Regions and Countries

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p. 4 of 5 BACK | NEXT I. Country Strategy II. Current Development Trends and Issues III. Implementation of the Country Strategy and Program IV. Portfolio Management Issues V. Country Performance and Lending Level

Country Strategy and Program Update 2003-2005: Kiribati

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III. Portofolio Management Issues

A. Portfolio Performance

26. Since joining ADB in 1974, Kiribati has received six loans totaling US$15.14 million and 30 TAs totaling US$9.5 million, of which one loan of US$9.2 million and five TAs of US$3.21 million were active at the end of 2001. The only active loan in Kiribati is at risk (para. 28). In 2001, the contract awards ratio reached only 5.4% compared with the ADB-wide average of 14.9%. Actual contract awards totaled US$0.3 million or 23.1% of the projection in 2001 compared with 127% of the projection for 2002. In 2001, the disbursement ratio was 16.9% compared with the ADB-wide average of 20.5%. Actual disbursement was US$1.4 million or 95% of the projection in 2001, compared with 178% of the projection for 2000. All active TAs were performing satisfactorily. Kiribati’s portfolio performance indicators are found in Appendix 2, Tables A2.6 and A2.7, respectively.

27. Two loans, for the Betio Shipyard Rehabilitation and Tarawa Power Projects, have been postevaluated.³³ In particular, the ADB postevaluation mission for the Tarawa Power Project emphasized how the project’s sustainability depended on PUB’s ability to provide efficient and cost-effective service, which hinged on its institutional framework and its capacity to deal effectively with the operational and management problems of a growing utility company. This issue is still a concern and will be addressed under the proposed TA for strengthening the operation and management capacity of PUB. The ongoing portfolio includes one lending and five nonlending assistance activities–one preparatory, and four institutional development TAs.

28. Lending Project. After a slow start, the SAPHE Project has recently made significant progress. The project management office and the project implementation units have been established, and they are generally working well. The main construction contract was signed in May 2002, and work will begin in about 2 months. A few issues remain, mainly related to the need to access additional water sources and protect water reserves, firm up the water and sewerage connection policy, and further strengthen PUB.³⁴

29. Project Preparatory Assistance. The project preparatory TA for the OIDP is proceeding satisfactorily. It has enabled the discussion of possible policy reforms that could be required to facilitate the outer island development, including (i) delegation of responsibility and financial resources, (ii) improved governance structure of the island councils and the responsible ministries, (iii) commercialization of key services to the islands (e.g., transport and communication), and (iv) facilitation of the development of commercial activities (e.g., aquaculture). The main issue is the rather dysfunctional state of local government in the outer islands, with widespread community dissatisfaction with the island councils, particularly over the way they are perceived to frustrate the communities’ development aspirations.

30. Institutional Development Assistance.³⁵ These advisory TAs are proceeding satisfactorily. The main issue is the limited absorptive capacity of the country and the

B. Performance Monitoring and Evaluation

31. ADB review missions and the ADB-financed institutional development assistance on poverty reduction strategies are assisting the Government in monitoring portfolio performance as well as the achievement of objectives specified in the CSPU, the NDS, and the budget. Furthermore, the TA is strengthening MFEP’s economic and financial capacity, and is continuing to help the Government improve its resource allocation processes and procedures.

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