The project readiness financing (PRF) grant will prepare the ensuing project - Chuuk Water Supply and Sanitation Project (CWSSP) and facilitate a transition to a smooth project implementation. It will help streamline the initial contract awards and expedite the disbursements. The PRF will finance consulting firms and individual consultants, as well as the equipment, to achieve three outputs: (i) creating an enabling environment for the ensuing investment project of CWSSP; (ii) identifying the investment scope, preparing the project readiness, and procuring key project components; and (iii) developing a smooth transition to implementation by strengthening CPUC's water supply operations.
|Project Name||Preparing the Chuuk Water Supply and Sanitation Project|
|Country||Micronesia, Federated States of
|Project Type / Modality of Assistance||Grant
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Gender Equity and Mainstreaming
Governance and capacity development
Private sector development
|Sector / Subsector||
Water and other urban infrastructure and services / Urban policy, institutional and capacity development - Urban sewerage - Urban water supply
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
|Description||The project readiness financing (PRF) grant will prepare the ensuing project - Chuuk Water Supply and Sanitation Project (CWSSP) and facilitate a transition to a smooth project implementation. It will help streamline the initial contract awards and expedite the disbursements. The PRF will finance consulting firms and individual consultants, as well as the equipment, to achieve three outputs: (i) creating an enabling environment for the ensuing investment project of CWSSP; (ii) identifying the investment scope, preparing the project readiness, and procuring key project components; and (iii) developing a smooth transition to implementation by strengthening CPUC's water supply operations. The PRF aligns with the ADB's Strategy 2030 operational priorities to: (i) address remaining poverty and reducing inequalities (OP1); (ii) tackle climate change, building climate and disaster resilience, and enhance environmental sustainability (OP3); (iii) make cities more livable (OP4); and (iv) strengthen governance and institutional capacity (OP6). The PRF is included in ADB's COBP 2020-2022.|
|Project Rationale and Linkage to Country/Regional Strategy||
1. The latest official statistics for the Federated States of Micronesia (FSM) estimated the total national population was about 103,000, of which 47% resided in the capital area of Chuuk State. Weno is the main urban center with about 14,000 population (about 30% of Chuuk's population) and has an area of 127 square kilometers. The Chuuk State's population is projected to increase to 50,000 by 2025 with most of the growth in Weno and Tonoas islands.
2. The FSM is highly vulnerable to natural hazards, particularly severe tropical storms and droughts, and is highly susceptible to climate change impacts. In 2015, Typhoon Maysak struck the states of Chuuk and Yap, causing four deaths and damaging houses, crops, and public infrastructure. About a third of the national population was affected, and the damage cost is estimated at 4% of the country's 2015 gross domestic product. Chuuk State experienced two major droughts during 2016-2019, which resulted in Weno's surface water sources drying up and stressing groundwater resources. Climate change projections show that temperatures will continue to rise in the FSM, as will the sea level and ocean acidification. The intensity and frequency of days of extreme rainfall are projected to increase, which exacerbates the need for infrastructure that is resilient to climate change and natural disasters.
3. In Chuuk State, access to public water supplies is limited. Only 8% of households obtain drinking water from the public water supply systems which are provided by the Chuuk Public Utility Corporation (CPUC). The majority households rely on rainwater tanks (69%) as the source of drinking water. Other household water sources include wells and springs (19%), and bottled water and streams (5%). Rainwater harvesting is not secure due to the seasonal rainfall patterns and more frequent and severe dry periods as a result of climate change. The CPUC water production is 2,900 cubic meters per day in which 95% is from deep wells and 5% from the Pou River. CPUC filters the water abstracted from the Pou River and chlorinates all the water produced. The Pou River headworks and treatment plant constructed in 1982 are dilapidated and require rehabilitation. CPUC has identified another potential surface water source in the Wichen River, which would expand its water supply, reduce the reliance on groundwater, and substantially cut pumping costs. However, the development of the new water source requires adequate funding.
4. In Chuuk State, public sanitation service is also limited. The Weno sewerage system commissioned in 1973 serves about 400 households in the northern and western side of Weno Island. Parts of the sewerage network and the sewage pumping stations are dilapidated and requires rehabilitation. CPUC has made continuous improvements of the Weno sewerage system since 2015 together with the Weno road upgrading program. However, substantial investment is required to expand coverage of the sewer network and to rehabilitate the dilapidated parts of the sewer system. Beyond the island's sewerage network area, septic tanks and pit toilets are widely used, particularly among poor communities. Septic tank and pit toilets discharge effluent directly into the shallow aquifers that underlie the island, becoming a major contributor to groundwater contamination and individual household wells. Consequently, diarrhea, particularly among infants is endemic.
5. CPUC is mandated under the Chuuk Public Utility Corporation Act of 2006 to deliver electricity, water supply, and sewerage services to the people in Chuuk State. CPUC's performance has been improved significantly after the institutional reforms began in 2010 financed by the Asian Development Bank (ADB) and the United States Department of Interior. CPUC fully recovered its operation and maintenance, depreciation, and debt servicing cost in fiscal year 2019 with revenue generated from utility service tariffs. However, further institutional reforms of CPUC's framework for water supply and sewerage tariffs are still needed as CPUC's water supply and sewerage services are relatively underperforming and are dependent on cross-subsidies from CPUC electricity sales.
6. CPUC's such underperformance on water supply and sewerage services is largely due to the high rate of nonrevenue water (NRW) in CPUC's water operations. CPUC delivers water services to 480 households in Weno. However, in early 2019, a detailed CPUC survey in one of the water supply zones in Weno indicated that the actual number of households connected to the CPUC water supply system was substantially higher than the CPUC records showed. This large number of undocumented consumers to the CPUC water supply network explains the high NRW in CPUC's water operations, estimated over 50%, and substantially reduces its water supply revenue. CPUC recognizes that reduction of NRW is essential to enable it to collect water supply and sewerage revenue, which will then allow CPUC to expand its water supply and sewerage customer base. To reduce NRW, CPUC plans to: (i) strengthen both its demand management capacity to optimize its water supply network operations and eliminate undocumented connections; and (ii) strengthen its water leak detection capacity to identify physical losses from the pipe network.
7. The FSM government has proposed the Chuuk Water Supply and Sanitation Project (CWSSP). The project will improve CPUC's utility operation and customer management, expand CPUC's water supply services, reduce NRW, and increase revenue from water supply and sewerage services. CPUC's sewage system on Weno will also be expanded and rehabilitated. A project will also provide educational activities that promote good sanitation and hygiene practices that help prevent water and sanitation related disease and foster water conservation and increase willingness to pay for water and sanitation services.
|Description of Outcome|
|Progress Toward Outcome|
|Description of Project Outputs|
|Status of Implementation Progress (Outputs, Activities, and Issues)|
|Geographical Location||Nation-wide, Chuuk Islands|
|Summary of Environmental and Social Aspects|
|Environmental Aspects||Not categorized as activities limited to preparing the ensuing investment project and activities are limited to consulting services. The ensuing project is expected to be Category B for environment.|
|Involuntary Resettlement||Not categorized as activities limited to preparing the ensuing investment project and activities are limited to consulting services. The ensuing project is expected to be Category B for involuntary resettlement.|
|Indigenous Peoples||Not categorized as activities limited to preparing the ensuing investment project and activities are limited to consulting services. The ensuing project is expected to be Category C for indigenous peoples.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||The grant will design the project and will involve extensive stakeholder participation.|
|During Project Implementation|
|Responsible ADB Officer||Blaik, Stephen|
|Responsible ADB Department||Pacific Department|
|Responsible ADB Division||PAUW|
Department of Finance and Administration
Federated States of Micronesia
|Fact Finding||04 Apr 2019 to 05 Apr 2019|
|Approval||10 Dec 2019|
|Last Review Mission||-|
|Last PDS Update||03 Jan 2020|
|Approval||Signing Date||Effectivity Date||Closing|
|10 Dec 2019||13 Dec 2019||-||30 Jun 2023||-||-|
|Financing Plan||Grant Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||5.43||Cumulative Contract Awards|
|ADB||5.00||10 Dec 2019||0.00||0.00||0%|
|Cofinancing||0.00||10 Dec 2019||0.00||0.00||0%|
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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|Title||Document Type||Document Date|
|Grant Agreement (Special Operations) for Grant 6026-FSM: Preparing the Chuuk Water Supply and Sanitation Project||Grant Agreement||Dec 2019|
|Project Agreement (Special Operations) for Grant 6026-FSM: Preparing the Chuuk Water Supply and Sanitation Project||Project/Program Agreements||Dec 2019|
|Preparing the Chuuk Water Supply and Sanitation Project: Project Readiness Financing Report||Project Readiness Financing Report||Dec 2019|
|Preparing the Chuuk Water Supply and Sanitation Project: Project Administration Manual||Project/Program Administration Manual||Nov 2019|
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.
None currently available.
Evaluation Documents See also: Independent Evaluation
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|Tender Title||Type||Status||Posting Date||Deadline|
|Project Preparation Assistance – Phase 1||Firm - Consulting||Closed||29 Nov 2019||09 Jan 2020|
No contracts awarded for this project were found
None currently available.