IFC Advances Utility-Scale Solar Project in Timor-Leste
- Han Hui Tan
- Mar 24
- 2 min read
Image source: Voltake
Timor-Leste is progressing with plans to develop its first large-scale solar power project, supported by the International Finance Corporation (IFC), as part of a broader effort to diversify its energy mix and reduce reliance on diesel generation.
The proposed project marks a significant step in the country’s transition toward renewable energy and is expected to play a key role in improving power reliability and lowering long-term electricity costs.
Project Overview
The project under consideration involves the development of a utility-scale solar photovoltaic (PV) plant with integrated battery energy storage, with an estimated capacity of:
Approximately 90MW of solar generation
Around 80MWh of battery storage
The combined system is designed to provide stable and dispatchable power, addressing the intermittency challenges typically associated with solar energy.
The total investment value is estimated at over USD 100 million, making it one of the largest renewable energy projects currently being explored in Timor-Leste.
Role of IFC
The IFC, a member of the World Bank Group, is acting as a transaction advisor and development partner for the project.
Its involvement includes:
Structuring the project under an Independent Power Producer (IPP) model
Supporting procurement and tender processes
Assisting in attracting international developers and investors
Ensuring alignment with international environmental and financial standards
The participation of IFC is generally viewed as a signal of increased institutional confidence in Timor-Leste’s energy sector.
Energy Sector Context
Timor-Leste’s power system remains heavily dependent on diesel generation, which accounts for the vast majority of installed capacity.
While electrification rates have improved significantly in recent years, the system continues to face:
High generation costs due to imported fuel
Supply reliability challenges
Exposure to global fuel price volatility
The introduction of large-scale solar, combined with battery storage, is expected to help address these structural issues by reducing fuel dependency and stabilizing the grid.
Implementation Model
The project is expected to be developed under a public-private partnership framework, with private sector participation through the IPP structure.
Key elements include:
Long-term power purchase agreement (PPA) with the national utility
Competitive bidding process for project developers
Integration with ongoing grid modernization efforts
Battery storage will play a central role in ensuring system stability, particularly in a grid environment with limited flexibility and reserve capacity.
Economic and Operational Impact
If implemented, the project is expected to:
Reduce diesel consumption for power generation
Lower the overall cost of electricity over time
Improve supply reliability
Support the country’s renewable energy targets
It may also contribute to local capacity building and create opportunities across engineering, construction, and operations.
For investors and companies exploring opportunities in Timor-Leste’s energy sector, D&T Advisory provides market entry support, strategic insights, and on-the-ground execution assistance.
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