The energy sector (represented by Electricity and Water Supply) grew at an average rate of 0.3% (2010-2014) and representing 27% of the total output in the Industry sector according to the 2014 GDP estimate produced by the National Statistics Office. Electricity distribution has been and remains a service provided by the private sector with the two main operators being Union Electrique du Vanuatu Limited (UNELCO) and Vanuatu Utilities and Infrastructure Limited (VUI). The two operators are operating in 4 (four) concession areas on the islands of Efate, Santo, Malekula and Tanna.
Energy source for the two main electricity operators has been and remain diesel fuel. Petroleum products will continue to play a key role in meeting Vanuatu's energy needs and the near-to-medium term. With this in mind, improving the efficiency, reliability and cost of petroleum supply remains an priority for the Government and the NERM.
Energy is indeed an important enabler for the country's economy. Given recent Government's push for more developments in particular in the rural parts of the country, the need for this sector to grow cannot be overlooked. A number of developments are already taking place resulting in some parts of the country having access to electricity. However, there is still more to do. Current reports on access to reliable source of energy ranks Melanesia the lowest of which Vanuatu is one.
The National Energy Road Map (NERM) has identified 4 priority areas of which two have been selected as having huge potential investment opportunities.
- Accessible Energy - Relative to other countries (including in the Pacific countries), electricity levels in Vanuatu are unusually low. It is estimated that 83% of households in the rural areas do not have access to electricity compared to 20% of households in the urban areas.
- Secure and reliable energy - achieve a greater diversity of energy sources
- Affordable energy - Promote investments in least-cost electricity projects
- Extend electricity access to all households and public institutions
- The NERM is Government's strong commitment to deliver accessible and affordable energy to its communities
- Incentives provided to energy contractors
- Donor support through Government's Bilateral Agreements play a huge role