Regions and Countries

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p. 5 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 Assistance Levels

Country Strategy and Program Update 2004-2006: Samoa

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V. Country Performance and Assistance Levels

A. Lending Level Proposed

25. The indicative baseline rolling 3-year lending allocation for Samoa is $15 million for 2004-2006, based on country performance indicators, per capita income, and population. The proposed firm lending program for Samoa for the period is $15 million, complemented by a standby loan for $3 million in 2006.

26. As a result of its good performance in macroeconomic management, financial sector liberalization, and public service reforms, Samoa has achieved a high level of sustainable economic growth and human development. However, a number of issues require further attention, particularly human development, basic social infrastructure and services, and private sector development. The achievement of all eight MDGs should be a top priority.

27. The key parameters determining the level of concessional Asian Development Fund (ADF) assistance will include progress in poverty reduction, macroeconomic and structural reforms, private sector development, and portfolio management. Accordingly, three lending scenarios have been defined. The base case allocation is $15 million in 2004-2006; lower case, $12 million; and upper case, $18 million. The lending scenario and trigger assessment are in Appendix 2.

28. For 2004-2006 three firm loans have been programmed in education, renewable energy, and sanitation and drainage, at an average of $5 million per year, and based on the base case (Appendix 3). A standby allocation of $3 million has also been programmed for 2006, consistent with the high-case scenario, if required to help the Government mobilize and securitize customary land. However, the lending program for 2006 is based on the assumption that the Savaii renewable energy project can be cofinanced. Otherwise, if ADB finances the entire projected project cost ($10 million), a lending break would have to be considered for 2006 to comply with the ADF allocation ceiling for the program cycle. Lending levels will be monitored closely and regularly adjusted to reflect the country’s performance indicators and absorptive capacity.

29. Depending on ADF resource availability in 2004, the ADF lending program will need to be reviewed, and then revisited and confirmed during the country program confirmation mission. The 2005 and 2006 ADF lending programs will depend on the outcome of the discussions regarding ADF replenishment.

B. Nonlending Program

30. Nonlending assistance for 2004-2006 focuses on all three pillars of the ADB strategy. In 2004, the nonlending program will help improve living standards by building capacity for youth development; studying options for land mobilization and securitization; and enhancing SOE corporate governance. In 2005, TA will prepare the proposed loan for sanitation and drainage; provide advisory support to the proposed renewable energy project in Savaii; and, if required, prepare a loan to securitize land leases. More support for land-related reforms has been allocated in 2006. While the indicative level of core resources for grant-funded TA for Samoa is $800,000 per year, ADB will continue to provide additional channel funding wherever appropriate. The nonlending program is in Appendix 4.

C. Summary of Changes to Lending and Nonlending Program

31. The most significant change to the proposed program of assistance to Samoa is a proposed loan for wastewater and sanitation in 2006, as well as a standby facility to securitize land leases in 2006. A new TA on SOE corporate governance has been added to the 2004 nonlending program, and two new TAs in support of land mobilization and securitization have been added to the 2005 and 2006 nonlending programs.

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