Last Tuesday, AusAID Australia and the World Bank's Global Environment Fund (GEF) reached an agreement to give the government of Kiribati US$5 million (AU$4,779,000, NZ$5,985,000, €3,885,000) to install solar panels around the country capital, located on the Tarawa atoll.  According to Business Desk of the Brunei Times, 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 (NZ$635 million) package announced at yesterday's Pacific Energy Summit in Auckland involving 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.  Also at the summit yesterday, New Zealand's Foreign Affairs Minister Murray McCully 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 diesel fuel 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 Anote Tong 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." Radio New Zealand International 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.
One News 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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Kiribati acquires international funding for solar power