The Solomon Islands seeks to greatly increase access to reliable electricity supply, whilst also increasing the use of renewable energy to 50% by 2020. The Tina River Hydropower Development Project (TRHDP) will respond to these goals with a 15MW installation providing 65% of electricity demand for the capital Honiara by the online date of 2022. TRHDP will provide the Solomon Islands with reservoir capacity, giving flexibility to the power system to enable higher penetration of PV power without the need for large and expensive energy storage or diesel generators.

The Project is the first utility-scale power plant in the Solomon Islands to be developed on a BOOT arrangement. IDA, with financial support from the Government of Australia, has been supporting SIG and the Project Office under MMERE to identify and develop a bankable feasibility study since 2007 to attract investor interest, and the IFC has been the transaction advisor to SIG providing support in the competitive selection of the investor and in negotiating on the commercial terms of the BOOT scheme. Developing large infrastructure and simultaneously introducing public-private partnerships in SIDS have unique challenges, and all stakeholders have been exposed for the first time to planning and design of utility-scale hydropower project, optimization of the power system with generation sources other than diesel units, transparent and competitive selection of investors, commercial terms of the Project, government guarantees and undertakings, negotiation with private investors, financial structuring, environmental and social safeguards, benefit-sharing mechanism, gender action plan, etc. SIG has significantly built their capacities in all these areas with the support of global experts in hydropower planning and design, environmental safeguards, migratory fish, land acquisition, gender, climate change resilience, benefit-sharing, power system planning, finance, legal and PPP. SIG is also benefiting from the continuous professional advice provided by the Dam Safety Advisory Panel and the Environmental and Social Panel to ensure that the Project is designed based on international best practice. Pursuant to the Implementation Agreement and the PPA, the Project Company will operate the Project for 30 years. During this time, as per the requirement to be stipulated in the PPA, SIEA personnel will be trained to learn the O&M of a hydropower plant. Since SIEA does not have any experience operating a hydropower plant, the training program is critical for SIEA to build its O&M capacity of the plant which will be handed over to them at the end of the concession period. Such training will not only be on daily O&M of the plant, but also on optimization of reservoir operations including flood control functions of the dam, sediment management and flushing/sluicing, monitoring and management of environmental impacts, periodic maintenance of major equipment, and replacement of electro-mechanical equipment after about 10-15 years.

The Project comprises four components (Tina River Hydropower Plant; Access Road; Transmission Line; and Technical Assistance), each with separate implementation arrangements. The Project Office in MMERE will have overall responsibility for ensuring effective project implementation across the components. In addition, SIG will form a Steering Committee comprising Ministry of Finance and Treasury (MOFT), MMERE, MECDM and the Ministry of Infrastructure Development (MID); and the donors will form a Donor Coordination Committee to collectively ensure adequate implementation and fiduciary control, as well as to streamline reporting requirements by SIG. For Component 1, the Project Company and the EPC contractor will enter into a fixed-price turnkey contract, and the works (Components 1 and 2) will be supervised by the Project Company. In addition, the Project Office will also supervise the construction to ensure that the laws and regulations of SIG are adhered to. In addition, the Independent Engineer, to be recruited and financed jointly by the Project Company and SIEA, will ensure that the provisions of the PPA are met. Furthermore, DSAP, recruited by the Project Office under Component 4, will review the detailed design and construction to ensure the integrity and safety of the hydropower plant with a particular focus on the dam. The transmission line (Component 3) will be supervised by SIEA with the assistance of a consulting firm which SIEA maintains on a retainer basis. The independent monitoring agents and the E&S Panel recruited by the Project Office under Component 4 will ensure the enforcement of measures stipulated in the Environmental and Social Management Plan and the Land Acquisition and Livelihood Restoration Plan.

International Bank for Reconstruction and Development and International Development Association (World Bank), and Ministry of Finance and Treasury (MOFT) of Solomon Islands