93522 Solomon Islands Sustainable Energy Project (SISEP), Additional Financing Improving the operational efficiency, system reliability and financial sustainability of Solomon Islands Electricity Authority. Transform SIEA into a Background sustainable, efficient and For many years, electricity supply in Solomon Islands has been limited in its coverage, subject to frequent customer-focused company. interruptions in service, and expensive. The Solomon Islands Electricity Authority (SIEA) faced significant challenges, including: poor metering and billing processes, poor collection rate, high levels of electrical Improve asset maintenance to losses, exposure to high and volatile fuel prices, and unevenly maintained generation and network increase reliability. infrastructure. These contributed to frequent power cuts across towns served by the SIEA. Improve energy efficiency, Since 2008, the World Bank has been working with the Solomon Islands Electricity Authority (SIEA) to reduce diesel consumption and address the numerous challenges it faces in providing reliable, sustained electricity at a reasonable cost. reduce the cost of energy. While the SIEA has made substantial improvements, the gains made to date need to be consolidated and built on. The Additional Financing will enable the project to be scaled up to improve the reliability, efficiency, and affordability of electricity supplies. About the Project The Solomon Islands Sustainable Energy Project (SISEP) is working to improve the operational efficiency, system reliability and financial sustainability of the national power utility, the Solomon Islands Electricity Authority (SIEA). Several measures have supported the SIEA’s financial situation since 2011, specifically: (a) improved corporate governance, with appointments to SIEA Board now being carried out under State Owned Enterprises Regulations (2010); (b) improved financial management and internal audit functions within SIEA; and (c) commercialization of SIEA, including a sharper focus on collections, reducing costs, improving customer service, improving plant maintenance and availability, and reducing electrical losses. This new funding will build on this success and support the SIEA’s efforts to strengthen the capacity of its main power grid to meet consumer demands for improvements in the reliability and efficiency of electricity Location: Honiara & SIEA’s supply. Since nationally uniform tariffs are used, improved efficiency will have a large impact on the customers across the country. affordability of power across the country. Approval Date for SISEP The accumulated profits of the SIEA since 2011 have eliminated all past accrued losses, enabled SIEA to be Additional Financing: March 21, recapitalized, and made it attractive to commercial financiers. The good financial performance of the SIEA 2014 has resulted in it being able to begin a comprehensive investment program to upgrade its generation capacity and distribution networks to improve the reliability and efficiency of service to existing customers, Closing Date: 2018 and to plan for grid expansions that will expand access to electricity. Total Project Cost: US$13 million The Additional Financing of SISEP supports the SIEA consolidate the gains made to date and move towards becoming a sustainable business, providing reliable, efficient and affordable power to its customers. A Donor: World Bank sustainable SIEA that is a financially credible buyer will be able to purchase power from the planned Tina River Hydro Project and any other renewable energy Independent Power Producer (IPP) projects in the International Development Agency future. With an increased use of renewable energy supplies, the affordability of electricity in Solomon (IDA) Grants — US$2 million Islands is expected to increase significantly compared to the present, where almost 100% of power is from International Development Agency diesel generation. (IDA) Credits — US$11 million Implementing Agency: Solomon Contact: World Bank Task Team Leader www.worldbank.org/pi Tendai Gregan, Energy Specialist, tgregan@worldbank.org Islands Electricity Authority (SIEA)