Nauru : Institutional Strengthening of the Nauru Utilities Corporation

Sovereign Project | 47352-001

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 Details

Project Name Institutional Strengthening of the Nauru Utilities Corporation
Project Number 47352-001
Country / Economy Nauru
Project Status Closed
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 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 The consultants have submitted draft final report containing recommendations. Several steps have been already institutionalized to improve capacity and streamlining operational issues. The ongoing Nauru Electricity supply security and sustainability project is monitoring implementation and sustainability of recommendations of the report.
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)

The consutlants have submitted the draft final report and is being reviewed by ADB. Each consultant has incorporated findings and recommendation for the way forward. The implementation of those recommendations will be monitored.

Consultants' final report is expected to be submitted by April 2016.
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 Consultation with stakeholders including Ministry of Finance, NUC, Nauru phosphate Corporation, Government of Australia, High commissioner of Taiwan during TA implementation were duly carried out by the consultants and by ADB during review missions.
Business Opportunities
Procurement Consulting services
Responsible ADB Officer Indrawansa, P.P.G.P.P.
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Liaison and Coordination Office in Sydney, Australia (PLCO)
Executing Agencies
Asian Development Bank
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 01 Apr 2014
Last Review Mission -
Last PDS Update 30 Mar 2016

TA 8631-NAU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
01 Apr 2014 - 01 Apr 2014 31 Mar 2016 - 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 17 Jun 2022 182,824.37

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Tenders

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Contracts Awarded

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Procurement Plan

None currently available.