Sustainable Energy Financing Program

The Sustainable Energy Financing Project aims to significantly increase the adoption and use of renewable energy technologies in participating Pacific Island states through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in support of equipment purchase. In addition, the global environment objective is to contribute to mitigating climate change through the reduction of greenhouse gas emissions in line with the United Nations Framework Convention on Climate Change. The project has four components: 1. Risk Sharing Fund and Renewable Energy Investments which will be used to provide innovative financing support to facilitate the flow of finance from local financial institutions to sustainable energy and energy efficiency investments. 2. Technical Assistance, Market Surveys and Communications for technical assistance to financial institutions, technical assistance for micro and small enterprises, developing and updating a project catalogue, participant training and communications, and technical assistance for utilities and studies. 3. Participant Monitoring. 4. Management & Evaluation.

Revised Project Development Objective (PDO) as per the project restructuring of 2018 (Fiji and Vanuatu):
(i) To significantly increase the adoption and use of renewable energy technologies and the more efficient use of energy through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in the Participating Pacific Island States;
(ii)To support knowledge sharing and capacity building on renewable energy and energy efficiency technologies in the Participating Pacific Island States.
Revised GEO objectives of the Project: To
(i) significantly increase the adaptation and use of renewable energy technologies and the more efficient use of energy through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in Fiji; and
(ii) support knowledge sharing and capacity building on renewable energy and energy efficiency technologies in the participating countries.
Former Project Development Objectives (PDO):
Revised PDO as per the project restructuring of 2014 (Fiji focus):
1. To significantly increase the adoption and use of renewable energy technologies and the more efficient use of energy through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in Fiji;
2. To support knowledge sharing and capacity building on renewable energy and energy efficiency technologies in the PICs.
Project Appraisal Document (PAD, page 3)
"To significantly increase the adoption and use of renewable energy technologies in participating Pacific Islands Countries (PICs) through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in support of equipment purchase ".
Original Global Environment Objective (GEO):
" To contribute to mitigating climate change through the reduction of greenhouse gas emissions in line with the United Nations Framework on Convention on Climate Change ".

Component 1: Financing Investments in Renewable Energy (RE) and Energy Efficiency (EE)
Objective: Increase lending for clean energy technologies through a Risk-Sharing Fund (RSF).
Expected Outputs:
• Establishment of a Risk-Sharing Fund (RSF) in Fiji, PNG, Solomon Islands, and Vanuatu to partially guarantee loans for RE and EE investments.
• PFIs (Participating Financial Institutions) — commercial and development banks (ANZ, FDB, HFC) — to offer loans for renewable energy systems (solar PV, pico-hydro, coconut oil fuel switching).
• Guarantees covering up to 50% of the net outstanding principal of loans issued by PFIs to eligible borrowers.
• Loan portfolios developed for at least three end-user groups:
1. Rural households using kerosene for lighting.
2. Medium-sized enterprises (MSEs) and village institutions using diesel or other fossil fuels.
3. Renewable Energy Service Companies (RESCOs) installing and maintaining RE systems.
• Increased lending volume for clean energy projects (targeted USD 18.9 million regionally).
• Increased number of RE systems installed through private sector finance (e.g., target of 23,000 solar PV systems, 540 pico-hydro units, and 720 diesel-to-coconut-oil conversions).
Component 2: Technical Assistance (TA), Market Incentives, and Communications
Objective: Build market confidence, institutional capacity, and awareness for sustainable energy financing.
Expected Outputs:
• Capacity-building programs for PFIs to assess and manage RE loans.
• Training of PFI staff in evaluating RE/EE project creditworthiness and portfolio risk management.
• Capacity-building support for MSEs, wholesalers, and dealers to make them bankable and reliable RE suppliers.
• Vocational training modules for repair, maintenance, and technical servicing of solar systems.
• Creation of an approved Renewable Energy Product Catalogue, listing all eligible RE/EE technologies for financing in each participating country, updated periodically for price and technology improvements.
• Market surveys to identify consumer demand and affordability for renewable energy technologies.
• Incentive schemes (rebates or interest rate reductions) to encourage adoption of renewable energy by end-users.
• Awareness campaigns via community outreach, workshops, and communication materials to inform households and businesses of RE benefits.
• Support for RE dealers and wholesalers to attend international trade fairs and training sessions for exposure to best practices.

Component 3: Participant Monitoring and Communications
Objective: Track progress and increase end-user understanding of RE systems.
Expected Outputs:
• Establishment of a monitoring system to evaluate customer understanding and satisfaction with financed RE equipment.
• Feedback and data collection systems through PFIs and implementing agencies to track loan performance, repayment, and RE use.
• Communication campaigns to promote knowledge of safe operation and maintenance of RE systems.
(This component was later dropped and merged with Component 4 during restructuring.)

Component 4: Project Management and Evaluation
Objective: Ensure smooth and transparent implementation across countries.
Expected Outputs:
• Recruitment of Management Consultants to assist executing agencies during the first three years.
• Project coordination units established in each participating country (Fiji, PNG, SI, Vanuatu).
• Preparation of financial and technical reports quarterly by executing agencies.
• Establishment of a regional executing agency (Fiji’s Department of Energy) to coordinate after year 3.
• Regular supervision missions and monitoring by the World Bank.

Component 5: Regional Knowledge Sharing and Capacity Building (added in restructuring)
Objective: Scale up lessons and success from Fiji to other Pacific Islands.
Expected Outputs:
• Regional workshops and knowledge-sharing events showcasing Fiji’s RE financing model.
• Technical assistance to governments and PFIs in non-participating PICs (e.g., Samoa, Tonga, Cook Islands) to replicate SEFP model.
• Training of trainers (ToT) to establish regional expertise in RE/EE financing.
• Information exchange networks among Pacific Islands energy agencies.
• Regional awareness campaigns on RE technologies, costs, and financing.

• USD 21,530,000.00 in loans mobilized in Fiji by participating financial institutions (PFIs) - double the revised target (USD 10,000,000.00).
• 70 loans approved in Fiji for medium-sized enterprises (MSEs), community organizations, and individuals.
• Achieved a non-performing loan ratio (NPL) of just 1%, showing extremely high repayment reliability and sustainability.
• Risk-Sharing Fund (RSF) established and successfully operated through ANZ, Fiji Development Bank (FDB), and Home Finance Corporation (HFC).
• Demonstrated that commercial lending for renewable energy could be viable in Pacific Islands when risk-sharing incentives are applied.
• 15,057 solar photovoltaic (PV) systems sold and installed for rural households and small businesses across participating countries (primarily Fiji).
• 11 diesel-to-coconut-oil fuel conversion systems installed (demonstrating biofuel use for rural power generation).
• Energy efficiency technologies financed for local enterprises (total installed RE/EE capacity reached 4.49 kW - slightly below target, but effective within Fiji).
• Avoided 6.65 tons of CO₂ emissions, directly contributing to Fiji’s and the Pacific’s climate mitigation goals.
• Supported development of local RE dealers and suppliers, creating a domestic RE service and maintenance industry.
• Renewable Energy Product Catalogue established and regularly updated to standardize eligible equipment across the region.
• Capacity building programs delivered for PFIs (bank staff trained to evaluate RE/EE lending).
• Training and technical assistance provided to MSEs and community enterprises to improve financial literacy and business management for energy projects.
• Knowledge sharing and regional exchange programs reached 11 Pacific Island countries, promoting replication of Fiji’s model.
• 21 public communications (articles, radio, TV) produced to raise awareness on the benefits of RE and EE.
• 65 community showcases and presentations held in rural areas to demonstrate solar and biofuel technologies.
• Vocational institutions in Fiji supported to provide training for repair and maintenance of solar and energy-efficient equipment.
• Regional workshops facilitated by the World Bank helped governments and utilities in other Pacific Islands (Vanuatu, Solomon Islands, PNG, RMI) understand RE financing mechanisms.
• Contributed to the Fiji Department of Energy’s technical and managerial capacity in energy sector project implementation.
• Demonstrated the feasibility of a risk-sharing financing model for renewable energy in small island economies.
• Catalyzed private investment and interest from banks and end-users in sustainable energy lending.
• Influenced regional energy and climate policy frameworks in Fiji and Vanuatu by incorporating sustainable finance principles.
• Supported integration of RE financing elements into subsequent projects, such as the Vanuatu Rural Electrification Project (VREP).
• Introduced the concept of “commercially sustainable rural electrification” - combining concessional finance, local entrepreneurship, and private-sector engagement.
• Enhanced energy access for rural and peri-urban households, reducing dependency on kerosene and diesel.
• Lowered household energy costs, freeing up income for education, food, and health.
• Improved livelihoods through new income-generating opportunities for small businesses powered by RE systems.
• Strengthened resilience of rural communities by providing clean, reliable energy systems during natural disasters.

While not a standalone gender-focused project, SEFP embedded several gender-relevant and socially inclusive features, mainly through the safeguards, beneficiary targeting, and community-level impacts.
1. Inclusion of Women and Vulnerable Groups
• The project targeted rural and low-income households, which included a high proportion of women-led and indigenous households.
• Women benefited directly from reduced household energy burdens — less time collecting fuel and improved household lighting, allowing extended hours for domestic, educational, or income-generating activities.
• Women entrepreneurs (especially those in rural micro-enterprises) accessed energy loans to expand small businesses such as tailoring, handicrafts, and food processing using solar energy.
• By promoting solar home systems, the project improved safety, productivity, and education for women and girls, particularly in communities without grid power.
2. Safeguards and Indigenous Peoples Policy
• The project triggered the World Bank’s Indigenous Peoples safeguard (OP 4.10) — ensuring that project benefits reached indigenous Fijians and Ni-Vanuatu equitably.
• Activities were carried out in full consultation with local communities, respecting traditional land ownership and decision-making.
• No involuntary resettlement occurred; all interventions were community-driven and voluntary.
3. Institutional Gender Mainstreaming
• The Department of Energy (Fiji) incorporated gender-sensitive indicators and required equitable participation of women in training and awareness events.
• Capacity-building and awareness campaigns ensured gender balance among participants, especially at community showcases and local training workshops.
• The project’s knowledge-sharing activities (community showcases, public broadcasts) included gender-balanced community participation to ensure both men and women understood the benefits of RE and EE systems.
4. Broader Gender Impacts (Indirect)
• Reduced household air pollution from kerosene use — benefiting women’s and children’s health.
• Enabled women’s economic empowerment through micro-enterprises using renewable energy-powered tools.
• Education benefits — better lighting improved study conditions for children, particularly girls.
5. Evaluation Perspective
• The IEG Review acknowledged that while gender was not a central theme, the project’s design inherently promoted gender equity through universal access, indigenous participation, and rural development.
• Gender and inclusion aspects were addressed through social safeguards compliance, beneficiary participation, and equitable targeting in energy access and financing.

• Total Amount of Project (USD 19,970,000.00):
- Original Commitment: USD 8,904,486.68 ($8.90 million)
- Revised Commitment: USD 3,654,465.99 ($3.65 million)
- Actual Disbursed: USD 2,058,488.50 ($2.06 million)
• Project cost: The estimated cost at appraisal was USD 58,460,000.00 (PAD Annex 5). Based on the data in the Implementation Completion Report (ICR), the actual cost at project closing was at least USD 72,740,000.00. However, the final total cost cannot be ascertained, given that many costs were not monitored.
• Regional Scope: Initially five countries ( Fiji, Papua New Guinea, Republic of Marshall Islands, Solomon Islands and Vanuatu), later focused on Fiji and Vanuatu. Project was regional 2008 - 2014, Fiji focused 2014-2018, Fiji and Vanuatu focused RSF 2018 - 2022.
• Changes: The Project was restructured six times (two level 1 restructurings and four Level 2 restructurings).
- Within Fiji, the project scope was modified: As discussed in section 2, the targeted end-users of RSF envisioned at design were: (i) individual borrowers; (ii) MSEs; and (ii) RE equipment retailers. Local PFIs in Fiji found most individual borrowers in rural areas to be "non-bankable". Hence, the PDO was revised from " significantly increase the adoption and use of RE technologies in participating PICs through a package of incentives to encourage local PFIs to participate in sustainable energy finance in support of equipment purchase (by the targeted end-users)" to " significantly increase the adoption and use of RE technologies and the more efficient use of energy through a package of incentives to encourage local PFIs to participate in sustainable energy finance in Fiji".
• Outcome Rating (IEG): Moderately Unsatisfactory overall (due to delays), but Substantial performance in Fiji.
• Lead Institutions: World Bank Energy & Extractives Practice, East Asia and Pacific Region.