Infrastructure in EAP
The World Bank is currently working to assist nine Pacific Island member states: Fiji, Micronesia, Kiribati, the Marshall Islands, Palau, the Solomon Islands, Samoa, Tonga, and Vanuatu. Given the differences among the group and the involvement of multiple donors, the Bank has to be selective about which countries to engage on a sustained basis for effective development assistance.
The Solomon Islands has an electricity supply of two diesel power stations, Lungga and Honiara with a total installed capacity of about 24 MW. Generation capacity has recently been restored to meet minimum critical supply levels at a cost of about A$150,000, raising installed capacity to about 14.8MW. Maximum demand is about 10MW. The installed capacity in the provinces is about 6.2 MW. SIEA has about 23,750 customers. Solomon Island Electricity Authority (SIEA) remains in a state of near financial collapse. Following domestic unrest, about 50 percent of private sector customers in Honiara were lost in 1999 and 2000 including many of the larger commercial consumers. Despite the many problems, the Government has been keen to receive some dividend from SIEA.
In March 2001, the Government increased tariffs by 20 percent in an effort to boost the finances of SIEA. But this increase was soon fully absorbed by fuel price rises. Other costs have increased with annual inflation running at about 15 percent. The SI currency has devalued about 50 percent against the US dollar since 2000. SIEA’s accounts have not been audited for several years. The Bank is currently supporting the development of options for private power investment and a financial restructuring plan including a valuation of assets with PPIAF support.
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