Micronesia, Federated States of: Yap Renewable Energy Development Project

Sovereign Project | 44469-013

Summary

The proposed Yap Renewable Energy Development Project (Project) will support development of the power system in State of Yap (Yap), Federated States of Micronesia (FSM) in order to reduce dependency on imported diesel. This will be achieved through expansion of renewable power generation and improving the supply side efficiencies of power delivery.

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Procurement Documents


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Project Name Yap Renewable Energy Development Project
Project Number 44469-013
Country Micronesia, Federated States of
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3004-FSM: Yap Renewable Energy Development Project
Ordinary capital resources US$ 4.68 million
Loan 3005-FSM: Yap Renewable Energy Development Project
Asian Development Fund US$ 4.36 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change
Sector / Subsector

Energy - Conventional energy generation - Renewable energy generation - solar - Renewable energy generation - wind

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The proposed Yap Renewable Energy Development Project (Project) will support development of the power system in State of Yap (Yap), Federated States of Micronesia (FSM) in order to reduce dependency on imported diesel. This will be achieved through expansion of renewable power generation and improving the supply side efficiencies of power delivery.
Project Rationale and Linkage to Country/Regional Strategy

Yap (population 11,400) is one of four states within FSM (population 107,000). Yap State is 100% dependent on imported diesel for power generation on the main island (Yap Proper). Power generation is supplied by Yap State Public Service Commission (YSPSC) which is a 100% state owned corporatized utility. Approximately 65% of the population lives on the main island (Yap Proper), while the remainder lives on the outer islands. There is a single power grid on Yap Proper with an installed capacity of 8.3MW (peak load 2.4MW) and about 1,500 residential customers. Access to electricity is high on Yap Proper (estimated 97%). Each state in FSM has a separate utility corporation with separate tariff structures. Due to remoteness and high diesel transportation costs, power tariffs are high and the Yap economy is highly vulnerable to fuel price shocks. In 2010 average power tariff was $0.45/kWh (generation cost $0.32/kWh), however this is anticipated to rise in 2011 due to escalating diesel prices. Power tariffs allow for full cost recovery for YSPSC, however tariff reform is required to ensure YSPSC can continue to operate on a sustainable basis. In Yap, about half of all imported fuel is used for power generation. In 2005 and 2006, the value of diesel imported to Yap for power generation exceeded the total value of exports. In 2008, diesel imported for power generation represented 17.6% of all imports by value to Yap.

The power supply in Yap is relatively stable, with adequate capacity, however oversized diesel generators have resulted in low generation efficiencies. Due to low terrain and small catchments, Yap does not have potential for hydropower, however initial assessments indicate financially viable wind and solar resources . There is currently no wind power generation in Yap, however there are a number of community solar power mini-grids established in the outer islands which are managed by YSPSC. While household consumption is low due to predominance of traditional buildings, power usage by Government offices is relatively high . Through improved supply side energy efficiency and conversion to renewable energy under the Project, it is estimated that Yap can convert 28% of power generation to renewable energy and reduce diesel consumption for power generation by 32%. The Project is proposing to support (i) development of grid-connected wind power generation (about 1.5MW) on Yap Proper, (ii) development of grid-connected solar power (about 0.3MW) on Yap Proper, (iii) improved generation efficiencies of the existing diesel generation through a smaller diesel generator to be operated during low demand periods, and (iv) capacity building within YSPSC, through targeted training and development of required systems, tentatively to include procurement, financial management, fiduciary controls, asset management and system operation management.

The proposed project is in line with the (i) ADB's country operations business plan (COBP) 2011-2013 for FSM, which prioritizes energy as a key area of support, and (ii) FSM's draft National Energy Policy, 2010, which includes the draft Yap State Energy Action Plan. The draft National Energy Policy sets a national renewable energy generation target of 30% by 2020. All components of the Project are listed in the Yap State Energy Action Plan as priority activities.

Impact Energy security of Yap has improved
Project Outcome
Description of Outcome YSPSC supplies an increased amount of clean and renewable energy to Yap
Progress Toward Outcome --
Implementation Progress
Description of Project Outputs

1. YSPSC installs wind power generation

2. YSPSC expands solar power generation

3. YSPSC improves efficiencies of diesel power generation

4. Efficient project management services

Status of Implementation Progress (Outputs, Activities, and Issues)

Invitations for bid for wind, solar, diesel, and integration packages were issued in December 2014. IFB for Solar Equipment; and IFP for Integration and Control, and Wind Turbines had been extended up to 5 Feb 2015. IFB for Diesel has been extended up to 5 March 2015.

Design and supervision consultants are engaged and providing project management services.

Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer J. Michael Trainor
Responsible ADB Department Pacific Department
Responsible ADB Division Transport, Energy and Natural Resources Division, PARD
Executing Agencies
Yap State Public Service CorporationP.O. Box 667
Colonia, Yap 96943
Federated States of Micronesia
Timetable
Concept Clearance 13 May 2011
Fact Finding 21 Jan 2012 to 04 Feb 2012
MRM 10 Apr 2012
Approval 20 Jun 2013
Last Review Mission -
Last PDS Update 18 Feb 2015

Loan 3004-FSM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
20 Jun 2013 24 Jun 2013 26 Nov 2013 31 Dec 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 6.80 Cumulative Contract Awards
ADB 4.68 20 Jun 2013 0.82 0.00 18%
Counterpart 2.12 Cumulative Disbursements
Cofinancing 0.00 20 Jun 2013 0.33 0.00 7%

Loan 3005-FSM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
20 Jun 2013 24 Jun 2013 26 Nov 2013 31 Dec 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 4.36 Cumulative Contract Awards
ADB 4.36 20 Jun 2013 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 20 Jun 2013 0.00 0.00 0%
Title Document Type Document Date
Yap Renewable Energy Development Project: Procurement Plan Procurement Plans Jun 2015
Loan Agreement for Yap Renewable Energy Development Project Loan Agreement (Ordinary Resources) Jun 2013
Loan Agreement (Special Operations) for Yap Renewable Energy Development Project Loan Agreement (Special Operations) Jun 2013
Project Agreement for Yap Renewable Energy Development Project Project/Program Agreement Jun 2013
Guarantee Agreement for Yap Renewable Energy Development Project Guarantee Agreements Jun 2013
Yap Renewable Energy Development Project Reports and Recommendations of the President May 2013
Yap Renewable Energy Development Project Project/Program Administration Manual May 2013
Yap Renewable Energy Development Project Gender Action Plans May 2013

Evaluation Documents

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