The Asian Development Bank and Vanuatu have signed an agreement for a $US15.1 million project to increase the availability of renewable energy on Malekula and Espiritu Santo.
The loan and grant agreement is for the Vanuatu Energy Access Project.
The bank's James Lynch said the project would deliver an increased supply of clean, renewable electricity to households in Malekula and Espiritu Santo and have a positive effect on rural livelihoods.
About 75 percent of Vanuatu's population lives in rural areas and have limited access to electricity nationwide, with the electrification rate at just 33 per cent.
Where electricity is available, it is mostly generated from diesel and other fossil fuels.