Micronesia, Federated States of: Yap Renewable Energy Development Project

Sovereign Project | 44469-013 Status: Active

Summary

ADB is helping the Federated States of Micronesia increase renewable energy and improve power generation efficiency in the state of Yap to reduce dependency on imported diesel. The project will develop grid-connected wind and solar power plants. It will improve the efficiency of diesel-fed power generation and build up the capacity of state-owned utility, Yap State Public Service Commission.

Latest Project Documents

Consulting Notices See also: CMS

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Procurement Notices See also: Operational Procurement

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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 Active
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 Yap Renewable Energy Development Project (Project) supports development of the power system in State of Yap (Yap), Federated States of Micronesia (FSM) in order to reduce dependency on imported diesel 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 nearly entirely dependent on imported diesel for power generation on the main island (Yap Proper). Power generation is supplied by Yap State Public Service Corporation (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 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). 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, while reduction in generation costs is needed to moderate the impact on YSPSC's customers. 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 supporting (i) development of grid-connected wind power generation (originally about 1.5MW, but now revised down to 875kW) 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 modernized integration and control system appropriately-sized diesel generators 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 project is in line with the (i) ADB''s country operations business plan for FSM, which prioritizes energy as a key area of support, and (ii) FSM''s energy policies that set 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 --The Mission met with YSPSC-PMU at the Mid-term Review Mission in November 2015.
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)

--Not yet due.

--Under preparation.

--Not yet due.

--Not yet due.

--Yes. DSC contract was concluded 29 April 2014.

-- In progress - part of DSC contract.

Geographical Location

Safeguard Categories

Environment B
Involuntary Resettlement B
Indigenous Peoples C

Summary of Environmental and Social Aspects

Environmental Aspects The project has been classified as category B for environment following ADB's Safeguard Policy Statement. An initial environmental examination has been prepared for the project. The main potential impacts identified include (i) noise from the wind turbines, (ii) impacts on flora and fauna during construction of the wind farm, and (iii) soil erosion during ocnstruction of the wind farm. A heritage survey was conducted at the proposed wind farm site, and sites to be avoided during construction were specified. Adequate mitigation measures were incorporated into the environmental mangement plan as part of the intial environmental examination. The plan will be included in the wind farm construction mcontract. A climate change adaptation risk evaluation was conducted and will be incorporated in infrastructure detail design.
Involuntary Resettlement

The project has been classified as category B for involuntary resettlement and category C for indigenous peoples following ADB's

Safeguard Policy Statement. The project does not involve physical displacement of people or structures. There will be no impact on distinct and vulnerable indigenous peoples. The wind farm to be built on Kabul and Madeqdeq ridges, however, requires acquisition of 7.5 hectares of land. A resettlement plan has been prepared. YSPSC will update and finalize the plan during project implementation after detailed design and survey of the wind farm. YSPSC will coordinate with the state government, the Division of Land Resources, and other relevant government and nongovernment agencies to implement and monitor the land acquisition and compensation

activities.

Indigenous Peoples Safeguard documents have been endorsed by the Yap State Government, disclosed to affected persons and local stakeholders, and posted on ADB's website. The project will support capacity within YSPSC to manage safeguard aspects through international and national environment, and social safeguard specialists who will be working within the PMU. They will organize and conduct trainings on safeguards and other necessary skills to the relevant staff of YSPSC, the Division of Land Resources, and other agencies that will be involved in the project's safeguard activities.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation The PMU will prepare a stakeholder communication strategy and submit to ADB for review by the end of Month 3 after loan effectiveness. All communication will be in language suitable for the specific audience and will follow the ADB Public Communication Policy. The stakeholder strategy will incorporate the following componenets: (i) compilation of stakeholder communication activities already undertaken; (ii) role of Project Steering Committee in coordinating and communication with relevant Government stakeholders; (iii) public communication plan for disseminating information regarding project development to the public who may be impacted by the proposed projects; and (iv) project landowner consultation activities.

Responsible Staff

Responsible ADB Officer James Trainor
Responsible ADB Department Pacific Department
Responsible ADB Division Transport, Energy and Natural Resources Division, PARD
Executing Agencies
Yap State Public Service Corporation
P.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 06 May 2016

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 3.00 0.00 64%
Counterpart 2.12 Cumulative Disbursements
Cofinancing 0.00 20 Jun 2013 0.80 0.00 17%

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 2.97 0.00 74%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 20 Jun 2013 0.29 0.00 7%
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

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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