fbpx 46382-001: North Pacific Regional Connectivity Investment Project | Asian Development Bank

Palau: North Pacific Regional Connectivity Investment Project

Sovereign (Public) Project | 46382-001 Status: Active

The Asian Development Bank is working with Palau to provide people, businesses and government agencies with affordable, high-quality internet access. The project is helping to build a submarine cable system linking Palau to the internet cable hub in Guam.

Project Details

Project Officer
Sibesh Bhattacharya Pacific Department Request for information
Country
  • Palau
Sector
  • Information and communication technology
 
Project Name North Pacific Regional Connectivity Investment Project
Project Number 46382-001
Country 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
concessional ordinary capital resources lending / 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 Equity and Mainstreaming 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 internet service.
Progress Toward Outcome Contract awards are $12,119,209 (74%) and $6,336,185.65 (75), while disbursements are $12,358,888.64 (75%) and $6,375,109.76 (76%), respectively, against an overall elapsed project period of 98%. Project rating for both loans is 90% on track and complied and/or satisfactory in all five performance indicators: (i) Technical, (ii) Contract Award, (iii) Disbursement, (iv) Financial Management, and (v) Safeguards
Implementation Progress
Description of Project Outputs An efficient and effective submarine cable system connecting Palau to the international internet established.
Status of Implementation Progress (Outputs, Activities, and Issues) The cable was extended to a location near the Palau airport as part of a minor change in scope approved by ADB last July 2017 supporting the need for an adequate and resilient capacity _Fiber Optic Cable Extension_ between the cable landing point (Ngaremlengui) and Airai (CAP-A). To ensure completion of this work, project was extended from 30 September 2018 to 31 December 2020.
Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects ADB will provide technical assistance through existing and planned regional TAs to support an environmental and social safeguards assessment.
Involuntary Resettlement Although no major issues are anticipated, the preparatory work will identify any potential land acquisition and resettlement due to landing station construction for the proposed project.
Indigenous Peoples The proposed project does not have a potential impact on indigenous peoples.
Stakeholder Communication, Participation, and Consultation
During Project Design Initial stakeholders include the Palau (Office of the President FSM (Department of Transport and Communication), telecom operators in Palau.
During Project Implementation Palau (Office of the President FSM (Department of Transport and Communication), and telecom operators in Palau
Business Opportunities
Consulting Services The project preparation will require ten person-months of staff time for missions and office-based works. In addition, the preparatory and supportive capacity building activities covered by ADB technical assistance will provide 20 person-months of international consultant inputs. Procurement of equipment or consulting services covered by ADB's loan or technical assistance will conform with ADB's Procurement Guidelines (March 2013, as amended from time to time) and ADB's Guidelines on the Use of Consultants by ADB and Its Borrowers (March 2013, as amended from time to time).
Procurement In Palau, the Ministry of Finance is the proposed executing agency for the project. Palau and FSM will establish a new Special Purpose Vehicle (SPV) to develop and operate the submarine cable system; it will also assume the role of implementing agency (IA). The SPV will handle all procurement and financial management. The IA would be funded by the Governments of FSM and Palau on a 50% cost sharing arrangement. Cofinancing arrangements between ADB and the World Bank, including procurement packages for works and goods and consulting services, will be detailed in the project design and described in the Project Administration Manual. Procurement of equipment or consulting services covered by ADB's loan or technical assistance will conform with ADB's Procurement Guidelines (March 2013, as amended from time to time) and ADB's Guidelines on the Use of Consultants by ADB and Its Borrowers (March 2013, as amended from time to time).
Responsible ADB Officer Sibesh Bhattacharya
Responsible ADB Department Pacific Department
Responsible ADB Division PATC
Executing Agencies
Ministry of Finance
3rd Floor, Executive Bldg, ROP Capitol
Ngerulmud, Melekeok State,P.O. Box 6011
Koror, PW 96940, Republic of Palau
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 28 Sep 2018

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 Dec 2021 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 16.47 Cumulative Contract Awards
ADB 16.47 07 Dec 2015 13.09 0.00 79%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 07 Dec 2015 12.76 0.00 78%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - -

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 Dec 2021 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 13.72 Cumulative Contract Awards
ADB 8.53 07 Dec 2015 6.84 0.00 82%
Counterpart 5.19 Cumulative Disbursements
Cofinancing 0.00 07 Dec 2015 6.61 0.00 79%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - -

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 (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
Amendment to the Loan Agreement (Special Operations) for Loan 3347-PAL: North Pacific Regional Connectivity Investment Project Loan Agreement (Special Operations) Nov 2016
North Pacific Regional Connectivity Investment Project: Procurement Plan Procurement Plans Nov 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
Project Agreement for Loans 3346 and 3347-PAL: North Pacific Regional Connectivity Investment Project Project/Program Agreements 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 22 May 2018 16 Jul 2018

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
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 Construction 163,803.00 107,946.18
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 Construction 163,803.00 55,856.82
Ngaremlengui Civil Works Loan 3346 10 Jan 2017 Flexenclosure Ab Eriksbergsgatan 10, S-114, 30 Stockholm, Sweden Ministry of Finance Construction 299,910.00 197,640.69
Ngaremlegui Civil Works Loan 3347 10 Jan 2017 Flexenclosure Ab Eriksbergsgatan 10, S-114, 30 Stockholm, Sweden Ministry of Finance Construction 299,910.00 102,269.31

Procurement Plan