With support from ANZ Pacific, the Sustainable Energy Financing Project will help rural communities in PNG, the Solomon Islands, Vanuatu, Fiji and the Republic of the Marshall Islands access low cost, long-term finance to buy electricity from renewable sources at a fraction of the cost they are now paying for diesel.

The project will also allow communities to buy equipment such as solar photovoltaic units, pico-hydro units and coconut oil tanks, using low cost five-year loans provided through ANZ Pacific.

"This project has the potential to bring cheap, reliable electricity so that Pacific Islanders can have light at night, listen to the radio, run a small refrigerator and at the same time, use power sources that are environmentally sound and sustainable," said World Bank country director for Papua New Guinea, Timor-Leste and the Pacific Nigel Roberts.

International Finance Corporation director for East Asia and Pacific Richard Ranken added that the project would encourage sustainable development through the private sector and help to break down some of the common barriers to obtaining finance in small or remote communities.

The successful Teachers' Solar Lighting Project in PNG, which was initially set up to provide financing for 2500 teachers, will continue under the new project. There are now more than 9000 teachers on the project's waiting list and the cost of purchasing a solar kit has been cut in half from 4200 kina ($US1424) to K2100.

The Sustainable Energy Financing Project will be run over 10 years and will be jointly implemented by the World Bank and the IFC through their Sydney offices.

The World Bank will take primary responsibility for Fiji, PNG and the Solomons while the IFC will take responsibility for the Marshall Islands and Vanuatu.