Energy Sector

Fiji’s energy situation is characterized primarily by high reliance on imported fuels. Therefore, the Government is committed to reduce the reliance on imported fossil fuels by incentivizing energy generation through renewable energy sources in the country.

In Fiji, some of the major sources of energy generation are:

  • Hydro, which caters for a significant demand of electricity needs
  • Imported fossil fuels and
  • Biomass including fuel wood and crop residues for cooking and industrial residues for power cogeneration in the timber and sugar industries.

The transport industry is the largest consumer of energy, taking up an estimated 40 percent of total energy supply, followed by the commercial, industrial and domestic sectors. High reliance on imported fossil fuels remain a central issue for the energy sector. The potential impact on Fiji’s economy through high and volatile fuel prices and high import payments is significant, thus the need to reduce reliance on imported fuels and safeguard foreign reserves is considered key in ensuring economic stability.
This provides a natural drive for Fiji to find alternative energy sources in the form of renewable and indigenous fuels for both electricity production and transport services.

Due to the Fijian Government’s significant investment in rural electrification initiatives over the last two decades, the majority of the population are connected to the national electricity grid. However approximately 10% of the total population is still without proper electricity supply and challenges remain to connect the rural population to the national grid in a sustainable manner. In addition, where electricity supply is available, issues of affordability or inequalities within communities may prevent people from maximising the benefits of modern energy supplies. Access to electricity and share of renewable energy sources in electricity generation have increased significantly in the last 10 years. National electrification coverage was estimated at 90% (urban at 98% and rural at 80%) in 2012. Lack of access to energy supply in the remaining 20% of rural and maritime areas is a concern that needs to be addressed. Moreover, the current informal housing structure and arrangements in the urban areas have also been a major challenge. An estimated 54% of electricity was produced from a combination of hydropower, biomass, wind and solar energy for the years 2013, 2014 and 2015.

OPPORTUNITIES IN THE ENERGY SECTOR

  • Availability of untapped renewable energy resources such as hydro, wind, biomass, solar, and geothermal which could be used for power generation.
  • Readily available standards, guidelines and codes of practice for renewable energy and well established suitable renewable energy information systems.
  • Reduced duty, tax and excise incentives for renewable energy efficient equipment.
  • Fiji’s demand for energy has been increasing.
  • 10% of the total population is still without proper access to electricity.
  • Fijian Government provides an enabling environment for private sector participation in the electricity sector.
  • There are opportunities for replacing fossil fuels used in land transport through expanding the use of biofuels, hybrid and electric vehicles.
  • Potential to reduce fossil fuel consumption in maritime transport through use of renewable energies (biofuel, solar and wind) and improved efficiency of vessels and engines.
  • Opportunities for the private sector to invest in small-scale renewable energy systems.
  • 5-year tax holiday is available to a taxpayer undertaking a new activity in renewable energy projects and power cogeneration.
  • Duty free importation of renewable energy goods is also available.

INCENTIVES

BIO-FUEL PRODUCTION

10 year tax holiday is available to a taxpayer undertaking a new activity in processing agricultural commodities into bio-fuels as approved by the Commissioner from 1 January 2009 to 31 December 2018. To qualify, the taxpayer must have:-

  • Minimum level of investment of $1,000,000; and employ 20 local employees or more for every income year.
  • Duty free importation of plant, machinery and equipment for initial establishment of the factory.
    Duty free importation of chemical required for biofuel production.
  • The Importation of all agricultural items will be subject to zero duty.

RENEWABLE ENERGY PROJECTS AND POWER COGENERATION

  • 5 year tax holiday is available to a taxpayer undertaking a new activity in renewable energy projects and power cogeneration as approved by the Commissioner.
  • Duty free importation of renewable energy goods is also available.

SUSTAINABLE ENERGY FINANCING PROJECT (SEFP)

The project aims to significantly increase the use of  enewable energy and energy  efficiency technologies through partial loan guarantees to encourage local financial institutions to participate in sustainable energy finance in support of equipment purchase/installation. This is a Global Environment Facility funded project implemented in  the Pacific by the World Bank and the Department of Energy (DOE) is the executive agency in Fiji. Any supplier can provide equipment under this project as long as they meet certain equipment standards. Any financing institute can be approved to provide loans under this project and for which ANZ, FDB & HFC have qualified. The SEFP supports all renewable energy technologies such as Solar, Pico-Hydro, Coconut Oil Fuel, Wind, Biogas, etc. The SEFP also supports energy efficiency equipment. This loan scheme applies to everyone – individuals, communities, private, businesses (MSE), rural or urban.

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Fiji Trade Commission - PNG & MSG

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P: +675 320 2208/ E: info@fijitradecom.org

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