Asian Development Bank Ies: 98032 Impact Evaluation Study of Bank Assistance to the Power Sector in the Pacific Developing Member Countries

ABBREVIATIONS ADB – Asian Development Bank AR – Appraisal Report AusAID – Australian Agency for International Development EIRR – Economic Internal rate of return EPC – Electric Power Corporation of Samoa EU – European Union FEA – Fiji Electricity Authority FIRR – Financial Internal rate of return GDP – Gross domestic product IES – Impact Evaluation Study KAJUR – Kwajalein Atoll Joint Utility Resources MIS – Management information system MHS – Monasavu storage hydroelectric scheme NGO – Nongovernment organization PCR – Project Completion Report PDMCs – Pacific Developing Member Countries PPAR – Project Performance Audit Report PUB – Public Utilities Board PV – Photovoltaic RETA – Regional technical assistance SEC – Solar Energy Company SIEA – Solomon Islands Electricity Authority TA – Technical assistance TEPB – Tonga Electric Power Board UNELCO – Union Electrique du Vanuatu Limited US – United States of America MEASURES GWh – gigawatt-hour HV – high voltage km – kilometer kV – kilovolt KWh – kilowatt-hour m – meter MW – megawatt Postevaluation Office, IE–58 EXECUTIVE SUMMARY The Bank's strategy in the power sector in the Pacific in the past focused on financing plant and equipment but with increasing attention given to organization and management issues with a view to commercialization of operations. This report reviews the past performance, effectiveness, and impact of Bank assistance to the power sector in five Pacific Developing Member Countries (PDMCs) where the Bank has been active (Fiji, Kiribati, Samoa, Solomon Islands, and Tonga). It discusses the need and directions for future Bank involvement in the sector, and identifies issues and lessons that might be applied to a framework for future external assistance to the power sector in the Pacific. Bank lending to the PDMCs' power sector covers 15 loans from 1972 to date. It totals $75 million, of which about $40 million was approved more than ten years ago. Almost all lending in the early period was to Fiji. Since 1987, lending has been to Kiribati, Samoa, Solomon Islands, and (most recently) Tonga for capacity expansion projects, i.e., expanding generation capacity, strengthening existing distribution systems, and extending distribution into new areas. Typically, increases in capacity have been relatively large compared with the existing capacity, for a shortage of affordable electricity was perceived as a prime constraint to development in the PDMCs. Sixteen advisory technical assistance grants totaling $2.75 million were provided during this period for planning and institutional capacity building. …