New Zealand is set to invest nearly NZ$8 million (US$6.6 million) in a new large-scale PV system, according to Foreign Minister Murray McCully. The 1MW plant will be situated on Tonga, and with an annual energy generation capacity of 1880 MWh it is expected to cater for around 4% of the island’s energy requirements.

Construction on the project, which is being funded through a public-private partnership with Meridian Energy, Tonga Power and the Tongan Government, is scheduled to begin before the end of the year. When completed, it will help reduce energy prices for Tongan households, which currently pay up to seven times more for electricity than mainland New Zealanders.

The NZ$7.9 million (US$6.6 million) investment is part of a renewable energy package unveiled by McCully ahead of the Pacific Island Forum meeting, with the aim of supporting energy alternatives and reducing consumer costs.

“We want to share our considerable knowledge of this sector with our Pacific neighbours, and Meridian Energy’s experience in renewable energy makes them a logical partner for the Tongatapu solar project,” McCully told a Pacific investment summit in Auckland on Tuesday. "This public-private partnership is an exciting approach to delivering aid that also represents a possible model for similar infrastructure projects in the Pacific."

Tongan Prime Minister Lord Tu’ivakano also welcomed the investment and the role it will play in supporting his country's 10-year plan to reduce reliance on imported fuel. “The Tonga Government is grateful for such an assistance, which will contribute to Tonga’s target of reducing fossil fuel use by 50% by the end of 2012,” he said.