Palau : North Pacific Regional Connectivity Investment Project

Sovereign Project | 46382-001

The North Pacific Regional Connectivity Investment Project is included in the Country Operations Business Plan: Palau, 2014-2016 which was approved by Management on 21 October 2013. The total project cost is estimated at $45.0 million equivalent. ADB will finance $22.5 million comprising $13.97 million from ADB's ordinary capital resources and $8.53 million from Asian Development Funds resources. It does not include a separate project preparatory technical assistance. Therefore, project preparatory activities will be divided between ADB and the World Bank. ADB activities include economic, social, and safeguards assessments and will be covered by TA 8257-REG: Results-Based Strategy and Sector Planning in the Pacific with allocated budget of $325,000 and PARD Staff Consultant inputs.

Flickr photos from the 46382-001: North Pacific Regional Connectivity Investment Project in Palau album.

Project Details

  • Project Officer
    Thomason, Kenneth C.
    Sectors Group
    Request for information
  • Country/Economy
    Palau
  • Sector
    • Information and communication technology
Project Name North Pacific Regional Connectivity Investment Project
Project Number 46382-001
Country / Economy Palau
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3346-PAL: North Pacific Regional Connectivity Investment Project
Ordinary capital resources US$ 16.47 million
Loan 3347-PAL: North Pacific Regional Connectivity Investment Project
Asian Development Fund US$ 8.53 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector

Information and communication technology / ICT infrastructure

Gender No gender elements
Description The North Pacific Regional Connectivity Investment Project is included in the Country Operations Business Plan: Palau, 2014-2016 which was approved by Management on 21 October 2013. The total project cost is estimated at $45.0 million equivalent. ADB will finance $22.5 million comprising $13.97 million from ADB's ordinary capital resources and $8.53 million from Asian Development Funds resources. It does not include a separate project preparatory technical assistance. Therefore, project preparatory activities will be divided between ADB and the World Bank. ADB activities include economic, social, and safeguards assessments and will be covered by TA 8257-REG: Results-Based Strategy and Sector Planning in the Pacific with allocated budget of $325,000 and PARD Staff Consultant inputs.
Project Rationale and Linkage to Country/Regional Strategy

The Republic of Palau has requested Asian Development Bank (ADB) to support a submarine internet cable project. Palau and the Federated States of Micronesia (FSM) have jointly initiated the project to establish broadband internet connectivity to Palau and Yap State, FSM by connecting to the major cable hub of Guam. Both countries have agreed to share the cost of the cable equally. The World Bank has agreed to provide support to FSM for the project. The proposed project will follow the World Bank technical assistance to FSM and Palau to strengthen the regulatory environment of the information and communication technology (ICT) sector.

Palau is an island nation of the Micronesian group of islands in the northern Pacific with a population of roughly 20,000. Palau receives substantial assistance from the United States through the Compact of Free Association. Palau's economy is highly reliant on tourism and services, with tourism accounting for more than 20% of gross domestic product (GDP) and services representing 77%. In FY2013, GDP growth was estimated at 0.2% owing to a sharp decline in tourist arrivals and construction, demonstrating Palau's vulnerability to external shocks. The International Monetary Fund (IMF) has identified economic diversification and private sector development as the key elements required for Palau to increase growth and thus protect its economy from such shocks.

The ICT sector is widely recognized as an enabler of economic growth, social stability and development. Analysis has demonstrated that increased access to ICT, particularly broadband internet services, helps to deliver improved social services such as health and education, as well as banking among others. It brings efficiency and reduces the cost of such services and in turn enables an environment conducive to private sector investments. Moreover ICT sector itself has created significant employment opportunities in many Asian countries.

At present, Palau relies entirely on geo-stationary satellite links for internet connectivity. The high cost and limited international bandwidth restricts internet penetration. Moreover, the technical limitations of capacity and the delay associated with such satellites based connectivity severely limit the quality of the service. As an interim solution Palau and FSM telecom providers have separately contracted for a five-year 150 megabit (MB) per second service from a medium earth orbit satellite broadband service starting end-2014. Once the submarine cable system is operational the satellite system will complement the more reliable cable system providing back-up in case of an interruption.

The proposed project will connect Palau and Yap to the international cable hub at Guam by fiber-optic submarine cable. It will provide a plentiful capacity of higher quality broadband internet at much lower cost to Palau and so make it accessible and affordable to the broader population. The cable with a capacity of multiple terabit per second will more than meet the broadband capacity needs of Palau for the foreseeable future.

The project is expected to enable delivery of improved public services (including online government services, health, and education), strengthen resilience to disasters through improved monitoring and response capabilities, and support regional integration objectives of improved service delivery (in banking, tourism etc.) and trade and communications between Pacific island economies. The lower communication cost will create opportunities for the private sector.

The proposed project is consistent with ADB's country operations business plan 2014-2016 for Palau and Palau's medium-term development strategy, 2009-2014. Prioritized goals of the country operations business plan and Palau's strategy are to: (i) facilitate private sector development, and (ii) improve public sector effectiveness.

Impact

Access to affordable ICT infrastructure has been achieved in Palau

Project Outcome
Description of Outcome

Decrease in cost and increase in quality of internet service.

Progress Toward Outcome The project has already achieved its goal to provide quality internet service at an affordable price. The retail price has come down significantly with huge jump in the demand. Further improvement of the service is expected as price comes down further as demand grows.
Implementation Progress
Description of Project Outputs

A submarine cable system connecting Palau to the international internet cable hub in Guam established.

Status of Implementation Progress (Outputs, Activities, and Issues) IRU contract was signed in 2017.The system became operational in end of 2017.BSCC has established standard operating procedure and is fine tuning it as and when needed. BSCC is implementing additional access points to maintain high availability. BSCC engaged Globe Telecom of Philippines for network operation center (NOC) and Docomo Pacific of Guam to provide customer service center.
Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects No private land acquisition was required. BSCC employed an independent safeguards monitoring consultant to ensure that the preparation, design, construction, implementation, operation, and decommissioning of the Project and all its facilities comply with all applicable laws and regulations of the Borrower relating to environment, health, and safety; the environmental safeguards, and all measures and requirements set forth in the IEE, the EMP and any corrective or preventive actions in the Safeguards Monitoring Report. All bids are compliant with safeguards and environmental plan. All safeguards reports have been uploaded.
Involuntary Resettlement There was no need for land acquisition.
Indigenous Peoples The project does not have a potential impact on indigenous peoples.
Stakeholder Communication, Participation, and Consultation
During Project Design Initial stakeholders were the Office of the President's FSM Telecommunications Corporation, Department of Transport and Communication, telecom operators in Palau.
During Project Implementation Palau FSM Telecommunications Corporation, Department of Transport and Communication, telecom operators in Palau.
Business Opportunities
Consulting Services An interim project manager was hired during the early start of the project while the consulting firm contract was being recruited. A consulting firm to act as the project PMU was finally engaged in May 2016.
Procurement All goods and civil works have already been awarded and completed, with only three contracts remaining expected to be completed in Q4 2023.
Responsible ADB Officer Thomason, Kenneth C.
Responsible ADB Department Sectors Group
Responsible ADB Division Transport Sector Office (SG-TRA)
Executing Agencies
Ministry of Finance
Timetable
Concept Clearance 13 Aug 2014
Fact Finding 18 Feb 2015 to 27 Feb 2015
MRM 07 Oct 2015
Approval 07 Dec 2015
Last Review Mission -
Last PDS Update 09 Mar 2023

Loan 3346-PAL

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
07 Dec 2015 07 Mar 2016 08 Mar 2016 30 Sep 2018 31 Mar 2025 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 16.47 Cumulative Contract Awards
ADB 16.47 11 Apr 2024 16.03 0.00 97%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 11 Apr 2024 15.82 0.00 96%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory Satisfactory Unsatisfactory Unsatisfactory

Loan 3347-PAL

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
07 Dec 2015 07 Mar 2016 08 Mar 2016 30 Sep 2018 31 Mar 2025 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 13.72 Cumulative Contract Awards
ADB 8.53 11 Apr 2024 7.99 0.00 96%
Counterpart 5.19 Cumulative Disbursements
Cofinancing 0.00 11 Apr 2024 8.18 0.00 98%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory Satisfactory Unsatisfactory Unsatisfactory

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
North Pacific Regional Connectivity Investment Project: Audited Project Financial Statements (Ocotber 2021-September 2022) Audited Project Financial Statements Mar 2023
North Pacific Regional Connectivity Investment Project: Audited Project Financial Statements (October 2020-September 2021) Audited Project Financial Statements Mar 2022
North Pacific Regional Connectivity Investment Project: Audited Project Financial Statements (October 2019-September 2020) Audited Project Financial Statements Apr 2021
North Pacific Regional Connectivity Investment Project: Proactive Integrity Review Proactive Integrity Reviews (PIR) Mar 2021
North Pacific Regional Connectivity Investment Project: Audited Project Financial Statements (September 2018-September 2019) Audited Project Financial Statements Sep 2020
North Pacific Regional Connectivity Investment Project: Audited Project Financial Statements (October 2017-September 2018) Audited Project Financial Statements Oct 2019
North Pacific Regional Connectivity Investment Project: Audited Project Financial Statements (October 2016-September 2017) Audited Project Financial Statements Jul 2018
North Pacific Regional Connectivity Investment Project: Audited Project Financial Statements (October 2015-September 2016) Audited Project Financial Statements Jul 2017
Amendment to the Loan Agreement (Special Operations) for Loan 3347-PAL: North Pacific Regional Connectivity Investment Project Loan Agreement (Special Operations) Feb 2017
Amendment to the Loan Agreement (Ordinary Operations) for Loan 3346-PAL: North Pacific Regional Connectivity Investment Project Loan Agreement (Ordinary Resources) Feb 2017
North Pacific Regional Connectivity Investment Project: Procurement Plan Procurement Plans Nov 2016
Amendment to the Loan Agreement (Special Operations) for Loan 3347-PAL: North Pacific Regional Connectivity Investment Project Loan Agreement (Special Operations) Nov 2016
Project Agreement for Loans 3346 and 3347-PAL: North Pacific Regional Connectivity Investment Project Project/Program Agreements Mar 2016
Loan Agreement (Special Operations) for Loan 3347-PAL: North Pacific Regional Connectivity Investment Project Loan Agreement (Special Operations) Mar 2016
Loan Agreement (Ordinary Operations) for Loan 3346-PAL: North Pacific Regional Connectivity Investment Project Loan Agreement (Ordinary Resources) Mar 2016
North Pacific Regional Connectivity Investment Project: Project Administration Manual Project/Program Administration Manual Nov 2015
North Pacific Regional Connectivity Investment Project: Report and Recommendation of the President Reports and Recommendations of the President Nov 2015
North Pacific Regional Connectivity Investment Project: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Nov 2014

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 Access to Information Policy (AIP) 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.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Loan No. 3346/3347-PAL: North Pacific Regional Connectivity Investment Project [BSCC 01/18] Invitation for Bids Closed

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Ngaremlengui Civil Works Loan 3346 10 Jan 2017 Flexenclosure Ab | Eriksbergsgatan 10, S-114, 30 Stockholm, Sweden Ministry of Finance 299,910.00 197,640.69
Cable Landing Station for North Pacific Regional I Investment Connectivity Project Loan 3346 27 Feb 2017 Surangel and Sons Construction Company | Po Box 295 Koror, Palau 96940 Palau Ministry of Finance 163,803.00 107,946.18
Ngaremlegui Civil Works Loan 3347 10 Jan 2017 Flexenclosure Ab | Eriksbergsgatan 10, S-114, 30 Stockholm, Sweden Ministry of Finance 299,910.00 102,269.31
Design, Supply, Erection, Testing and Commissioning of Madunaghat-Kalurghat 132KV Double Circuit and Reconductoring of Existing Comilla-Chandpurpb2L2 Loan 3347 27 Feb 2017 Surangel and Sons Construction Company | Po Box 295 Koror, Palau 96940 Palau Ministry of Finance 163,803.00 55,856.82

Procurement Plan

Title Document Type Document Date
North Pacific Regional Connectivity Investment Project: Procurement Plan Procurement Plans Nov 2016