Nauru: Institutional Strengthening of the Nauru Utilities Corporation

Sovereign Project | 47352-001

Summary

ADB assistance will support the NUC in the following activities: (i) developing and implementing an asset management and maintenance plan; (ii) improving accounting systems through integration of the asset registry and the financial management information system; (iii) implementing performance management systems for lower level NUC staff; and (iv) reviewing the corporate governance of the organization.

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Project Name Institutional Strengthening of the Nauru Utilities Corporation
Project Number 47352-001
Country Nauru
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8631-NAU: Institutional Strengthening of the Nauru Utilities Corporation
Technical Assistance Special Fund US$ 225,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector Energy - Energy sector development and institutional reform
Gender Equity and Mainstreaming No gender elements
Description ADB assistance will support the NUC in the following activities: (i) developing and implementing an asset management and maintenance plan; (ii) improving accounting systems through integration of the asset registry and the financial management information system; (iii) implementing performance management systems for lower level NUC staff; and (iv) reviewing the corporate governance of the organization.
Project Rationale and Linkage to Country/Regional Strategy

*Despite significant progress, a number of weaknesses in the performance of NUC remain. NUC has no preventative maintenance plans, and as a result maintenance is carried out on an emergency or ad hoc basis. The NUC also lacks procedures for capital expenditure planning and procurement planning. NUC depends on imported diesel fuel for almost all power generation. Tariffs are the lowest in the Pacific and do not cover diesel fuel cost. The utility therefore depends on a fuel subsidy from the government. Unclear compensation policies and worker classifications result in inefficient allocation of compensation at the NUC.

*While an asset inventory was introduced under TA-7873, additional improvements are required to the accounting system, in particular through integration of the fixed assets register and the financial management information system fixed asset management module which has recently been acquired for the NUC. There is also a lack of management autonomy, despite corporatization. Despite the NUC's newly streamlined governance structure, it is still subject to ministerial oversight and requires cabinet approval for borrowing, acquisition and disposal of property, rather than being accountable to an independent board of directors.

Impact Reduced drain on the fiscal position of the government
Project Outcome
Description of Outcome Improved financial, operational and governance performance of the NUC
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

NUC implements asset management and maintenance plan

NUC implements improved accounting systems through integration of the asset registry and the financial management information system

NUC implements Performance Management System for lower level NUC staff

NUC implements revised corporate governance structure

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design We consulted with government ministries and the Nauru Utilities Corporation (NUC), development partners including the Government of Australia, the European Union, and the private sector and stateown enterprises including the Republic of Nauru Phosphate Corporation, Nauru Rehabilitation Corporation and Eigigu Holdings, as well as Capelle & Partners, and Meridien Holdings. Civil society groups consulted include the Nauru Island Association of NGOs.
During Project Implementation Ongoing consultation with stakeholders during TA implementation and review missions.
Business Opportunities
Procurement Consulting services
Responsible ADB Officer Milovan Lucich
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Liaison and Coordination Office in Sydney, Australia
Executing Agencies
Asian Development Bank6 ADB Avenue, Mandaluyong
Metro Manila, Philippines
P.O. Box 789, 1099 Manila,
Philippines
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 01 Apr 2014
Last Review Mission -
Last PDS Update 10 Apr 2014

TA 8631-NAU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
01 Apr 2014 - 01 Apr 2014 31 Mar 2016 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
225,000.00 0.00 75,000.00 0.00 0.00 0.00 300,000.00 01 Apr 2014 174,846.37

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