AU Backed Palau Solar + Battery Project Progresses

Palau solar and battery storage project

It shouldn’t be too long before the people of Palau benefit from a big injection of renewable energy into their electricity system; thanks in part to Australia.

Where The Heck Is Palau?

Palau is an archipelago consisting of hundreds of islands situated in the Micronesia region in the western Pacific Ocean. Home to around 18,000 people, Palau’s capital is Ngerulmud; but the largest city is Koror City. The distance from Darwin to Koror City and Ngerulmud is around 2,250 kilometres.


Palau has a very heavy dependence on imported diesel for power generation. More than 99 per cent of its electricity is generated using the pricey and polluting fossil fuel. Palau’s energy sector contributes up to 96 per cent of all national greenhouse gas emissions.

Australia’s Department of Foreign Affairs and Trade (DFAT) points out Palau has one of the world’s highest per capita greenhouse gas emissions rates. What DFAT doesn’t mention is that among the countries with higher per capita emissions is (or at least, was) Australia. That’s based on 2019 World Bank data.

Anyway, like many diesel-dependent island nations, Palau is seeking to wean off its fossil fuel addiction. This will not only slash emissions, but save money.

Australia Pitches In For Solar Power And Storage

Through the Australian Infrastructure Financing Facility for the Pacific (AIFFP)1, USD $22 million in financing has been provided to support the construction of Palau’s first utility-scale solar and battery energy storage facility. The financing is made up of a USD $18 million loan at a fixed interest rate of 4.75% over 17 years, plus a USD $5 million grant thrown because Australians are good folks.

DFAT says:

“.. the AIFFP’s investment in Palau demonstrates that value for money can go beyond more than just price to also encapsulate robust social and environmental outcomes which maximise development impact.”

Currently under construction on Babeldaob, Palau’s largest island, the facility will boast 15.28MW of solar capacity and a 12.9-megawatt battery energy storage system (BESS).

Australian Minister for Foreign Affairs Penny Wong, visited the project last week.

Australian Foreign Minister Penny Wong at Palau solar project site

This single facility will generate 23,000 MWh of clean and renewable energy for Palau per annum once fully operational, representing more than 20 percent of the nation’s annual electricity demand. The clean power plant will give Palau a mighty boost towards achieving a renewable energy target of 45 percent by 2025.

The solar + storage project is being constructed by Philippines-based Solar Pacific Energy Corp., a subsidiary of Alternergy. According to Altenergy the facility is now 65 per cent complete and the company aims to have it finished by April next year.

“The opportunity to provide renewable power to the Republic of Palau, one of our neighboring Pacific island nations, is consistent with our vision to powering the islands with renewable energy resources,” said Solar Pacific Chairman Vince Perez.

Mr. Perez served as the Philippines’ Energy Secretary from 2001 to 2005.


  1. Established by the Morrison Government in 2019, the AIFFP partners with governments and private sector to provide grant and loan financing for energy, water, transport, telecommunications and other infrastructure in the Pacific and Timor-Leste.
About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.

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