The rural economy in Fiji is dominated by sugarcane and subsistence farming. Expiry of some 10,300 farm leases over the next 25 years has resulted in experienced farmers leaving the sugar industry while landowners entered with limited capital and experience. The recent and possible future decline of the sugar industry poses a threat to Fiji’s domestic energy resources at a time when these are more and more at a premium, given the country’s dramatically increasing dependence on expensive imported petroleum products – for electricity generation as well as vehicle fuel.
Improved capacity and reliability of co-generation from the sugar mills could contribute approximately 40% of Fiji’s current grid-based electricity supply. This, combined with other power generation initiatives driven by the Fiji Energy Authority and Independent Power Producers (IPPs), can help both to reduce current expensive diesel imports (between 80 and 90 million Fiji dollars per annum) and to achieve the energy targets.
The goal of the Project was to create increased and diversified on- and off-farm livelihood opportunities for people in rural areas to offset adverse effects of sugar restructuring and lease expiry, and support poverty reduction.
Project design was set in the context of the Strategic Development Plan (SDP) which seeks to alleviate poverty by, first, providing income earning opportunities – as proposed through close government-private sector partnership, strengthening quarantine services and the like – and, second, building capacity to enable the poor to take up those opportunities – as proposed through better agricultural service delivery, agricultural and vocational training, promotion of small and micro-enterprises and provision of rural financial services (RFS).
OneWorld was involved in developing strategy scenarios for improving capacity and reliability of cogeneration through an economic analysis and technical specifications for cogeneration, which identified the potential for biomass supply for year-round co-generated electricity into the national grid. OneWorld furthermore helped in the establishment of separate IPPs for the cogeneration plants and creation of an enabling environment that supports IPPs in Fiji through the negotiation of power purchase agreements (PPAs) for each cogeneration facility, as well as developing an investor plan for each cogeneration facility.