Timor-Leste: Power Distribution Modernization Project

Sovereign Project | 49177-002

The project will (i) support the modernization of the power distribution system to contribute to the sustainability, resiliency, and reliability of the electricity system; and (ii) provide institutional strengthening and capacity building to the implementing agency, Electricidade De Timor-Leste (EDTL). It is aligned with the following Sustainable Development Goals (SDGs): SDG 7 on access to affordable, reliable, sustainable, and modern energy for all, and SDG 13 on urgent action to combat climate change and its impacts. The project will support EDTL improve the power supply infrastructure in Timor-Leste.

Project Details

  • Project Officer
    Miller, Daniel
    Southeast Asia Department
    Request for information
  • Country/Economy
    Timor-Leste
  • Modality
    • Loan
    • Technical Assistance
  • Sector
    • Energy
Project Name Power Distribution Modernization Project
Project Number 49177-002
Country / Economy Timor-Leste
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 4132-TIM: Power Distribution Modernization Project
Ordinary capital resources US$ 35.00 million
TA 6813-TIM: Capacity Building of Electricidade de Timor-Leste in Distribution Network Operation and Maintenance
Technical Assistance Special Fund US$ 750,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Energy / Electricity transmission and distribution

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The project will (i) support the modernization of the power distribution system to contribute to the sustainability, resiliency, and reliability of the electricity system; and (ii) provide institutional strengthening and capacity building to the implementing agency, Electricidade De Timor-Leste (EDTL). It is aligned with the following Sustainable Development Goals (SDGs): SDG 7 on access to affordable, reliable, sustainable, and modern energy for all, and SDG 13 on urgent action to combat climate change and its impacts. The project will support EDTL improve the power supply infrastructure in Timor-Leste.
Project Rationale and Linkage to Country/Regional Strategy

The principal weaknesses in the power sector are the high cost of generation, inefficient distribution, low level of revenue generation, ongoing need for substantial fiscal subsidies, and excessive technical and non-technical network losses. These problems are, to some extent, the result of other weaknesses in the institutional, legal and regulatory environment, namely the absence of proper commercial practices within EDTL and poor implementation of the legal and regulatory frameworks for the sector.

Substantial challenges remain beyond the high cost of diesel generation. Roughly 60% of generated electricity is not billed to customers. Network losses are high, and the installation of meters has not kept pace with new connections. Substantial investment needs also remain, especially at the distribution level (20 kV and lower voltages) to extend service to populations that still lack access to modern energy services. The government's Strategic Development Plan 2011-2030 (SDP) target for 100% electrification by 2015 has not been met, which implies the need for additional investment in new distribution assets. Existing legacy networks also need investment in modernization and replacement of ageing assets. This is a particularly acute need in Dili and Baucau, where networks are several decades old and service interruptions are frequent.

To sustain progress in the sector and promote expanded economic opportunity throughout Timor-Leste, EDTL must begin to operate on a more commercial basis: the government currently subsidizes roughly 85% of operating costs in the sector (over $100 million per year). The amount of subsidy required will grow unless technical and non-technical losses decline and generation costs can be reduced. The government also recognizes that the solution may lie in changes to the institutional, legal and regulatory arrangements in the sector. EDTL remains a department within the Ministry of Public Works, Transport, and Communications (MPWTC) and has never operated on a commercial basis. It lacks the human capacity and business systems and processes to operate efficiently and cope with the myriad operational and developmental challenges it faces.

Addressing the sector's identified shortcomings and facilitating its sustained development will require further targeted investments in EDTL's distribution assets to reduce physical and commercial losses, improve service quality, and improve financial performance of EDTL as a commercial enterprise. Investments are also required to provide for: (i) expansion of service coverage to population not currently served by formal network electricity service; (ii) lowering the cost of power generation through public and private investments in fuel-switching and development of Timor-Leste's renewable energy resources; and (iii) the introduction of new management systems and practices, and new commercial and contractual arrangements within EDTL.

Impact Access to reliable electricity supply enhanced (Timor-Leste Strategic Development Plan, 2011-2030)
Project Outcome
Description of Outcome Power supply reliability and financial performance of EDTL improved.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Service delivery to end users strengthened

Distribution network upgraded and regional offices constructed and/or rehabilitated to green standards

Institutional and community capacity for electrical safety and operations strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Miller, Daniel
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Council for Administration of the Infrastructure Fund
Palacio do Governo,Ministry of Finance
Edificio 5, 1 Andar Dili, Timor-Leste
Timetable
Concept Clearance 29 Jan 2016
Fact Finding 09 Dec 2020 to 17 Dec 2020
MRM 21 May 2021
Approval 26 Oct 2021
Last Review Mission -
Last PDS Update 26 Oct 2021

Loan 4132-TIM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Oct 2021 20 Dec 2021 17 Mar 2022 30 Jun 2027 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 50.00 Cumulative Contract Awards
ADB 35.00 01 Apr 2022 0.00 0.00 0%
Counterpart 15.00 Cumulative Disbursements
Cofinancing 0.00 01 Apr 2022 0.00 0.00 0%

TA 6813-TIM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Oct 2021 11 Nov 2021 11 Nov 2021 31 Dec 2024 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
750,000.00 0.00 0.00 0.00 0.00 0.00 750,000.00 01 Apr 2022 5,485.50

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
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.

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Tenders

Tender Title Type Status Posting Date Deadline
Power System Planning Specialist Individual - Consulting Closed 05 Apr 2022 11 Apr 2022
Project Supervision Consultants (PSC) of Power Distribution Modernization Project Firm - Consulting Closed 10 Mar 2022 22 Apr 2022
Senior Energy Advisor/Team Leader Individual - Consulting Closed 09 Nov 2021 15 Nov 2021
Project Supervision Consultants Firm - Consulting Closed 08 Nov 2021 07 Dec 2021

Contracts Awarded

No contracts awarded for this project were found


Procurement Plan