Renewable energy projects across the Pacific Islands are set to receive a $635 million boost after an agreement was reached today.
The funding package was secured at the Pacific Energy Summit in Auckland, but falls short of the $800 million that Pacific leaders were hoping to get.
The money will go towards projects to enable Pacific nations to ditch their reliance on fossil fuels, which are expensive to ship to the islands.
Pacific countries spend 10% of their GDP on diesel to generate electricity, and, on average, a quarter of the region's import bill is spent on diesel.
ONE News Pacific Correspondent Barbara Dreaver said the funding will be "so important for the islands".
Regional leaders arrived in Auckland this week for the summit in a bid to drum up support for cheaper, cleaner, forms of energy.
Today Foreign Affairs Minister Murray McCully announced an agreement had been reached.
Partners and donors agreed to commit $255 million in grant funding and $380 million in concessional loans to support over 40 of the 79 proposed projects.
Investors include co-hosts New Zealand and the European Union, Australia, the Asian Development Bank, the European Investment Bank, the Japan International Cooperation Agency, the World Bank Group, and the United Arab Emirates.
"Clean and efficient modern energy services are the cornerstone of sustainable development, economic activity and poverty reduction," McCully said in a statement.
"Currently, the Pacific region meets around 80% of its electricity generation needs from expensive imported fossil fuels. Yet the region has abundant renewable energy resources, including hydropower, solar, wind, biomass and geothermal.
"Investment projects featured by Pacific Island countries at the summit would help many of them increase their power generation from renewable resources to close to 50% of total supply."
He said he expects to see action within the next three to four years.
Andris Piebalgs, EU development commissioner, said the EU welcomed the opportunity to form innovative partnerships, particularly with the energy sector.
"Investing in global renewable energy reflects the needs of our modern world. Working with our partner countries in the Pacific, the EU is committed to catalyse real change quickly, bringing citizens and business together to provide security, sustainability and prosperity," Piebalgs said.
McCully also announced $65 million of New Zealand funding to assist Pacific Island countries to realise their renewable energy and energy efficiency plans. Support was announced for the Cook Islands, Kiribati, Papua New Guinea, Samoa, Tonga and Tuvalu.
Dreaver said $10 million of this money will go towards wind and solar farms.
"By the end of 2020 we're expecting them to be completely off diesel, using renewable energy," she said.
"In Kiribas a third of the country doesn't even have power, so we are actually giving them something that they don't have.
"Government's will be able to put the money they (currently) spend on diesel into things like education and health."