This summary covers the equity investments by Korea Water Resources Corporation (“K-water”) and Hyundai Engineering Co., Ltd. (“HEC”) of the Republic of Korea into the Tina Hydropower Limited (“THL”). The investors have applied for MIGA guarantees of US$14.1 million for a period of 20 years against the risks of Transfer Restriction, Expropriation, War and Civil Disturbance and Breach of Contract.
The Project is to develop, construct, finance, operate and maintain a 15 megawatt hydropower plant on a build-own-operate-transfer (“BOOT”) basis. The Project is located on the Tina River, 20 kilometers southeast of Honiara, the capital city of the Solomon Islands. The Project will be developed by THL, a special purpose company owned by K-water and HEC. THL will sell electricity to the Solomon Islands Electricity Authority (“SIEA”), the state-owned vertically integrated power utility, under a 30-year power purchase agreement (“PPA”). THL also signed the Implementation Agreement (“IA”) and the Government Guarantee Agreement (“GGA”) with the government of the Solomon Islands on December 6, 2018.
The Project is the first utility scale hydropower project and the first BOOT project in the Solomon Islands. The Project is expected to generate power of 78.35 gigawatt hours per annum.
The project is a category A under MIGA’s Click to view the Environmental and Social Review Summary.
The Project is anticipated to have a significant contribution to the Solomon Islands’ development. It is expected that the Project will reduce the electricity retail tariff substantially once commissioned. Lower tariffs, in turn, are expected to help improve access to electricity, given that the high cost has been identified as a key factor for low electricity access and consumption in the Solomon Islands. Additionally, the Project is expected to generate environmental benefits by reducing carbon emissions as the reliance on diesel generation diminishes.