MoF-ADB sign US$35 million loan agreement to improve energy distribution

MoF-ADB sign US$35 million loan agreement to improve energy distribution

(Image Tatoli/Antónia Gusmão)

DILI, 20 december 2021 (TATOLI) – The Ministry of Finance (MoF) and the Asian Development Bank (ADB) signed a US$35 million loan agreement to improve energy distribution and strengthen the energy financial services of Electricidade de Timor-Leste (EDTL).

The loan agreement was signed by Minister of Finance, Rui Augusto Gomes, and the Representative of ADB, Tiago Ribeiro, witnessed by the Minister of Foreign Affairs and Cooperation (MNEK), Adaljiza Reis Magno, the Minister of Public Works, Salvador Eugenio Soares dos Reis Pires, and the Vice Minister of Finance, Sara Lobo Brites and relevant entities of both parties.

In the signing of the ceremony, Timor-Leste Minister of Finance, Rui Agusto Gomes considered the loan was important for the EDTL, as it was the first time EDTL received financial support from the development partner, following its transformation to an institute of public enterprise.

“This initiative aims to modernize the energy sector in Timor-Leste,” Minister Gomes made the comments during the signing of the loan agreement at the Ministry of Finance, in Dili, on monday.

He said the modernization of the EDTL included the distribution of 140.000 smart meters and the distribution of electricity prepaid credit to all households across the country, as well as the installation of automation of power distribution system and the installation of 30 power line transformers.

“This project would create job opportunities for women in the energy sector through training for all households, focusing on electricity security and electricity use. In addition, US$15 million of the loan would be also used to finance the rehabilitation of the infrastructure of the distribution power line and the construction of EDTL’s offices in 12 municipalities,” said Gomes.

Gomes said modernizing Timor-Leste’s energy sector required investment; therefore, the government had decided to not heavily depend on the petroleum fund for national investment but came up with another option through ADB’s concessional loans with small interest.

“The Government continues to approach the International Financial Institutions to get concessional loans with small interest to finance the infrastructure investment, which would contribute to the nation’s economic growth in the country,” said Gomes.

The petroleum fund generated an annual return of 4.87 percent compared to 2 percent of the concessional loans annually.

At the same place, the Chairman of EDTL, E.P, Paulo da Silva said that the projects would be implemented once all the preparation process was completed.

“This project would be implemented in 90 days as ADB will prepare for the recruitment and all the process of provisioning. This project includes training and capacity building for the staff members of the EDTL, focusing on the control of the automation of power distribution system,” he said.

He said the modernization of the power distribution system would guarantee the quality of the emergency intervention during a power outage, as well as better the control of the energy use.

EDTL was established through Decree-Law 29/2020 with the main objective to improve the services of the energy distribution across the national territory.

Through the loan agreement of US$35 million, the government planned to make an institutional transformation in the energy sector without relying on the General State Budget (GSB).

Currently, the commercial energy use in the country is over 50 percent; therefore, the government had planned to make a fundamental change in the energy sector.


Journalist: Antónia Gusmão

Editor: Julia Chatarina

Translation: Filomeno Martins

Editor: Nelia Borges Rosario


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