Palau: Disaster Resilient Clean Energy Financing - Additional Financing
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.
Project Details
-
Project Officer
Abbasov, Rafayil
Pacific Department
Request for information -
Country/Economy
Palau -
Sector
- Energy
Related Projects
| Project Name | Disaster Resilient Clean Energy Financing - Additional Financing |
| Project Number | 54011-002 |
| Country / Economy | Palau |
| Project Status | Proposed |
| Project Type / Modality of Assistance | Grant |
| Source of Funding / Amount | |
| Strategic Agendas | Inclusive economic growth |
| Drivers of Change | Gender Equity and Mainstreaming Governance and capacity development Knowledge solutions Partnerships Private sector development |
| Sector / Subsector | Energy / Energy efficiency and conservation |
| Gender Equity and Mainstreaming | Effective gender mainstreaming |
| Description | 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 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 |
| Outcome | Consumers' energy expenditures reduced |
| Outputs | Disaster resilient clean energy financing for eligible borrowers made available Accessibility to disaster resilient clean energy loans for eligible women borrowers improved Capacity and awareness of stakeholders increased Advance low-carbon technologies in clean energy projects made available. |
| Geographical Location | Nation-wide |
| Safeguard Categories | |
|---|---|
| Environment | FI |
| Involuntary Resettlement | FI |
| Indigenous Peoples | FI |
| Summary of Environmental and Social Aspects | |
|---|---|
| Environmental Aspects | |
| Involuntary Resettlement | |
| Indigenous Peoples | |
| Stakeholder Communication, Participation, and Consultation | |
| During Project Design | |
| During Project Implementation | |
| Responsible ADB Officer | Abbasov, Rafayil |
| Responsible ADB Department | Pacific Department |
| Responsible ADB Division | PAEN |
| Executing Agencies |
Ministry of Finance 3rd Floor, Executive Bldg, ROP Capitol Ngerulmud, Melekeok State,P.O. Box 6011 Koror, PW 96940, Republic of Palau |
| Timetable | |
|---|---|
| Concept Clearance | 06 Sep 2021 |
| Fact Finding | 01 Feb 2022 to 28 Feb 2022 |
| MRM | - |
| Approval | - |
| Last Review Mission | - |
| Last PDS Update | 08 Sep 2021 |
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