Renewable energy projects across the Pacific Islands are set to receive a $635 million boost after an agreement was reached today.
The funding package was secured at the Pacific Energy Summit in Auckland, but falls short of the $800 million that Pacific leaders were hoping to get.
The money will go towards projects to enable Pacific nations to ditch their reliance on fossil fuels, which are expensive to ship to the islands.
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Pacific countries spend 10% of their GDP on diesel to generate electricity, and, on average, a quarter of the region's import bill is spent on diesel.
ONE News Pacific Correspondent Barbara Dreaver said the funding will be "so important for the islands".
Regional leaders arrived in Auckland this week for the summit in a bid to drum up support for cheaper, cleaner, forms of energy.
Today Foreign Affairs Minister Murray McCully announced an agreement had been reached.
Partners and donors agreed to commit $255 million in grant funding and $380 million in concessional loans to support over 40 of the 79 proposed projects.
Investors include co-hosts New Zealand and the European Union, Australia, the Asian Development Bank, the European Investment Bank, the Japan International Cooperation Agency, the World Bank Group, and the United Arab Emirates.
"Clean and efficient modern energy services are the cornerstone of sustainable development, economic activity and poverty reduction," McCully said in a statement.
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"Currently, the Pacific region meets around 80% of its electricity generation needs from expensive imported fossil fuels. Yet the region has abundant renewable energy resources, including hydropower, solar, wind, biomass and geothermal.
"Investment projects featured by Pacific Island countries at the summit would help many of them increase their power generation from renewable resources to close to 50% of total supply."
He said he expects to see action within the next three to four years.
Andris Piebalgs, EU development commissioner, said the EU welcomed the opportunity to form innovative partnerships, particularly with the energy sector.
"Investing in global renewable energy reflects the needs of our modern world. Working with our partner countries in the Pacific, the EU is committed to catalyse real change quickly, bringing citizens and business together to provide security, sustainability and prosperity," Piebalgs said.
McCully also announced $65 million of New Zealand funding to assist Pacific Island countries to realise their renewable energy and energy efficiency plans. Support was announced for the Cook Islands, Kiribati, Papua New Guinea, Samoa, Tonga and Tuvalu.
Dreaver said $10 million of this money will go towards wind and solar farms.
"By the end of 2020 we're expecting them to be completely off diesel, using renewable energy," she said.
"In Kiribas a third of the country doesn't even have power, so we are actually giving them something that they don't have.
"Government's will be able to put the money they (currently) spend on diesel into things like education and health."
Solar panel installation in the United States 
Last Tuesday,  Australia and the World Bank's Global Environment Fund (GEF) reached an agreement to give the government of Kiribati 5 million (4,779,000, 5,985,000, 3,885,000) to install  around the country capital, located on the  .  According to  of , AusAID promised AU$3.2 million in funding, while GEF promised US$1 million.  The country was the first in the Pacific to make a deal with the World Bank.

The funding was part of a US$530 million (635 million) package announced at yesterday's Pacific Energy Summit in  involving New Zealand and the European Union, Australia, the , the , the , the , and the United Arab Emirates.  Also at the summit yesterday, New Zealand's Foreign Affairs Minister  had announced a national commitment of USD$54,262,000 (AU$51,861,000 NZ$65 million, €42,178,000) to Pacific region energy solutions, of which US$8,348,000 (AU$8 million, NZ$10 million, €6,483,000) would be specifically earmarked for renewable energy and improved energy efficiency in the Cook Islands, Kiribati, Papua New Guinea, Samoa, Tonga, and Tuvalu.
Kiribati is heavily dependent on  for most of the energy available on the national power grid, which supplies power to half Kiribati's population of 110,000. In addition, a third of the country's population lacks access to electricity. Once installation of the solar panels is complete, they are estimated to reduce diesel consumption by 230,000 liters (60,760 gallons) a year and give access to the electricity to some parts of the population that currently have no electricity.  The European Union already has committed €100 million to sustainable energy in the region, with €10 million of that coming as a result of an announcement made last week. 

In a press release about the news, Kiribati President  was quoted as saying, "Kiribati faces big challenges it is remote, it is at risk from the effects of climate change, and it is vulnerable to economic shocks. ... Shifting Kiribati's focus to reliable solar energy will provide a more secure, more sustainable power source for the country's people." '''' quoted Tong as saying, "It's the first time we are doing this. We're excited at the prospect of even substituting fossil fuel to a small extent at this stage. What the system being envisaged will only produce around 500 kilowatts, but this is the beginning of what I hope will be a pattern, the trend in the future."

The European Union's Fiji-based head of operations for the Pacific region, Renato Mele, supported alternative energy solutions like solar power for the region, but said that solar power had limitations because climate and environmental conditions sometimes meant batteries required to power the panels had a life of only 12 months, compared to other climates where batteries normally last five years.  This created the potential to drive up standard operating costs. Mele has also noted these additional costs though are still lower than the cost of diesel power.

'''' Pacific Correspondent Barbara Dreaver noted, "Governments will be able to put the money they (currently) spend on diesel into things like education and health."


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