USTDA Supports Critical Energy Infrastructure in Tonga

Nuku'alofa, Tonga - The U.S. Trade and Development Agency (USTDA) is supporting dependable energy access in the Kingdom of Tonga through American-led upgrades to its fuel infrastructure. Today, USTDA signed an agreement to fund a feasibility study for Tonga's leading fuel supplier, Pacific Energy South West Pacific Limited (PESWP), to modernize the country's fuel transport and storage infrastructure to accommodate larger shipments from medium-range tankers. The study will also recommend policy changes to increase private sector investment in Tonga's fuel supply infrastructure. By enabling early U.S. participation in project development, USTDA's support will offer Tonga access to trusted U.S. expertise as it modernizes its energy sector.

"Reliable energy access is the foundation of a stable, growing economy," said Thomas R. Hardy, USTDA's Deputy Director. "This feasibility study will help chart a path toward greater fuel security for Tonga, open new export opportunities for U.S. companies, and contribute to a free and open Indo-Pacific."

USTDA's support will fund an assessment of three infrastructure options for enabling Tonga to receive medium-range fuel tankers directly, eliminating the need for costly transshipment through third countries, and increasing the nation's fuel storage capacity from 15-20 days to approximately 60 days of supply. The study will also prepare initial engineering designs for the recommended option and create a cost-effective model for transportation and storage in the outer islands. To attract greater private sector investment, USTDA's study will identify potential regulatory improvements to Tonga's fuel pricing framework. The project will create opportunities for U.S. firms to export engineering, construction and equipment services.

USTDA-funded programming is carried out by U.S. companies. Businesses interested in submitting proposals for the pre-feasibility study should visit: https://www.ustda.gov/work/bid-on-an-overseas-project.

Tonga, an archipelagic nation of roughly 100,000 people spread across more than 170 islands, imports 100 percent of its fuel, making it highly vulnerable to supply disruptions and price volatility. By enabling direct delivery via larger vessels, this project will reduce fuel costs and strengthen Tonga's ability to weather future disruptions.

"The project we are announcing today, with USTDA, is the most significant energy sector development in the Kingdom of Tonga for decades," said Stephane Cadel, Pacific Energy's CEO. "Pacific Energy is very pleased to be carrying out this project, which will significantly improve the security and resilience of Tonga's long term fuel supply. Reducing transport costs and increasing volumes will bring economies of scale and support long-term development benefits for people across the country. USTDA's involvement has been instrumental, as it has not only brought together all stakeholders - the Government of Tonga and the private sector - but will also help to structure the financing for the operation. The recognized expertise of US companies in the field of port and energy infrastructure is well established and clearly helps to mitigate technical risks and reassure investors regarding the reliability of their investment."

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The U.S. Trade and Development Agency is the U.S. government's first mover on critical infrastructure development in emerging markets, advancing the shared strategic priorities of the United States and our overseas partners while creating opportunities to deploy trusted U.S. solutions. USTDA funds the upfront technical work that accelerates the development of infrastructure projects, helping them attract the financing they need for implementation and procurement of U.S. goods and services.

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