged for over three years, the Solomon Islands’ Ministry of Finance and Treasury (MoFT), acting on behalf of the government, requested ADB to cancel the project financing in August 2018.
At appraisal, the Ministry of Mines, Energy and Rural Electrification was designated as the project executing agency and the SIEA the implementing agency.