Koror -- Despite broad support from Palau congressmen, the Council of Chiefs, Governors and Speakers Association, the Senate rejected the much-touted power purchase agreement with Engie EPS.
In a 10 no and 1 yes vote, the Senate did not support the deal stating that it is “not convinced that this PPA is the best deal for Palau.”
Congress's support is needed to grant Engie a sovereign guaranty to discharge the liability to the government in case of payment default that could burden the citizens into paying the cost in the event of a default.
In an earlier statement, President Tommy Remengesau said the 30-year agreement would bring down the price of electricity and accomplish the renewable energy target the country set in the wake of the Paris Climate Agreement. Under the rejected agreement, the company would also shoulder all the entire cost of the construction of the project.
By 2025, Palau aims to achieve 45 percent renewable energy target, as well as a 22 percent reduction in its energy sector emissions below 2005 levels.