Support for Energy Sector Regulatory Capacity and Electrification Investment Planning

Sovereign (Public) Project | 48049-001

The proposed TA will have two distinct components. First will be the development of capacity at the Department of Energy to cope with its expanded mandate to regulate the energy sector. The second component will focus on developing the planning capacity at DoE to identify and prioritize sector investments to provide for security of supply, increased renewable generation, and expansion of electricity service to currently unserved Fijians.

Project Details

  • Project Officer
    Trainor, James Michael
    Pacific Department
    Request for information
  • Country
    Fiji
  • Modality
    • Technical Assistance
  • Sector
    • Energy
Project Name Support for Energy Sector Regulatory Capacity and Electrification Investment Planning
Project Number 48049-001
Country Fiji
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8971-FIJ: Support for Energy Sector Regulatory Capacity and Electrification Investment Planning
Technical Assistance Special Fund US$ 1.00 million
TA 8971-FIJ: Support for Energy Sector Regulatory Capacity and Electrification Investment Planning (Supplementary)
Technical Assistance Special Fund US$ 200,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector

Energy / Energy sector development and institutional reform

Gender Equity and Mainstreaming No gender elements
Description

The proposed TA will have two distinct components. First will be the development of capacity at the Department of Energy to cope with its expanded mandate to regulate the energy sector. The second component will focus on developing the planning capacity at DoE to identify and prioritize sector investments to provide for security of supply, increased renewable generation, and expansion of electricity service to currently unserved Fijians.

The regulatory institutional capacity development component will identify and provide recommendations and consultancy support for: secondary legislation (implementing regulations) necessary for the establishment of the regulatory function within the Department of Energy (including drafting of proposed legislation and/or regulations); organizational structure, staffing profiles, skills and competence matrices, and training requirements; and material resource (e.g. budget) requirements for the newly-created regulatory unit within the Department of Energy. This component will be complemented by TA-sponsored training for key Department of Energy and other relevant Government of Fiji representatives in recognized international training programs on public utilities regulation (e.g. the Public Utility Research Center/World Bank International Training on Utility Regulation and Strategy)

The second component will equip the Department of Energy to develop an electrification master plan (EMP) by establishing the underlying policy framework and tools for identifying, prioritizing, selection, and implementation of discrete electricity expansion investments, i.e. the screening criteria for project identification and prioritization and the capacity to apply them. For the purposes of building this capacity and as a demonstration of the practical application of these tools, the TA will develop preliminary feasibility studies and project definitions for a limited number of candidate projects identified with the involvement of Department of Energy personnel.

Project Rationale and Linkage to Country/Regional Strategy

Regulatory oversight of the sector is weak. Tariffs are authorized by the Fiji Commerce Commission, but the manner in which prices are reviewed is not transparent and does not offer the long-term certainty and predictability that investors (private and state-owned corporatized FEA alike) require. Aside from rate-making authority residing with the Commerce Commission, FEA has operated as a self-regulating entity, retaining and administering licensing authority, developing and applying technical codes and standards, and defining rules and incentives for third-party generation.

The newly-announced National Energy Policy prescribes the transfer of significant sector regulatory authority from FEA to the Department of Energy (an arm of the Fiji Ministry of Transport, Works, and Public Utilities). Concurrently, the government has announced plans for the legal corporatization and partial divestiture of FEA, which will thereafter pursue a purely commercial agenda.

The lack of investment and limited regulatory oversight is exacerbated by the absence of any clear plans for development of the power sector. Without such plans, investors are not aware of opportunities and regulators cannot assess the reasonableness and efficiency of proposed investments and the tariff levels needed to deliver these.

The proposed TA responds to the government's request for ADB assistance to develop regulatory capacity and sector planning capacity within the Department of Energy.

Impact A resource efficient, cost effective, and environmentally sustainable energy sector (Roadmap for Democracy and Sustainable Socio-Economic Development 2010-2014*)
Project Outcome
Description of Outcome Improved framework for development of Fiji's energy sector
Progress Toward Outcome ongoing
Implementation Progress
Description of Project Outputs

Enhanced regulatory capacity at the Department of Energy

Enhanced sector planning capacity at Department of Energy.

1. Establishment of regulatory capacity at selected regulatory agency

2. Enhanced sector planning capacity at relevant government department

Status of Implementation Progress (Outputs, Activities, and Issues) The consulting firm conducted a hybrid system training for MOIT in Suva last 1 and 2 November 2017.
Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design The proposed TA has two distinct components: (i) regulatory institutional capacity development within the Department of Energy, and (ii) development of an electrification master plan.
During Project Implementation As of 17 September 2018, total contracts awarded amount to $991,723 (99.17%) and total disbursements is at $634,720 (63%) while total uncommitted funds is $8,277 (1%) . The TA has a current approved budget totaling $1,000,000 from ADB's TASF-Others. Supplemental financing from TASF-Others for $200,000 is required to support the FCCC for transitioning to a new role as power sector regulator under Electricity Act 2017 and preparation of a cost of service study for Energy Fiji Ltd (EFL). The additional resources will help achieve two key objectives: (i) extend the level of anticipated input of Castlerock Consulting Pte Ltd. (CCPL) per attached additional Terms of Reference (Attachment 2), and (ii) increase the TA allocation for business travel so that there is more flexibility to adequately synchronize in-country and home office inputs. A total of three (3) experts are anticipated to provide the services: (i) current CCPL team leader, (ii) electricity tariff specialist, and (iii) financial analyst. Activities funded through this additional financing are consistent with the TA's impact, outcomes, and outputs.
Business Opportunities
Consulting Services

An international regulatory expert (individual consultant) is recruited to advise the Government of Fiji on the establishment of a public utility regulatory agency to oversee regulation of the power sector (output 1) and prepare a capacity-building program.

A consulting firm for output 2 has been recruited and will be mobilized by 1 April 2017 to develop a policy framework and screening criteria to identify, prioritize, select, and implement discrete renewable generation and network investments.

Responsible ADB Officer Trainor, James Michael
Responsible ADB Department Pacific Department
Responsible ADB Division PAEN
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Timetable
Concept Clearance 08 Oct 2014
Fact Finding -
MRM -
Approval 29 Sep 2015
Last Review Mission -
Last PDS Update 28 Sep 2018

TA 8971-FIJ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Sep 2015 04 Feb 2016 04 Feb 2016 28 Sep 2017 31 Mar 2019 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,200,000.00 0.00 100,000.00 0.00 0.00 0.00 1,300,000.00 29 Sep 2015 1,135,074.38

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.

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Safeguard Documents See also: Safeguards

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None currently available.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tenders

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Contracts Awarded

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Procurement Plan

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