THE Vanuatu Parliament has approved the National Green Energy Fund (NGEF) Bill in its extraordinary sitting on June 8.
The Bill was supported unanimously by both the Government and Opposition members.
As the first national financing vehicle for Vanuatu energy sector, this legislation will contribute towards accelerating the objectives and targets of the updated National Energy Road Map (NERM) by 2030.
It was tabled by Ham Lini, the Minister responsible for Climate Change, Natural Disaster Management, Meteorology, Geo-Hazard, Environment and Energy.
In his presentation, the minister reinforces the Vanuatu Government’s commitment to achieve 100 per cent electricity access throughout Vanuatu, 100 per cent use of renewable energy sources; 14 per cent reduction of energy use using energy efficient products with 65 per cent of tourism bungalows to use renewable energy sources of electricity by 2030.The Fund will therefore play a vital role in helping the Government in achieving these policy targets.
The Fund will operate as a revolving fund, attracting both domestic and external funds, which will then on lend to customers through approved intermediaries. NGEF will consolidate existing energy funds as part of its domestic source and Government’s financial contribution, which will be used as a leverage to attract larger portion of funding expected to come in from Vanuatu’s development partners. The revenues derived from its financial activities are expected to bring in additional funds into the Fund.
The Director General of the Ministry of Climate Change emphasised the need to have a robust financial system and a transparent governance framework in place to cater for NGEF’s long term financial sustainability.
Past Council of Ministers (CoM) decisions in April 2016 (No. 45) and May 2017 (No. 91) approved the establishment of the NGEF concept and its institutionalization as a Unit within the Department of Energy (DoE) under the MoCC respectively.
The NGEF concept development and its institutional setup was accomplished through technical and financial support from the Global Green Growth Institute (GGGI), an intergovernmental organization in green growth and climate change.
The initial focus of the NGEF will be on electricity access, mainly in off grid areas, use of renewable energy and energy efficient products.
The NGEF’s draft Business Plan and Operations Manual have been completed and awaiting approval by the NGEF Board, pending the publication of the bill in the official gazette. Similarly, the completion of a market demand study undertaken earlier this year through the Green Climate Fund (GCF) Readiness Program and the information collected was presented during a two-day workshop held in May 2018.
The workshops also outlined 50 potential pipeline energy projects for Vanuatu until 2030. They are categorized into four segments: Rural Electrification, Energy Efficiency, On-grid Renewables and other Green Projects.
The next steps for the NGEF is the operationalisation of the Fund by the fourth quarter of 2018, which involves the appointment of a NGEF Board, and finalising the NGEF Operational Manual and its Business Plan.
Meanwhile the NGEF Task Force Chair, Jesse Benjamin, is appealing to all donor partners and development agencies represented in Vanuatu and international community to contribute into the Fund in its initial seed funding portfolio of approximately US$15 million.
This financial support will enable the Government of Vanuatu to initiate the NGEF core programs articulated in the National Energy Road Map (NERM).