Manatuto Renewables Power secures $85.7 million in financing from ADB, Canada, JICA and the World Bank Group to build Timor-Leste's first solar and battery storage plant.
The Asian Development Bank (ADB), the Government of Canada, the Japan International Cooperation Agency (JICA) and the World Bank Group have announced a partnership to finance Timor-Leste’s first utility-scale solar and battery storage project. The facility, operated by Manatuto Renewables Power, is also the country’s first independent power producer project. It is intended to reduce Timor-Leste’s reliance on imported diesel for electricity generation.
The project covers the development, construction, operation and maintenance of a 73.7 megawatt-AC grid-connected solar photovoltaic plant, combined with an 80.2 megawatt-hour battery energy storage system, along with transmission lines and ancillary facilities. According to the partners, the electricity generated annually would be equivalent to the typical consumption of approximately 80,000 households, or close to 400,000 people in the country. The electricity produced will be sold to Electricidade de Timor-Leste, Empresa Publica (EDTL, E.P.) under a 25-year power purchase agreement. Similar arrangements combining solar generation and battery storage are also emerging in other developing markets, such as the 500 MWp Ixus Bugallon solar project financed by Vena Energy in the Philippines, the two 15-year battery storage capacity auctions launched in Brazil, and the wind-solar hybrid power purchase agreement secured by ACME Solar in India.
Total financing for the project reaches $85.7 million, according to the partners. It includes $12.2 million in senior loans from ADB, $19 million from the International Finance Corporation (IFC), part of the World Bank Group, and $12.2 million financed by JICA. The agreement also includes concessional loans, including $21.2 million from ADB’s Leading Asia’s Private Infrastructure Fund 2 (LEAP2), supported by JICA and by the Canadian Climate and Nature Fund for the Private Sector in Asia (CANPA), itself backed by the Government of Canada. An equivalent $21.2 million comes from the International Development Association’s Private Sector Window (IDA PSW) and the IFC Concessional Capital Window, two World Bank Group instruments.
ADB acted as transaction advisor to EDTL, E.P., leading the structuring and competitive procurement of the project. It was awarded to EDF power solutions, S.A., a subsidiary of EDF Group, and to I-Environment Investments Pacific Pty Ltd, a wholly owned subsidiary of ITOCHU Corporation. The World Bank Group acted as lead arranger for the loan package. According to Paulo da Silva, Executive Commission President of EDTL, E.P., the project represents a key milestone toward the goal set by the National Strategic Development Plan 2011-2030, which targets 50% renewable energy in the country’s electricity mix by 2030.
Michael Walsh, ADB Country Operations Head for Timor-Leste, said the project demonstrated the feasibility of private investment in the utility-scale power sector, particularly for countries affected by fragility and conflict as well as small island developing nations. Alice Birnbaum, Head of Development Cooperation and Chargée d’affaires at the Embassy of Canada to Indonesia and Timor-Leste, noted that it was Canada’s first climate-fund investment in the country, delivered through ADB. Takehiro Yasui, Director General of the Private Sector Partnership and Finance Department at JICA, and David Freedman, World Bank Group Representative for Timor-Leste, also voiced support for the operation.
The Multilateral Investment Guarantee Agency (MIGA), the World Bank Group’s guarantee platform, has approved a 20-year political risk insurance guarantee for EDF power solutions and I-Environment Investments Pacific, covering their investments in Manatuto Renewables Power. A portion of this guarantee will come from the MIGA Guarantee Facility, an IDA PSW instrument, structured as a first-loss layer. The arrangement fits into a broader push to mobilize concessional financing for renewable energy in emerging markets and island economies.
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