URA issues new guidelines for Independent Power Producers and Power Purchase Agreements
September 17, 2026 10:44 pm | Posted in Business News | Share now TwitterFacebook
Private companies seeking to supply renewable electricity to Vanuatu’s power utilities will now face a new licensing and approval framework under guidelines released by the Utilities Regulatory Authority (URA).
URA released its new Regulatory Guidelines for Independent Power Producers (IPPs) and Power Purchase Agreements (PPAs) on September 4, 2026, setting out a clear framework for licensing, regulating and integrating renewable energy projects into Vanuatu’s electricity networks.
The guideline follows the transfer of administrative responsibility for the Electricity Supply Act [CAP. 65] to the URA in May 2026 and reflects recent legislative amendments that strengthen the Authority’s role in overseeing IPPs, PPAs and electricity sector development.
The framework is designed to support private sector investment in renewable energy while ensuring consumers continue to receive safe, reliable and affordable electricity services.
It sets out licensing procedures, technical and financial assessment requirements, standard PPA provisions and monitoring mechanisms for IPP projects.
Renewable energy developers seeking to sell electricity to concessionaires will be required to obtain an IPP licence from the URA and comply with financial, technical, legal and safety requirements.
The Authority will assess applications within 60 working days and facilitate the establishment of PPAs between successful applicants and the relevant utilities within six months.
A key feature of the framework is the requirement for proposed projects to satisfy the principle of Least Cost Generation, ensuring that wholesale power supplied under a PPA provides value to consumers and does not exceed the fuel cost to generate.
The guideline also provides for the benefits of lower-cost renewable generation to be reflected in customer tariffs over time.
It introduces standardised PPA requirements and a model PPA template to provide greater certainty for investors, utilities, financiers and development partners.
The framework also establishes regulatory oversight for transmission arrangements, annual licence renewals, compliance monitoring and dispute resolution.
It applies to all existing electricity concession areas, including Efate, Luganville, Tanna and Malekula, as well as any future electricity concession areas throughout Vanuatu.
Existing PPAs will remain in effect under their current contractual arrangements and will transition to the new framework upon renewal or expiry of the relevant agreements.
URA said the new framework would support the expansion of renewable energy, strengthen investor confidence and contribute to Vanuatu’s long-term sustainable energy objectives while safeguarding electricity consumers. A copy of the IPP/PPA Guideline is available on the URA website at www.ura.gov.vu
