Project Name State-Owned Enterprise Rationalization Program
Project Number 43413-012
Country Vanuatu
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7588-VAN: State-Owned Enterprise Rationalization Program
Japan Fund for Poverty Reduction US$ 500,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector

Public sector management - Economic affairs management

Gender Equity and Mainstreaming No gender elements

The TA aims to strengthening the legal, governance, and monitoring frameworks for SOEs. This work will include (i) drafting an SOE act; (ii) establishing a robust process for the selection, appointment, and accountability of directors; (iii) strengthening the capacity of the SOE directors to execute their mandates; (iv) establishing a framework for contracting and financing CSOs; and (v) clarifying the role and responsibilities of the monitoring agency within MFEM. The recent restructuring of MFEM provides an opportunity to strengthen its SOE monitoring function, and this will be an integral component of the TA.

While the legal, governance, and monitoring reforms are being developed, a parallel effort to update SOE financial accounts will be undertaken, so that those that represent the greatest strain on the budget can be rapidly identified. The outputs of this work will also facilitate the development of necessary baseline indicators for assessing the performance of the TA.

Project Rationale and Linkage to Country/Regional Strategy State-owned enterprise reform is an integral part of the approach to supporting private sector development in ADB's 2010-2014 Country Partnership Strategy (CPS) for Vanuatu, which was approved in September 2009. The Government's commitment to SOE reform is also contained within the recently-released "Planning Long, Acting Short" matrix of policy priorities for 2009-2012. It is central to the improved economic governance supported through AusAID's Governance for Growth Program (GfG), and the recently signed Partnership for Development (PfD) between the Governments of Australia and Vanuatu.
Impact Reduced drain on the fiscal position of the government from underperforming public enterprises

Project Outcome

Description of Outcome Improved financial, operational and governance performance of SOEs
Progress Toward Outcome Support the development and implementation of an SOE reform program in Vanuatu to relieve the fiscal strain that SOEs place on the state budget and ensure that SOEs do not compromise consumer welfare or crowd out the private sector.
Implementation Progress
Description of Project Outputs

1. Rationalization strategies formulated and under implementation for at least four SOEs, along with associated governance and regulatory reforms

2. Draft SOE act prepared

3. At least six training courses on SOE governance and monitoring delivered for SOE directors and Ministry of Finance staff

4. Director performance evaluation system developed and implemented

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

Supported MFEM to prepare the liquidation of four SOEs in the country: Asset Management Unit (AMU), Metensel Estates Limited (MEL), Vanuatu Livestock Development Limited (VLDL), and the Vanuatu Agricultural Development Bank (VADB).

An SOE policy was endorsed by Council of Ministers (COM) in October 2013.

A new SOE Act has been drafted.

Training courses on SOE governance and monitoring are being delivered.

A director performance evaluation system has been developed.

Geographical Location National (Vanuatu)

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design The TA has been designed in close consultation with Ministry of Finance and Economic Management (MFEM) and key stakeholders, including the SOEs, line ministries, Prime Ministers Office, State Law Office, and development partners.
During Project Implementation During the project implementation, the project team will continue consulting with MFEM, SOEs, line ministries, Prime Minister's office, State Law Office, and development partners. In addition, the team will also develop individual SOE rationalization plans for the SOEs, as agreed jointly with the Directorate of Finance.

Business Opportunities

Consulting Services Consultant recruitment is underway.

Responsible Staff

Responsible ADB Officer Everett, Hayden B.
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Liaison and Coordination Office in Sydney, Australia
Executing Agencies
Ministry of Finance & Economic Management
P.M.B. 058
Port Vila


Concept Clearance 31 Mar 2010
Fact Finding 12 Apr 2010 to 16 Apr 2010
Approval 01 Sep 2010
Last Review Mission -
PDS Creation Date 03 Jun 2010
Last PDS Update 26 Nov 2014

TA 7588-VAN

Approval Signing Date Effectivity Date Closing
Original Revised Actual
01 Sep 2010 01 Oct 2010 01 Oct 2010 30 Sep 2012 31 Dec 2014 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 500,000.00 100,000.00 0.00 0.00 0.00 600,000.00 01 Sep 2010 327,285.95

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