The Federated States of Micronesia wants to reduce carbon emissions by 500 tonnes annually, saving half a million US dollars each year in diesel costs by using renewable energy.
FSM is to access a four million dollar allocation from the Pacific Environment Community Fund, or PEC Fund, to supplement electricity generation through the use of solar power.
The PEC Fund is administered by the Pacific Islands Forum Secretariat with the money from Japan.
The project will see each of the FSM states install solar photovoltaic systems capable of producing 150 kilowatts.
The project should contribute an additional 1.7 percent to the national renewable energy target of 30% energy from renewable energy sources by 2020.