federated states of micronesia: renewable energy ... · 1. solar pv and mini-grid in kosrae...
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Project Number: 49450-023 Grant Number: xxxx November 2019
Federated States of Micronesia: Renewable Energy Development Project
Project Administration Manual
ABBREVIATIONS
ADB – Asian Development Bank ADF – Asian Development Fund BESS – battery energy storage system CAPEX – capital expenditures CPD – client portal disbursement DOFA – Department of Finance and Administration DORD – Department of Resources and Development EA – executing agency EMP EPC
– –
environment management plan engineering, procurement, and construction
FMA – financial management assessment FSM – Federated States of Micronesia IA – implementing agency IEE – initial environment examination KUA – Kosrae Utilities Authority PAM – project administration manual PIC PUC
– –
project implementation consultants Pohnpei Utilities Corporation
PMU – project management unit PV – photovoltaic QCBS – quality-cost-based selection RE – renewable energy REDP – renewable energy development project RFP – request for proposal RP – resettlement plan SHS – solar home system YSPSC kw kWh mw
– – – –
Yap State Public Service Corporation
WEIGHTS AND MEASURES kilowatt kilowatt hour megawatt
NOTES In this report, "$" refers to US dollars
CONTENTS
I. PROJECT DESCRIPTION 1 II. IMPLEMENTATION PLANS 3
A. Project Readiness Activities 3 B. Overall Project Implementation Plan 4
III. PROJECT MANAGEMENT ARRANGEMENTS 5
A. Project Implementation Organizations: Roles and Responsibilities 5 B. Key Persons Involved in Implementation 6
IV. COSTS AND FINANCING 9
A. Key Assumptions 9 A. Detailed Cost Estimates by Expenditure Category 10 B. Allocation and Withdrawal of Grant Proceeds 11 C. Detailed Cost Estimates by Financier 12 D. Detailed Cost Estimates by Outputs and/or Components 13 E. Detailed Cost Estimates by Year 14 F. Contract and Disbursement S-Curve 15 G. Fund Flow Diagram 16
V. FINANCIAL MANAGEMENT 17
A. Financial Management Assessment 17 B. Disbursement 17 C. Accounting 18 D. Auditing and Public Disclosure 18
VI. PROCUREMENT AND CONSULTING SERVICES 19
A. Procurement of Goods, Works, and Consulting Services 19 B. Procurement Plan 22 C. Consultant's Terms of Reference 24
VII. SAFEGUARDS 24 VIII. GENDER AND SOCIAL DIMENSIONS 25 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION 25
A. Design and Monitoring Framework 25 B. Monitoring 29
C. Evaluation 30 D. Reporting 31 E. Stakeholder Communication Strategy 31
X. ANTICORRUPTION POLICY 34
XI. ACCOUNTABILITY MECHANISM 34 XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL 34
APPENDIX Appendix 1 Project Implementation Consultants Outline Terms of Reference 36 Appendix 2 FSM National Project Coordinator Terms of Reference 44 Appendix 3 Supplemental Management and Operations Consultants Outline Terms 45 of Reference
Project Administration Manual Purpose and Process
1. The project administration manual (PAM) describes the essential administrative and
management requirements to implement the project on time, within budget, and in accordance with the policies and procedures of the government and Asian Development Bank (ADB). The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM.
2. The FSM Department of Finance and Administration (the executing agency) and the FSM Department of Resources and Development (as Chair of the Project Steering Committee and Implementing Agency) are wholly responsible for the implementation of ADB-financed projects, as agreed jointly between the Recipient and ADB, and in accordance with the policies and procedures of the government and ADB. ADB staff is responsible for supporting implementation including compliance by executing and implementing agencies of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.
3. At grant negotiations, the Recipient and ADB shall agree to the PAM and ensure consistency with the granta agreement. Such agreement shall be reflected in the minutes of the grant negotiations. In the event of any discrepancy or contradiction between the PAM and the grant agreement, the provisions of the grant agreement shall prevail.
4. After ADB President’s approval of the project's Facility Financing Proposal,b changes in implementation arrangements are subject to agreement and approval pursuant to relevant government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval, they will be subsequently incorporated in the PAM.
a The name of the operational financing document may vary on a project-to-project basis; this reference shall be deemed to encompass such variations, e.g., a Framework Financing Agreement, as applicable. b This project is being processed under the Pacific Regional Renewable Energy Investment Facility; approval authority for projects under this facility has been delegated to ADB’s President. The Facility Financing Proposal is the approval document, equivalent to a Report and Recommendation of the President to the Board.
I. PROJECT DESCRIPTION
1. The Federated States of Micronesia (FSM) Renewable Energy Development Project (REDP) will contribute to the implementation of FSM’s 2018 Energy Master Plan in Kosrae and Yap. The project will increase FSM’s energy security and reduce reliance on fossil fuels for power generation through investment in renewable energy generation. Project investments will include (i) solar photovoltaic (PV) and mini-grid investments for Kosrae Utilities Authority (KUA) in Kosrae, and (ii) PV and a battery energy storage system (BESS) for Yap State Public Services Corporation (YSPSC) in Yap. The scope of investments and estimated associated costs for each State are presented in Table 1. 2. The Impact is increased renewable energy generation in Yap and Kosrae in line with the National energy targets to achieve 30% renewable energy contribution in year 1 of operation for each state and increased access to electricity in Kosrae with the electrification of Walung Village. The outcome is increased generation and utilization of renewable energy in Yap and Kosrae. 3. The Project outputs are:
1. Solar PV and mini-grid in Kosrae installed
(i) 1.15 MWp solar photovoltaic installed in the Kosrae power system; (ii) Electrification of Walung Village, Kosrae with a hybrid solar (60 kWp), diesel (30
kW), battery (30 kW / 160 kWh) mini-grid, and solar home systems (2.5 kW/ 4 kWh); and
(iii) Capacity building in KUA.
2. Solar PV and Battery Energy Storage System (BESS) installed with system integration upgraded in Yap
(iv) 300 kW solar photovoltaic installed on Yap Sport Centre rooftops; (v) 1.950 MW ground mount solar photovoltaic array installed near YSPSC power
station; (vi) 800 kW / 800 kWh BESS installed at YSPSC power station; (vii) Upgrade of existing control system to integrate all components and successfully
operate the YSPSC power system; and (viii) Capacity building in YSPSC. 3. Pohnpei Utilities Corporation strengthened (ix) Institutional Strengthening for Pohnpei Utilities Corporation
4. Efficient Project Management delivered (x) Efficient Project Management.
4. Project Cost. The estimated Project cost is presented in Table 1.
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Table 1: Project Cost
Particulars Amount
KOSRAE
1-KUA Main Grid 3.69
2-Walung Mini-grid 100% Renewable Energy and Solar Home System 1.16
Total CAPEX 4.85
Total Import Taxes and Duties 0.20
Total Kosrae Project Budget 5.05
YAP
1-Battery Energy Storage System at power station (800 kw/ 800 kWh) 1.31
2-Ground mount solar photovoltaic array near power station 4.47
3-Rooftop solar photovoltaic extension at sports center 0.49
4-Upgrade to power station SCADA and controls 0.31
Total CAPEX 6.58
Total Import Taxes and Duties 0.26
Total Yap Project Budget 6.84
POHNPEI
1-Supplemental Management and Operations Consultants 0.74
Total Pohnpei Project Budget 0.74
FSM
1-Project Implementation Consultants 0.87
2-Project Management Unit Support 0.23
Total 1.10
Total Project Management Support Budget 1.10
Contingency* 1.78
TOTAL PROJECT COSTS 15.51 CAPEX=capital expenditure, KUA=Kosrae Utilities Authority, kw=kilowatt, kWh=kilowatt hour, SCADA=Supervisory Control and Data Acquisition. *13% of base cost estimate of $13.73 million, including $0.06 million in exemption of import taxes and duties. Source: Asian Development Bank.
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II. IMPLEMENTATION PLANS
A. Project Readiness Activities
Activities
Month
Responsible Agency July 2019
Aug 2019
Sep 2019
Oct 2019
Nov 2019
Dec 2019
Jan 2020
Advance contracting actions x x x x x x x DORD, ADB
ADB Review meeting x ADB
Grant negotiations x DOFA, ADB
ADB approval x ADB
FSM Approval x DOFA
Grant effectiveness x DOFA, ADB
ADB=Asian Development Bank, DOFA=Department of Finance and Administration, FSM=Federated States of Micronesia, KUA=Kosrae Utilities Authority, PUC=Pohnpei Utilities Corporation, YSPSC=Yap State Public Services Corporation. Source: Asian Development Bank.
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B. Overall Project Implementation Plan
Activities June 2019
July 2019
Aug 2019
Sep 2019
Oct 2019
Nov 2019
Dec 2019
Jan 2020
Feb 2020
ADVANCE PROCUREMENT ACTIVITIES
EPC Contract
Prepare bid documents x
ABD / FSM Approvals of Bid Docs x
Advertising period x
Bid submissions and opening x
Bid evaluation x
Review Bid evaluation report x
Select preferred bidder(s) x
Contract Negotiations x
Award EPC contract(s) x
PIC and SMO Contract
Prepare TOR for EOI x
Advertise EOI x
Shortlisting x
Request for Proposals x
Evaluate submissions x
Select preferred bidder x
Contract negotiations x
Award PIC contract x
PMU Contract (Project Coordinator)
Prepare TOR and Advertise EOI x
Shortlisting x
Evaluation of shortlisted candidates x
Selection of first-ranked x
Contract negotiations x
Award of PMU contract x
Integration and Control System Contract
Prepare TOR x
ABD / YSPSC Approvals of TOR x
Request offers x
Review offers x
Contract negotiations x
Award Yap Integration and Control System contract x
Satisfy all ADB conditions to activate contract(s) and commence site works x x x x x x x x x
ADB=Asian Development Bank, EOI=expression of interest, EPC=engineering, procurement and construction, FSM=Federated States of Micronesia, I&C=integration and control, PIC=project implementation consultants, PMU=project management consultants, TOR=terms of reference, YSPSC=Yap State Public Service Corporation. Source: Asian Development Bank.
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III. PROJECT MANAGEMENT ARRANGEMENTS
A. Project Implementation Organizations: Roles and Responsibilities
Project Implementation Organizations
Management Roles and Responsibilities
Executing Agency (Department of Finance and Administration)
➢ Overall delivery of the project and reporting to Government. ➢ Ensure compliance with grant and project agreement covenants. ➢ Coordinate with the FSM Department of Resources and Development
on the preparation of withdrawal applications and their submission to ADB.
➢ Maintain separate project accounts; and have all project accounts audited annually and sent to ADB.
➢ Ensure the compliance and presentation of all reporting requirements under the project.
Project Steering Committee A project steering committee (PSC) will be established to manage coordination of project implementation between KUA and YSPSC, and for coordination with other development partners implementing or planning investments in KUA and YSPSC. The PSC will also manage common project issues such as use of contingency (which will be a single FSM REDP allocation) and approval of PIC invoices where common expenses are incurred. The PSC will comprise: (i) the CEO (or his designee) of KUA, (ii) the CEO (or his designee) of YSPSC, (iii) the CEO (or his designee) of PUC, (iv) a representative of DOFA, and (v) a representative of the FSM national government Department of Resources and Development (DORD); DORD will serve as the PSC Chair. ADB project officer and ADB Development Coordination Officer may join as observers. The PSC will convene on an ad hoc basis as necessary, but no less frequently than twice per year, in any of (i) Kosrae, (ii) Yap, or (iii) Pohnpei/Palikir. The functions and responsibilities of the PSC with respect to project reporting, procurement, and other project implementation matters are further delineated in relevant sections of this Project Administration Manual. Bid evaluation committee(s) will be convened by the PSC, with PSC members participating in bid evaluation where the evaluation is for a goods or works contract is directly relevant to such PSC members (e.g. PUC, with no goods or works contracts currently envisaged under the project, would not participate in bid evaluation for such contracts as are envisaged for KUA or YSPSC).
Implementing Agency (FSM Department of Resources and Development)
➢ DORD will serve as the implementation agency (IA) for the overall project.
➢ The IA will contract with a project implementation consultant (PIC) to perform project oversight, design audit, and construction supervision services. DORD will also contract with an engineering, procurement, and construction (EPC) contractor to execute the works. DORD will directly recruit an FSM national project coordinator to provide project administrative support and overall project management unit (PMU) functions.
➢
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➢ The IA will be responsible for the following: ➢ ➢ (i) Overall implementation of the project. ➢ (ii) Compliance with the provisions of the grant and project agreements
and government policies and guidelines. ➢ (iii) Establishment and implementation of the project monitoring and
evaluation framework. ➢ (iv) Submission of required project reports, such as quarterly progress
report, safeguards monitoring report and the audited project/financial system to ADB.
ADB ➢ The ADB will monitor and review overall implementation in consultation with the EA and IA, including project implementation schedule; actions required with reference to summary poverty reduction and social strategy; gender action plan and environment management plan (as applicable); project expenditures progress with procurements and disbursement; compliance with grant covenants and likelihood of attaining project outputs and outcome.
➢ The ADB will assist the implementing agency in the procurement of consulting services, goods and works (as applicable).
KUA, PUC, and YSPSC ➢ These utilities will be the ultimate beneficiaries of the grant. They will participate as members of the Project Steering Committee with regard to grant activities that affect them, and will coordinate with the FSM Department of Resources and Development and Project Implementation Consultants on the execution of contracts for goods, works, or services, as applicable.
ADB = Asian Development Bank, KUA = Kosrae Utilities Authority, MOF = Ministry of Finance, PSC = project steering committee, YSPSC = Yap State Public Services Corporation. Source: Asian Development Bank.
B. Key Persons Involved in Implementation
Executing Agency Department of Finance and Administration
TBD (Post currently vacant) Secretary Ms. Senny Philip Assistant Secretary, Investment & International Finance Division [email protected]
Implementing Agency FSM Department of Resources and Development Project Steering Committee Chair
TBD (Post currently vacant) Secretary Mr. Hubert Yamada Assistant Secretary, DORD [email protected] TBD (Post currently vacant) Secretary Mr. Hubert Yamada Assistant Secretary, DORD [email protected]
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Asian Development Bank Director Energy Division (PAEN)
Mr. Olly Norojono Director +63 2 6326109 [email protected]
Project Officer Energy Division (PAEN)
J. Michael Trainor Energy Specialist +63 2 6321407 [email protected]
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C. Project Organization Structure
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IV. COSTS AND FINANCING
5. The project will include five procurement packages: (i) one package (in two lots) for goods and works for supply of PV battery to Yap and Kosrae; (ii) one package for the upgrade of the integration and control system in Yap and (iii) one consulting services package for the project implementation consultant, (iv) one package for Supplemental Management and Operations consultants for Pohnpei, and (v) one individual consultant contract to project management unit (PMU) support to DORD. The project will be financed by an ADB grant (Asian Development Fund) and Government FSM in-kind counterpart financing consisting of exemptions from import taxes and duties. A. Key Assumptions
6. The following key assumptions underpin the cost estimates and financing plan:
(i) Exchange rate: N/A. The FSM uses the United States dollar; all estimates are in USD. (ii) Price contingencies based on expected cumulative inflation over the implementation
period are as follows:
Table 2: Escalation Rates for Price Contingency Calculation*
Item 2019 2020 2021 2022 2023 Average
Foreign rate of price inflation 1.5% 1.5% 1.6% 1.6% 1.6% 1.6% Domestic rate of price inflation 1.0% 1.3% 1.5% 1.8% 1.8% 1.5%
* Current at the time of project preparation and analysis in May 2019 Sources: ADB. 2018. International Cost Escalation Factors 2017–2021. Manila; and ADB. 2018. Domestic Cost Escalation Factors 2017–2021. Manila.
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A. Detailed Cost Estimates by Expenditure Category
Table 3: Detailed Cost Estimates by Expenditure Category ($ Million)
Foreign Exchange
Local Currency
Total Cost
% of Total Base Cost
A. Investment Costs
1. Output 1: Yap Renewable Energy 2. 1.1 BESS 3. 1.2 Ground PV 4. 1.3 Roof PV 5. 1.4 Upgrade Control System
1.37 4.65 0.51 0.32
0.00 0.00 0.00 0.00
1.37 4.65 0.51 0.32
10% 34% 4% 2%
6. 6.84 0.00 6.84 50% 7. Output 2: Kosrae Main Grid Renewable Energy 8. 2.1 Main Grid PV and BESS 3.84 0.00 3.84 28% 9. 2.2 Walung Mini-Grid and Solar Home Systems 1.21 0.00 1.21 9%
5.05 0.00 5.05 37% Output 3: Pohnpei Utilities Corporation SMO 3.1 SMO Consultants 0.74 0.00 0.74 5% Output 4: Efficient Project Management 4.1 Project Implementation Consultant 0.87 0.00 0.87 6% 4.2 Project Management Unit Support 0.23 0.00 0.23 2%
10. 1.10 0.00 1.10 8% Subtotal (A) 13.73 0.00 13.73 100%
B. Contingencies
1. Physical Contingencies 2. Price Contingencies
1.37 0.41
0.00 0.00
1.37 0.41
10% 3%
Subtotal (B) 1.78 0.00 1.78 `13%
Total Project Cost (A+B) 15.51 0.00 15.51 113% Notes: Numbers may not sum precisely because of rounding.
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B. Allocation and Withdrawal of Grant Proceeds
ALLOCATION AND WITHDRAWAL OF GRANT PROCEEDS
Category ADB Financing
Item
Total Amount Allocated for ADB
Financing Percentage and Basis for Withdrawal from the Grant Account ($)
Category
1
Equipment, Works, Project Implementation Consultants, Supplemental Management and Operations Consultant, and Project Management Unit support**
15,000,000 100% of total expenditure claimed*
Total 15,000.000 * Exclusive of taxes and duties imposed within the territory of the Recipient. **Subject to the condition for withdrawal described in paragraph 4 of Schedule 2 of the Grant Agreement.
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C. Detailed Cost Estimates by Financier
Table 4: Detailed Cost Estimates by Financier ($ million)
ADB Government Total Cost
Amount % of Cost
Category
Amount % of Cost Category
Amount Taxes
and Duties
Item
A Investment Costs
Output 1: Yap Main Grid Renewable Energy
1.1 BESS 1.31 96% 0.05 4% 1.37 0.05 1.2 Ground PV 4.47 96% 0.18 4% 4.65 0.18 1.3 Roof PV 0.49 96% 0.02 4% 0.51 0.02 1.4 Upgrade Control System 0.31 96% 0.01 4% 0.32 0.01
6.58 96% 0.26 4% 6.84 0.26
Output 2: Kosrae Main Grid Renewable Energy
2.1 Main Grid PV and BESS 3.69 96% 0.15 4% 3.84 0.15 2.2 Walung Mini-Grid and Solar Home Systems 1.16 96% 0.05 4% 1.21 0.05
4.85 96% 0.19 4% 5.05 0.19
Output 3: Pohnpei Utilities Corporation SMO
3.1 SMO Consultants 0.74 100% 0.00 0% 0.74 0.00
Output 4: Efficient Project Management 4.1 Project Implementation Consultant 0.87 100% 0.00 0% 0.87 0.00 4.2 Project Management Unit Support 0.23 100% 0.00 0% 0.23 0.00
1.10 100% 0.00 0% 1.10 0.00
Subtotal (A) 13.27 100% 0.45 3% 13.73 0.45
B Contingencies
1. Physical 1.33 97% 0.05 3% 1.37 0.05 2. Price 0.40 97% 0.01 3% 0.41 0.01
Subtotal (B) 1.72 97% 0.06 3% 1.78 0.06 Total Project Cost (A+B) 15.00 97% 0.51 3% 15.51 0.51
Note: Numbers may not sum precisely because of rounding. Source: Asian Development Bank estimates.
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D. Detailed Cost Estimates by Outputs and/or Components
Table 5: Detailed Cost Estimates by Outputs and/or Components ($ million)
Item
Output 4 Total Output 1 Output 2 Output 3 Project Cost YAP KOSRAE PUC SMO Management
A. Investment Costs Output 1: Yap Main Grid Renewable Energy
1.1. BESS 1.37 1.37
1.2. Ground PV 4.65 4.65
1.3. Roof PV 0.51 0.51
1.4 Upgrade Control System 0.32 0.32
Output 2: Kosrae Main Grid Renewable Energy
2.1. Main Grid PV and BESS 3.84 3.84
2.2. Walung Mini-Grid and Solar Home
Systems 1.21 1.21
Output 3: Pohnpei Utilities Corporation SMO 3.1. SMO Consultants 0.74 0.74 Output 4: Efficient Project Management 4.1. Project Implementation Consultant 0.87 0.87 4.2. Project Management Unit Support 0.23 0.23
Subtotal (A) 13.73 6.84 5.05 0.74 1.10
B. Contingencies 1. 1. Physical 1.37 0.68 0.50 0.07 0.11 2. 2. Price 0.41 0.20 0.15 0.02 0.03
Subtotal (B) 1.78 0.89 0.66 0.10 0.14
Total Project Cost (A+B) 15.51 7.73 5.70 0.84 1.24 Source: Asian Development Bank estimates.
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E. Detailed Cost Estimates by Year
Table 6: Detailed Cost Estimates by Year
($ million)
Item Total Cost 2019 2020 2021 2022 2023
A. Investment Costs
1.
Output 1: Yap Main Grid Renewable Energy 1.1 BESS 1.37 0.00 1.02 0.27 0.07 0.00 1.2 Ground PV 4.65 0.00 3.49 0.93 0.23 0.00 1.3 Roof PV 0.51 0.00 0.38 0.10 0.03 0.00 1.4 Upgrade Control Systems 0.32 0.00 0.24 0.06 0.02 0.00 6.84 0.00 5.13 1.37 0.34 0.00
Output 2: Kosrae Main Grid Renewable Energy 2.1 Main Grid PV and BESS 3.84 0.00 2.88 0.77 0.19 0.00 2.2 Walung Mini-Grid and Solar Home Systems 1.21 0.00 0.90 0.24 0.06 0.00 5.05 0.00 3.78 1.01 0.25 0.00 Output 3: Pohnpei Utilities Corporation SMO 3.1 SMO Consultants 0.74 0.00 0.56 0.15 0.04 0.00 Output 4: Efficient Project Management 4.1 Project Implementation Consultant 0.87 0.00 0.29 0.29 0.29 0.00 4.2 Project Management Unit Support1 0.23 0.00 0.08 0.08 0.08 0.00 1.10 0.00 0.37 0.37 0.37 0.00
Subtotal (A) 13.73 0.00 9.84 2.90 1.00 0.00
B. Contingencies 1. Physical 1.37 0.00 1.03 0.27 0.07 0.00 2. Price 0.41 0.00 0.25 0.12 0.04 0.00
Subtotal (B) 1.78 0.00 1.28 0.39 0.11 0.00
Total Project Cost (A+B) 15.51 0.00 11.58 3.14 0.80 0.00 Source: Asian Development Bank estimates. 1. Includes $0.050 million for expense related to meetings of the Project Steering Committee
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F. Contract and Disbursement S-Curve
7. The graph below shows quarterly contract awards and disbursement projections over the life of the project. The S-curve is only for ADB financing and ADB-administered cofinancing, which will be recorded in ADB’s systems and reported through e-Ops. Counterpart funds and any other cofinancing should be excluded. The projection for contract awards should include contingencies and unallocated amounts, but excludes front-end fees, service charges, and interest during construction. The total projected disbursements should be equal to the full grant amount, up to 4 months after loan grant closing.
Table 7: Contract Award and Disbursement Projection
Item 2019 Q4
2020 Q1
2020 Q2
2020 Q3
2020 Q4
2021 Q1
2021 Q2
2021 Q3
2021 Q4
Cumulative contract awards
0
1.84
15.00 15.00
15.00
15.00
15.00
15.00
15.00
Cumulative disbursements
0
0
3.61
7.92
9.23
10.76
12.30
13.84
15.00
S-Curve
-
3.000000
6.000000
9.000000
12.000000
15.000000
2019Q4
2020Q1
2020Q2
2020Q3
2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
Cumulative contract awards Cumulative disbursements
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G. Fund Flow Diagram
8. The Implementing Agency will prepare withdrawal applications and submit them simultaneously to: (i) the PSC (for information), (ii) ADB project officer (for information), and (iii) to the EA (for action), whereupon the EA will submit it to ADB for direct payment; or, in the case of costs of project management unit support, reimbursement. The EA is obliged to submit withdrawal applications to ADB for processing within fourteen days of receipt, unless the EA or PSC have fundamental objections, in which case the EA or PSC must inform both the IA and ADB, citing its reasons. 9. The diagram below shows how the funds will flow from ADB and the recipient to implement project activities, and how documents for requests for disbursement will flow to ADB.
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V. FINANCIAL MANAGEMENT
A. Financial Management Assessment
10. The financial management assessment (FMA) was conducted in July 2019 in accordance with ADB’s Guidelines for the Financial Management and Analysis of Projects and the Financial Due Diligence: A Methodology Note. The FMA considered the capacity of the FSM Department of Finance and Administration (EA) and FSM Department of Resources and Development (IA), including funds-flow arrangements, staffing, accounting and financial reporting systems, financial information systems, and internal and external auditing arrangements. Based on the assessment, the key financial management risks identified are: (i) the IA has no experience in administering ADB-financed projects; (ii) the IA has no full-time accountant, and relies on an administrative officer to record and report on preparation of vouchers and invoices for payment; payments of vouchers and invoices are centralized, and executed by the Department of Finance and Administration (EA); (iii) there is no financial reporting system at the level of the IA, since all payments are administered at the centralized level (by the EA), and no audit (external or internal) of DORD’s financial management processes occurs. It is concluded that the overall pre-mitigation financial management risk of DORD is substantial. DOFA has prior experience with World Bank Funded Projects and sufficient financial management capacity to manage the grant proceeds: no transfer of funds is planned to DORD. The EA and IA have agreed to implement an action plan as key measures to address the deficiencies. The financial management action plan is provided in Table 7.
Table 7: Financial Management Action Plan - DORD
Risk Type Risk
Assessment Risk Description Mitigation Measures Timing
1. Country specific risk
Moderate PEFA 2013 notes risks in effectiveness of taxpayer registration, tax assessment and collection
Being addressed through the World Bank project approved in 2018 where funding is being made available for a revenue management system.
Ongoing
2. Entity-specific Risks
Substantial DORD has no previous experience in implementing an ADB project
DORD and DOFA staff will require training in ADB procedures to prepare and submit Withdrawal Applications
Prior to grant disbursement
DORD = Department of Resources and Development; PEFA = public expenditure and financial accountability.
B. Disbursement
11. The grant proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2017, as amended from time to time), and detailed arrangements agreed upon between the government and ADB. Online training for project staff of the IA and EA on disbursement policies and procedures is available.1 Project staff are encouraged to avail of this training to help ensure efficient disbursement and fiduciary control. 12. Direct payment procedures will be used for civil works, consulting services, and equipment; in the case of PMU support (project coordinator consultant and project steering committee meeting costs), reimbursement procedures will be used: the EA and/or IA will cover PMU support costs directly, and withdrawal applications for reimbursement to ADB. The IA will be responsible for: (i) preparing disbursement projections; (ii) requesting budgetary allocations
1 Disbursement eLearning. http://wpqr4.adb.org/disbursement_elearning.
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for counterpart funds (if applicable); and (iii) collecting supporting documents. The IA will be responsible for preparing and sending the withdrawal applications to the EA for submission to ADB as described in paragraph 8 above. 13. Before the submission of the first withdrawal application, the recipient should submit to ADB sufficient evidence of authority of the person(s) who will sign the withdrawal applications on behalf of the government, together with the authenticated specimen signatures of each authorized person. The Recipient should ensure sufficient category and contract balances before requesting disbursements. Use of ADB’s Client Portal for Disbursements (CPD)2 system is encouraged for submission of withdrawal applications to ADB. C. Accounting
14. The executing agency will maintain, or cause to be maintained, separate books and records by funding source for all expenditures incurred on the project following accrual-based accounting following the Generally Accepted Accounting Principles. The executing agency will prepare consolidated project financial statements in accordance with the government's accounting laws and regulations which are consistent with international accounting principles and practices. D. Auditing and Public Disclosure
15. The Department of Finance and Administration (DOFA) will cause the detailed project financial statements to be audited in accordance with the Government’s audit regulations by an independent auditor acceptable to ADB. Audited project financial statements together with the auditor’s opinion will be presented in the English language to ADB within 6 months from the end of the fiscal year by the DOFA. All project financial statements will be submitted to the PSC for review. 16. The DOFA will also cause the entity-level financial statements to be audited in accordance with Government Auditing Standards issued by the Comptroller General of the United States an adopted by FSM Government, by an independent auditor acceptable to ADB. The audited entity-level financial statements, together with the auditor’s report and management letter, will be submitted in the English language to ADB within 1 month after their approval by the competent authority. 17. The annual audit report for the project accounts will include a management letter and auditor’s opinions, which cover: (i) whether the project financial statements present an accurate and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting standards; (ii) whether the proceeds of the grant were used only for the purpose(s) of the project; and (iii) whether the recipient or executing agency was in compliance with the financial covenants contained in the legal agreements for the project. 18. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor.
2 The CPD facilitates online submission of WA to ADB, resulting in faster disbursement. The forms to be completed
by the Recipient are available online at https://www.adb.org/documents/client-portal-disbursements-guide.
19
19. The EA and IA have been made aware of ADB’s approach to delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements.3 ADB reserves the right to require a change in the auditor (in a manner consistent with the constitution of the recipient), or for additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed. ADB reserves the right to verify the project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures. 20. Public disclosure of the audited project financial statements, including the auditor’s opinion on the project financial statements, will be guided by ADB’s Access to Information Policy 2018. After the review, ADB will disclose the audited project financial statements and the opinion of the auditors on the project financial statements no later than 14 days of ADB’s confirmation of their acceptability by posting them on ADB’s website. The management letter, additional auditor’s opinions, and audited entity financial statements will not be disclosed.4
VI. PROCUREMENT AND CONSULTING SERVICES
A. Procurement of Goods, Works, and Consulting Services
21. All procurement of goods and works will be undertaken in accordance with ADB’s Procurement Guidelines (2015, as amended from time to time). 22. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is in Section B. 23. All consultants will be recruited according to ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time). (This applies equally to the FSM project coordinator that DORD will recruit directly.) 24. Project Implementation Consultants. A single PIC will be recruited to support the Department of Resources and Development in project implementation. Selection of the PIC will be delegated to ADB who will prepare the PIC’s terms of reference, issue the request for proposal, and evaluate proposals that it receives. ADB will evaluate bids on a quality and cost based selection (QCBS) methodology with a quality-cost-based selection ratio of 90:10. The PSC will be consulted during each critical juncture of the PIC selection process, as presented in the table below:
3 ADB’s approach and procedures regarding delayed submission of audited project financial statements: (i) When audited project financial statements are not received by the due date, ADB will write to the executing
agency advising that (a) the audit documents are overdue; and (b) if they are not received within the next 6 months, requests for new contract awards and disbursement such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters will not be processed.
(ii) When audited project financial statements are not received within 6 months after the due date, ADB will withhold processing of requests for new contract awards and disbursement such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters. ADB will (a) inform the executing agency of ADB’s actions; and (b) advise that the loan may be suspended if the audit documents are not received within the next 6 months.
(iii) When audited project financial statements are not received within 12 months after the due date, ADB may suspend the loan.
4 This type of information would generally fall under public communications policy exceptions to disclosure. ADB.2011. Public Communications Policy. Paragraph 97(iv) and/or 97(v).
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Consultant Recruitment Activities – Matrix of Responsibilities For PIC and SMO Consultants5
No. Stage Activity Responsibility
1 Pre-advertisement Procurement plan
Preparation of terms of reference, budget estimates, shortlisting criteria and recommendation of selection method choice (as per the approved project procurement plan)
ADB, subject to PSC concurrence.
2 Advertisement/ Consulting Services Recruitment Notice (CSRN)
Advertisement of consulting services assignment and collection of Expressions of Interest (EOIs)
ADB
3 Preparation of Long List
EOIs received electronically through ADB’s Consultant Management System (CMS) and by email are summarized [Note: EOIs will be shared with the Project Steering Committee (PSC)]
ADB
4
Shortlisting of consultants
EOIs received are reviewed and evaluated, shortlist prepared
ADB, with PSC to provide a no-objection letter on shortlist.
5 Preparation of Request for Proposal
Request for Proposal (RFP) is prepared. ADB prepares RFP, with PSC to provide a no-objection letter on RFP.
7 Issuance of RFP to the shortlisted firms
ADB issues RFP to the shortlisted firms. ADB, with copy of RFP supplied to PSC
8 Clarifications to the RFP
ADB responds to clarifications requests. If matter requires clarification of TOR and PSC or IA contribution to the consulting assignment, ADB project officer seeks clarifications from PSC.
ADB and PSC, if applicable. Summary of all queries and responses will be provided to PSC.
9 Receipt of the proposals
Proposals are submitted through Consultant Management System of ADB.
ADB
10 Distribution of technical proposals
Technical proposals are distributed to the members of the consultant selection committee (CSC), comprising ADB project officer, ADB’s Portfolio, Procurement, and Financial Management Department (PPFD), and a third-party technical reviewer from another ADB regional department.
ADB
11 Copy of technical proposals shared with PSC
ADB project officer shares electronic copies of technical proposals with the PSC.
ADB
12
ADB evaluates technical proposals received and advises
Technical proposals are evaluated by ADB CSC
ADB
5 The FSM National Project Coordinator will be an individual consultant recruited directly by DORD following ADB’s
Guidelines on the Use of Consultants (2013, as amended from time to time).
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No. Stage Activity Responsibility
PSC prior to formal CSC meeting
13 Confidential notification of total scores of evaluated technical proposals
ADB project officer notifies PSC on total scores of evaluated technical proposals.
ADB
14 Electronic Approval of technical evaluation
International Staff of PPFD recommends approval of technical evaluation minutes. The minutes are reviewed and approved by Section Head (or OIC) and then by Director or Head of Procurement (PFP2). Approval of technical evaluation minutes online trigger opening of financial proposals of the qualifying firms the next day.
ADB
15 Electronic opening of financial proposals.
Consultant Management System issues notifications of electronic opening of the financial proposals to consulting entities whose technical proposals were evaluated above qualifying threshold of 750 points out of 1000.
ADB
16 Financial evaluation and Final ranking
ADB Contract Administration Unit staff evaluates financial proposals and submits the results of evaluation and final ranking for endorsement of International Staff of PPFD. International Staff of PPFD shares the results of the financial evaluation and final ranking with the PSC, pointing out any inconsistencies in the Financial proposals that might need to be discussed during the negotiations with the first-ranked firm. If no issues are uncovered within one working day or no feedback is received within one working day, the final ranking is recommended for approval to Section Head and then to Director, PFP2.
ADB
17 Notification of final ranking and recommendation of contract award
ADB project officer notifies PSC on final ranking and recommendation of contract award to the first-ranked firm.
ADB
18 Contract negotiations IA negotiates the contract with the first-ranked firm. ADB may assist negotiations, if required
IA and ADB (if requested)
19 Publication of contract award
IA publishes the awards on its websites, if applicable. ADB publishes awards on its website.
IA and ADB
20 Notice to Proceed IAs issue Notices to Proceed. IA ADB = Asian Development Bank, EA = executing agency, PFP2 = Procurement Division 2, IA = implementing agency, OIC = officer-in-charge.
25. Engineering, Procurement, and Construction. A single Bidding Document (BD) to be prepared by the PPTA International Consultant (Entura) will be issued for EPC bids for KUA and YSPSC with KUA and YSPSC works separated into separate lots. Bidders will be permitted to bid for one or both lots and to offer a discount in the event they are awarded both lots. Price evaluation will be on the basis of least overall cost across both lots (i.e. the lowest bidder for one State may not be the preferred bidder if an overall lower cost to FSM can be achieved). Entura’s
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current contract with ADB (Contract S53104) under TA 9242-REG provides for Entura to support the grant recipient in advance procurement of the EPC contract, including preparation of bid documents, bid evaluation, preparation of bid evaluation reports, and support during contract negotiations. Throughout this process, Entura will report to, and seek guidance from, the PSC. B. Procurement Plan
26. The procurement plan is prepared in accordance with the generic or country-specific templates prepared by the Procurement, Portfolio and Financial Management Department.
Basic Data
Project Name: Renewable Energy Development Project
Country: Federated States of Micronesia Executing Entities: Department of Finance and Administration
Procurable Amount: $15.00 million Date of First Procurement Plan: Sep 2019
1. Process Thresholds, Review and 18-month Procurement Plan
27. Except as ADB may otherwise agree, the following thresholds shall apply to procurement of goods and works.
Procurement of Goods and Works
Method Threshold
International Competitive Bidding for Works Above $3,000,000 International Competitive Bidding for Goods Above $1,000,000 National Competitive Bidding for Works Below or equal to $3,000,000 National Competitive Bidding for Goods Below or equal to $1,000,000 Shopping for Works / Goods Below or equal to $300,000
2. ADB Prior and Post Review
28. Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the project. Procurement Method Prior or Post Comments
Procurement of Goods and Works International Competitive Bidding Works Prior International Competitive Bidding Goods Prior Shopping for Works Prior Shopping for Goods Prior Recruitment of Consulting Firms Quality-and Cost-Based Selection Recruitment of Individual Consultants Individual Consultancy Services
Prior Prior
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3. Goods and Works Contracts Estimated to Cost $1 Million or More
29. The following table lists goods and works contracts for which the procurement activity is either ongoing or expected to commence within the next 18 months.
Package Number
General Description
Estimated Value
Procurement Method
Review [Prior / Post ]
Bidding Procedure
Advertise-ment Date
(quarter/ year)
Comments
1 Supply and installation of both rooftop and ground mounted Solar PV Generation including an integrated Battery Energy Storage System; and Supply and installation of both rooftop and ground mounted Solar PV Generation
$11.89 Million
ICB Prior Single stage, one envelope
Q3 2019 A single bidding document will be issued for this package with 2 Lots: Lot 1- YAP Supply and installation of both rooftop and ground mounted Solar PV Generation including an integrated BESS for $6.84 million; and Lot 2 – KOSRAE- Supply and installation of both rooftop and ground mounted Solar PV Generation for $5.05 million. Bidder has an option to bid for either or both packages
4. Consulting Services Contracts Estimated to Cost $100,000 or More
30. The following table lists consulting services contracts for which the recruitment activity is either ongoing or expected to commence within the next 18 months.
Package Number
General Description
Estimated Value
Recruitment Method
Review (Prior/Post)
Advertisement Date
(quarter/year)
Type of Proposal
Comments
2
Project Implementation Consultant
$0.87 million
QCBS (90:10)
Prior Q4 2019 Full Technical Proposal
Consultant Terms of Reference included in Appendix 1
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Package Number
General Description
Estimated Value
Recruitment Method
Review (Prior/Post)
Advertisement Date
(quarter/year)
Type of Proposal
Comments
3 SMO Consultants
0.74 (Pohnpei)
QCBS (90:10)
Prior Q4 2019 Full Technical Proposal
4 FSM Project Coordinator
$0.18 milion
ICS Prior Q4 2019 N/A To be recruited by DORD directly
5. Goods and Works Contracts Estimated to Cost Less than $1 Million
and Consulting Services Contracts Less than $100,000 (Smaller Value Contracts)
31. The following table lists smaller-value goods, works and consulting services contracts for which the activity is either ongoing or expected to commence within the next 18 months.
Package Number
General Description
Estimated Value
Recruitment Method
Review (Prior/Post)
Advertisement Date
(quarter/year)
Type of Proposal
Comments
5 Yap: Upgrade of the existing Proprietary Integration and Control System
$0.31 million SSS Prior Q4 2019 Quotation and negotiation nil
6. Project Steering Committee Meeting Expenses A provisional allocation of $0.050 million from grant proceeds is available to cover the costs of convening meetings of the Project Steering Committee, to be disbursed through reimbursement procedure to DOFA upon submission of a withdrawal application supported by evidence of eligible related expenses. C. Consultant's Terms of Reference 32. The project will include a contract for Project Implementation Consultants (a firm) to provide consulting services to support the Project Management Unit in supervising the design, delivery, implementation and commissioning of the project in its entirety including all engineering, safeguards compliance monitoring, gender strategy development and reporting requirements. 33. The detailed terms of reference for the PIC will be drafted by ADB. Consultants Terms of Reference are included in Appendix 1.
VII. SAFEGUARDS
34. In compliance with ADB’s Safeguard Policy Statement (2009), the project’s safeguard categories are as follows. 35. Environment. The project is classified as category B for environment with 2 initial environmental examinations (IEEs) and environmental management plans (EMPs) prepared in
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accordance with the Kosrae State Code and the Regulations for Development Projects and the Yap State Environmental Protection Agency Regulations and ADB’s Safeguard Policy Statement (2009). No significant environmental impacts will result from the implementation of the overall project. During implementation, the project implementation consultants (PIC) will support PMUs in both KUA and YSPSC to (i) review and update IEEs, (ii) monitor contractor compliance and manage environmental impacts, and (iii) report on environmental monitoring. Environmental reporting to ADB will be on a semiannual basis. 36. Involuntary resettlement. The project is classified as category B for involuntary resettlement with the preparation of a draft land acquisition and resettlement plan (RP). The RP is for the acquisition of one identified site on Yap and for the voluntary acquisition of easements for power distribution in Walung village on Kosrae. The draft RP will be updated after detailed engineering design. No subproject is expected to involve physical or economic displacement. During implementation, the project implementation consultants (PIC) will support PMUs in both KUA and YSPC to monitor compliance with the RP. Reporting on RP compliance to ADB will be on a semiannual basis. 37. Indigenous peoples. The project is classified as category C for indigenous peoples6 with due diligence confirming that no indigenous communities will be impacted by any of the subprojects analyzed. The beneficiaries in the project sites are not discriminated upon due to their language, skin color, or traditional practices. All project outputs will be delivered in a culturally appropriate and participatory manner.
VIII. GENDER AND SOCIAL DIMENSIONS 38. This project is classified overall as some gender elements. To provide direct gender benefits and to further enhance KUA and YSPSC operations, the project will provide assistance for capacity building through the project implementation consultants to help YSPSC and KUA develop and begin implementing a gender strategy to broaden the available pool of technical and trade expertise by attracting and retaining more females to those roles.
IX. PERFORMANCE MONITORING, EVALUATION, REPORTING, AND COMMUNICATION
A. Design and Monitoring Framework Impact the Project is Aligned with
Sustainable social and economic development of the FSM promoted through the provision and utilization of cost-effective, safe, reliable, and sustainable energy services (National Objective for Energy)a
Results Chain Performance Indicators
with Targets and Baselines
Data Sources and Reporting Mechanisms Risks
Outcome Sustainable generation and utilization of
By 2023: a. Renewable electricity contribution
increased to 38% of generation mix in Yap
YSPSC and KUA annual reports
Asset lifetime not achieved because of poor maintenance
6 The term indigenous peoples as used here is derived from ADB’s Policy on Indigenous Peoples, adopted in 1998:
https://www.adb.org/documents/policy-indigenous-peoples
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Results Chain Performance Indicators
with Targets and Baselines
Data Sources and Reporting Mechanisms Risks
renewable energy in Yap, Kosrae, and Pohnpei increased
and 30% in Kosrae (2019 baseline: 19% in Yap and 8% in Kosrae)
b. Generation of solar energy increased by 2,700 MWh per year in Yap and 1,700 MWh per year in Kosrae (2019 baseline: 580 MWh in Yap and 490 MWh in Kosrae)
c. Diesel fuel consumption decreased by at least 0.92 million liters per year in Yap and Kosrae (2019 baseline: 4 million liters)
d. CO2 emissions in Yap and Kosrae reduced by 2,533 tons per year (2019 baseline: 10,730 tons of CO2 emissions)
e. Walung Village fully electrified (2020 baseline: none)
f. YSPSC and KUA will achieve and maintain an operating ratio of at least 1:1 (baseline: to be determined)
caused by limited experience in O&M of the new assets installed under the project Reduction in diesel use by power sector offset by increase in other sectors
Outputs 1. Solar photovoltaic and mini grid in Kosrae installed
By 2023:
1.1. Additional 1,150 kWp of solar photovoltaic commissioned and operational in Kosrae power system (2019 baseline: 345 kWp)
1.2.1. 60 kWp rooftop solar photovoltaic installed on school building (2019 baseline: 0)
1.2.2. 30 kW diesel generator and 160 kWh BESS installed (2019 baseline: 0)
1.2.3. 39 households connected to the distribution network with priority to connecting 100% of households headed by womenb (2019 baseline: 0)
1.2.4. Nine SHSs installed outside of mini grid distribution network (2019 baseline: 0)
1.3. Three Workshops with KUA on workforce planning held and three workshops on gender strategy and institutional study held, with outreach to increase women in the utility sectorc (2019 baseline: 0)
KUA annual reports, project progress reports
Delayed operation caused by the delays of the World Bank-financed battery energy storage system for KUA, thus delaying the dispatch of the ADB-funded photovoltaic generation Operators manually override control systems, using more diesel fuel than projected
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Results Chain Performance Indicators
with Targets and Baselines
Data Sources and Reporting Mechanisms Risks
2. Solar photovoltaic and BESS installed with system integration upgraded in Yap
By By 2023: 2.1. Additional 300 kWp solar photovoltaic
rooftops installed (2019 baseline: 200 kWp)
2.2. At least 1,950 kWp ground mount photovoltaic generation capacity commissioned and operational (2019 baseline: 0)
2.3. At least an 800 kW/800 kWh BESS commissioned (2019 baseline: 0)
2.4. Control system is upgraded successfully and outputs 1–3 are integrated into the YSPSC power system (2019 baseline: 0)
2.5 Workshops with YSPSC held on workforce planning, and three workshops on gender strategy and institutional study with outreach to increase women in the utility sector, with targeted human-resource policy reforms, such as paid maternity leave, flexible working hours, and anti-harassment policiesd (2019 baseline: 0)
YSPSC annual reports, project progress reports
Delay in securing land lease for ground mount solar photovoltaic site Operators manually override control systems, using more diesel fuel than projected
3. Pohnpei Utilities Corporation strengthened
By 2023: 3.1. PUC’s Operating Ratio of 1.0 maintained
(2019 baseline: < 1.0) 3.2. Key energy policies adopted (2019
baseline: not applicable) 3.3. Capital investment planning procedures
improved (2019 baseline: not applicable)
Pohnpei Utilities Corporation supplemental management and operations consultant reports
Decision-making delays at the political level
4. Efficient project management delivered and implementing agency capacity developed
By 2023: 4. Project implementation completed within
budget and on schedulee (2019 Baseline: not applicable)
Key Activities with Milestones
1. Solar photovoltaic and mini grid in Kosrae installed 1.1 Install solar photovoltaic in Kosrae power system 1.2 Install mini grid and SHS in Walung Village 1.2.1 Procure EPC contractor (Q3 2019–Q1 2020) 1.2.2 Award EPC contract (Q1 2020) 1.2.3 Contractor designs and orders equipment (Q2–Q3 2020) 1.2.4 Contractor mobilizes to Kosrae (Q4 2020) 1.2.5 Contractor installs solar photovoltaic, mini grid, and SHS (Q4 2020–Q1 2023) 1.2.6 Contractor operates, maintains, and hands over solar photovoltaic, mini grid, and SHS with manuals
(Q1 2023) 1.3 KUA capacity building in solar photovoltaic and mini grid construction, operation and maintenance,
gender, environmental, and social safeguards (Q2 2021–Q4 2022)
2. Solar photovoltaic and BESS installed with system integration upgraded in Yap 2.1 Install solar photovoltaic on Yap Sports Centre rooftops
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Key Activities with Milestones
2.2 Install ground-mount solar photovoltaic near YSPSC power station 2.3 Install BESS at YSPSC power station 2.3.1 Procure EPC contractor (Q4 2019–Q1 2020) 2.3.2 Contractor designs and orders equipment (Q2–Q3 2020) 2.3.3 Contractor mobilizes to Yap (Q4 2020) 2.3.4 Contractor installs solar photovoltaic and BESS (Q4 2020–Q2 2021) 2.3.5 Contractor integrates BESS with YSPSC power system (Q2 2020–Q3 2021) 2.3.6 Contractor operates, maintains, and hands over solar photovoltaic and BESS with manuals (Q4 2021) 2.4 Upgrade integration and control system for YSPSC power system to integrate outputs 2.1, 2.2, and 2.3
into YSPSC power system 2.4.1 Procure I&C contractor (Q4 2019–Q1 2020) 2.4.2 Design I&C philosophy (Q3 2020) 2.4.3 I&C contractor upgrades control system (Q4 2020–Q1 2021) 2.4.4 I&C contractor integrates outputs 1–3 (Q2–Q3 2021) 2.4.5 I&C contractor commissions YSPSC power system (Q3–Q4 2021) 2.5 YSPSC capacity building in solar photovoltaic and BESS design, construction, operation and
maintenance; and on gender, environmental, and social safeguards (Q2 2021–Q4 2022).
3. Pohnpei Utilities Corporation strengthened 3.1 Recruit and select supplemental management and operations consultants (Q4 2019–Q1 2020) 3.2 Consultant mobilization to Pohnpei (Q1 2020)
4. Efficient project management delivered and implementing agency capacity developed 4.1 Recruit and select project implementation consultants (Q4 2019–Q1 2020) 4.2 Project implementation consultant facilitates workshops with KUA and YSPSC on strategies to
develop medium- to long-term workforce planning and to develop and implement a gender strategy (Q3–Q4 2020)
Inputs Asian Development Bank: $15.00 million (Asian Development Fund grant) Government of the FSM: $0.51 million (in kind, taxes, and duties)
BESS = battery energy storage system; CO2 = carbon dioxide; EPC = engineering, procurement, and construction; FSM = Federated States of Micronesia; I&C = integration and control; KUA = Kosrae Utilities Authority; kW = kilowatt; kWh = kilowatt-hour; kWp = kilowatt-peak; MWh = megawatt-hour; Q = quarter, SHS = solar home system; YSPSC = Yap State Public Utility Corporation. a Government of the Federated States of Micronesia, Department of Resources and Development. 2012. Energy
Policy: Volume I. Palikir. b 10% of Walung households are headed by women. c This will include preparation of a gender needs assessment of women’s reproductive, productive, and community
needs; identification of, and recommendations to remedy, existing shortcomings in institutional policies; and examination of potential for supporting women’s groups and/or a women’s village committee.
d Yap Human Resource Gender Policies outline measures that include equal employment, harassment policy, and maternity leave. An institutional study will be carried out, with the aim of supporting paid maternity leave, strengthening of the harassment policy, and equal employment and opportunities.
e Project implementation consultants will include a gender and development analysis expert. Contribution to the ADB Results Framework: to be determined Source: Asian Development Bank
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B. Monitoring 39. All project monitoring and compliance reports will be submitted to ADB through the PSC 40. Project performance monitoring. FSM DORD, in coordination with FSM DOFA and KUA, PUC, and YSPSC, and assisted by the PIC, will prepare quarterly monitoring reports, including (i) disaggregated baseline data for output and outcome indicators, and (ii) implementation status: ‘Projection vs. Actual’ (e.g. implementation schedule, costs, outputs (installed capacity, energy yield and GHG emissions reductions etc.). The quarterly reports will provide information necessary to update ADB's project performance reporting system. The two annual grant reviews and the quarterly monitoring reports will include environmental and social safeguard monitoring reports. 41. Compliance monitoring. In addition to the standard assurances, compliance with the specific assurances will be monitored. Implementation of covenants will be (i) summarized in the quarterly progress reports, (ii) discussed during PMU meetings, and (iii) reviewed during biannual grant review missions. The executing and implementing agencies will cause the detailed project accounts to be audited in accordance with International Standards on Auditing by an auditor acceptable to ADB. The audited accounts will be submitted in the English language to ADB within 6 months of the end of the fiscal year by the executing agency. The Government has been made aware of ADB’s policy on delayed submission, and the requirements for satisfactory and acceptable quality of the audited accounts. ADB reserves the right to verify the project's financial accounts to confirm that ADB’s financing is used in accordance with ADB’s policies and procedures. 42. Safeguards monitoring. Environment and social safeguards will be monitored by international and national specialists within the PMU assisted PIC, in accordance with the initial environmental examinations and the resettlement plan. The results of the safeguard monitoring will be reported in the PMU quarterly reports and safeguards semi-annual monitoring reports. Additionally, two annual review missions will report on safeguard compliance. 43. Gender and social dimensions monitoring. The project’s PIC will include an international gender specialist. The specialist will be responsible for enhancing KUA and YSPSC operations through the project’s institutional strengthening component to help KUA and YSPSC develop and begin implementing a gender strategy to broaden the available pool of technical and trade expertise by attracting and retaining more females to those roles. At least six workshops will be carried out. 44. Incorporating social and gender mainstreaming measures into project planning and implementation, including awareness activities and establishment of gender-disaggregated indicators for project performance and monitoring. The PMU will report the progress of activities in its quarterly progress reports on overall project activities to ADB and the Government. 45. Greenhouse gas emissions monitoring. During the operational phase, the project’s GHG savings will be monitored by KUA and YSPSC, with initial assistance from the PIC. A monitoring procedure and analysis tools will be developed that utilize data streams available to KUA and YSPSC through existing data collection that will be improved as part of the project. The method to be used will estimate fuel consumption if the associated renewable energy contribution to demand was not available and compare that to actual fuel consumption. An emissions factor of 2.68 tCO2/liter 10 (diesel) is applied to the difference. GHG savings will be published annually
30
by KUA and YSPSC. For Walung Village, an emissions factor of 0.778 tCO2/kWh11 is applied for all energy exported from the power station. GHG savings will be published annually by the IA. C. Evaluation 46. ADB and the EA through the PSC will conduct two annual reviews throughout the implementation of the project as well as a midterm grant review for the project. The review will monitor and conduct a ‘Projection vs. Actual’ comparison analysis for (i) project output quality (e.g. installed capacity, energy yields and GHG emissions reductions, etc.), (ii) implementation arrangements, (iii) implementation progress, and (iv) disbursements. Within 6 months of physical completion of the project, the EA will submit a project completion report to ADB.7 47. ADB will undertake a midterm review within two years of the Project being effective or at any time that ADB or the concerned Government consider it necessary. The midterm review mission will (i) review institutional, administrative, organizational, technical, environmental, social, economic, and financial aspects of the project based on the assumptions and risks included in the design and monitoring framework and updated PPR; (ii) review covenants to assess whether they are still relevant or need to be changed, or waived due to changing circumstances; (iii) assess the need to restructure or reformulate the project and the effects of this on the immediate objectives (purpose) and long-term goals of the project; and (iv) update the project’s design and monitoring framework if restructuring or reformulation is necessary or its immediate objectives will change. The midterm review mission will be conducted in accordance with ADB’s Project Administration Instructions (PAI).
48. Within six months of physical completion of the Project, the EA (with support from the IA) will submit a project completion report (PCR) to ADB. ADB will then prepare its own PCR8 to evaluate the performance of the project to enhance transparency and accountability, and to learn from operation experience in the design and implementation of the project. These lessons are expected to be used to improve the design and performance of ongoing and future ADB-financed and administered projects. The PCR is validated by the Independent Evaluation Department (IED). The PCR: (i) provides a concise description of the project and its rationale; (ii) assesses the adequacy of preparation, design, implementation arrangements, and due
diligence, including how problems were identified and handled, whether they were foreseen as potential risks at appraisal, and the adequacy of the solutions adopted during implementation;
(iii) evaluates relevance of project design at appraisal and at completion, effectiveness in achieving outcomes and attribution to the project by assessing achievements of output targets including GHG emissions reductions, efficiency in delivering outputs, and sustainability of achieving output and outcome targets;
(iv) evaluates the performance of the recipient, executing entities, co-financiers (as applicable) and ADB;
(v) identifies remaining issues and lessons learned from the project; (vi) suggests follow-up actions if required; and
7 Project completion report format is available at: http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-
Sector-Landscape.rar. 8 The PCR will be prepared within 24 months (the preparation will start after 12 months if the project needs to see a
full year operation of the project to gauge the achievements of the outcomes) after project completion regardless of financial closure of the grant accounts. A project is complete when all its outputs are completed (i.e. when the project’s facilities are completed and ready to operate. If revenue streams are envisaged, then these should be occurring). The PCR can only be finalized and circulated to the Board after the financial closure of the grant accounts, including all co-financed products administered by ADB.
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(vii) makes recommendations—based on the evaluation and lessons learned—for future project design and implementation as well as improvements in related ADB procedures.
49. Within two years after the PCR is approved, ADB’s IED will evaluate and validate the PCR. Both PCR and IED’s evaluation report are rated as highly successful, successful, less than successful, or unsuccessful. To align with other Multilateral Development Banks like the World Bank Group weighting systems for ‘sovereign’ project ratings, equal weights are applied to the four evaluation criteria (relevance, effectiveness, efficiency, sustainability) that determine the overall success rate. Both PCR and IED’s evaluation report will be prepared in accordance with ADB’s (i) Guidelines for the Evaluation of Public Sector Operations and (ii) PAI.9
50. ADB will follow its project implementation processes and guidelines including reporting obligations under the AMA, and any additional terms that may be agreed in the FAA. D. Reporting 51. The PSC, with assistance from the PMU, will provide ADB with (i) quarterly progress reports in a format consistent with ADB's project performance reporting system; (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions; (c) updated implementation plan for the next 12 months; and (iii) a project completion report within 3 months of physical completion of the project. To ensure that projects continue viability and sustainability, project accounts and the executing agency AFS, together with the associated auditor's report, should be adequately reviewed. E. Stakeholder Communication Strategy 52. A communication strategy and participation plan has been prepared for the project. The communication strategy and participation plan indicate the types of information, the mode of communication, and the timing of communications to be conveyed to stakeholders regarding the project and its implementation. All communication will be in language suitable for the specific audience and will follow the ADB Public Communication Policy.
Kosrae Stakeholder Participation and Communication Plan No. Objectives Target
Stakeholders Messages
Agenda Means of
Communication Schedule / Frequency
Responsible Agencies /
Groups
Resources Reporting
SUBPROJECT 1: TOFOL GROUND AND ROOF-MOUNTED SOLAR CONSTRUCTION PHASE
1. Inform Kosrae residents about EPC contractor and about construction program, schedule, logistics, and outcome.
KUA customers and other island residents.
Project construction program, schedule, and outcome.
Email to KUA staff and to government offices and officials, then inform other residents by radio and by notices on bulletin boards and on billboards at construction sites.
Once in Q3 2020.
KUA, PMU, and EPC.
Email documents, posters, and billboards.
PMU.
9 (i)https://www.adb.org/documents/guidelines-preparing-performance-evaluation-reports-public-sector-operations, and (ii) https://www.adb.org/sites/default/files/institutional-document/33431/pai-6-07a.pdf.
32
No. Objectives Target Stakeholders
Messages Agenda
Means of Communication
Schedule / Frequency
Responsible Agencies /
Groups
Resources Reporting
2. Public awareness of EMP monitoring and GRM.
KUA customers and other island residents, NGOs.
EMP monitoring and GRM procedures.
Email to KUA staff and to government offices and officials, then inform other residents by radio and by notices on bulletin boards and on billboards at construction sites.
Once in Q3 2020.
KUA, PMU, and EPC.
Email documents, posters, and billboards.
EMP and GRM records and reports.
3. Ribbon cutting ceremony.
Kosrae community.
Summary of work done and outcomes.
Public ceremony. Once in Q4 2020.
KUA and EPC.
Ceremony. PMU.
SUBPROJECT 1: TOFOL GROUND AND ROOF-MOUNTED SOLAR OPERATIONS AND MAINTENANCE PHASE
1. Customer and local KUA staff feedback and error reports.
KUA customers and staff.
Feedback and error reports.
Verbal to KUA staff, written reports by PMU.
As necessary.
KUA, PMU, and EPC.
Pencil and paper and electronic records and reports.
KUA staff report to PMU, and PMU reports to EPC regarding any warranty work.
Yap Stakeholder Participation and Communication Plan No. Objectives Target
Stakeholders Messages
Agenda Means of
Communication Schedule / Frequency
Responsible Agencies /
Groups
Resources Reporting
CONSTRUCTION PHASE
1. Inform Yap Island residents about EPC contractor, works to be completed, construction schedule, logistics, and outcome.
YSPSC customers and other island residents.
Project construction program, schedule, and outcome.
Email to YSPSC staff and to government offices and officials, then inform other residents by radio and by notices on bulletin boards and on billboards at construction sites.
Once in Q3 2020.
YSPSC, PMU, and EPC.
Email documents, posters, and billboards.
PMU.
2. Public awareness of EMP monitoring and GRM.
YSPSC customers and other island residents, NGOs.
EMP monitoring and GRM procedures.
Email to YSPSC staff and to government offices and officials, then inform other residents by radio and by notices on bulletin boards and on billboards at construction sites.
Once in Q3 2020.
YSPSC, PMU, and EPC.
Email documents, posters, and billboards.
EMP and GRM records and reports.
33
No. Objectives Target Stakeholders
Messages Agenda
Means of Communication
Schedule / Frequency
Responsible Agencies /
Groups
Resources Reporting
4. Ribbon cutting ceremony.
Yap Island community.
Summary of work done and outcomes.
Public ceremony. Once in Q4 2020.
YSPSC and EPC.
Ceremony. PMU.
OPERATIONS AND MAINTENANCE PHASE
1. Customer and YSPSC staff feedback and error reports.
YSPSC customers and staff.
Feedback and error reports.
Verbal to YSPSC staff, written reports by PMU.
As necessary.
YSPSC, PMU, and EPC.
Pencil and paper and electronic records and reports.
YSPSC staff report to PMU, and PMU reports to EPC regarding any warranty work.
34
X. ANTICORRUPTION POLICY
53. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the project.10 All contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency and all project contractors, suppliers, consultants, and other service providers. Individuals and/or entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activity and may not be awarded any contracts under the project.11 54. To support these efforts, relevant provisions are included in the grant agreement/regulations and the bidding documents for the project.
XI. ACCOUNTABILITY MECHANISM
55. People who are, or may in the future be, adversely affected by the project may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make an effort in good faith to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.12
XII. RECORD OF CHANGES TO THE PROJECT ADMINISTRATION MANUAL
56. All revisions and/or updates during the course of implementation should be retained in this section to provide a chronological history of changes to implemented arrangements recorded in the PAM, including revision to contract awards and disbursement s-curves.
10 Anticorruption Policy: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf 11 ADB's Integrity Office web site: http://www.adb.org/integrity/unit.asp 12 Accountability Mechanism. http://www.adb.org/Accountability-Mechanism/default.asp
Appendix 1 35
PROJECT IMPLEMENTATION CONSULTANTS TERMS OF REFERENCE
A. Overview
1. The Federated States of Micronesia (FSM) consists of the Government of FSM (GoFSM) and the four states of Chuuk, Kosrae, Pohnpei, and Yap. GoFSM has requested Asian Development Bank (ADB) to finance energy projects for utilities in Kosraeand Yap, and to support institutional strengthening and capacity building for the utility in Pohnpei.1 The project is collectively referred to as the FSM Renewable Energy Development Project (FSM REDP). FSM REDP will be considered for financing by ADB in the 4th quarter of 2019. In anticipation of project approval by ADB, and in accordance with ADB advance procurement procedures, advance recruitment is being conducted for a Project Implementation Consultant (PIC). 2. FSM REDP includes infrastructure additions to Kosrae Utility Authority (KUA) and Yap State Public Service Corporation (YSPSC), and institutional strengthening and capacity building for Pohnpei Utilities Corporation (PUC). The PIC will conduct project management and administration, design audit, and construction supervision services for the infrastructure projects for KUA and YSPSC. A separate consultant will be recruited for the delivery of institutional strengthening and capacity building support to PUC. For all project components, the PIC will support the project implementing agency in administering the ADB grant, including preparation of periodic reports, reviewing and processing claims submitted by contractors, preparation of withdrawal applications, and other administrative functions necessary for the efficient implementation of the project. 3. Department of Finance and Administration (DOFA) of GoFSM will be the executing agency for FSM REDP. DOFA will be the recipient of the ADB financing. The Department of Resources and Development (DORD) of the GoFSM will be the implementing agency for FSM REDP. DORD will be the employer of the PIC, and for all contracts issued under the project. DORD will coordinate contract execution with the beneficiary utilities. A Project Steering Committee (PSC) comprising DOFA, DORD, KUA, PUC, and YSPSC (with ADB as an observer) will oversee project implementation.
4. GoFSM has requested ADB to be the procurement agent for recruitment of the PIC. These terms of reference have been prepared by ADB. ADB will evaluate bids for the PIC and submit a bid evaluation report to DORD for approval. 5. Under ADB’s project preparatory technical assistance TA 9242-REG, ADB recruited consulting firm Entura, of Australia, to prepare the FSM REDP. Entura has prepared the Feasibility Study (FS) for the KUA and YSPSC components of the FSM REDP. Entura’s scope of work includes preparation of Bidding Documents (BD) for the engineering, procurement, and constructtion (EPC) contracts for the KUA and YSPSC investments, and will support DORD in evaluation of bids. Advance action for procurement of contractors will take place concurrently with this recruitment of PIC. 6. It is planned that PIC and EPC contracts will be awarded when the FSM REDP project becomes effective in the 1st quarter 2020. The FSM REDP is to be implemented over 3 years.
1 The three state owned utilities under FSM REDP are Kosrae Utility Authority, Pohnpei Utility Corporation, and Yap
State Public Services Corporation. Investments in Chuuk Power Utility Corporation are included in a separate program.
36 Appendix 1
B. Federated States of Micronesia Renewable Energy Development Project
7. The project in Kosrae includes 1.15 megawatt (MW) of ground-mount and roof-top solar photovoltaic (PV) on KUA’s main grid. This will be integrated with a World Bank-financed battery energy storage system (BESS) that is also being planned for KUA’s main grid. The project will also include a hybrid PV-diesel mini-grid and solar-home-systems in Walung village, a remote part of Kosrae island. Investments in Walung will include 60 kW of PV, a 30 kW diesel generator, a 30kW/160kWh BESS, and multiple 2.5 kW/4kWh solar home systems. One single engineering, procurement, and construct (EPC) contract will be awarded for investments in Kosrae state. 8. The project in Yap state includes (i) approximately 300 kW of roof-top PV on the Yap Sport Center, 1.7 MW of ground-mount PV, and (ii) an 800 kW/800 kWh BESS. The project will be integrated with a World Bank-financed diesel generator project (a redundant 825 kW high-speed genset). A single contract will be awarded for these investments for YSPSC. Additionally, a sole-source contract will be awarded to Vergnet SA for an upgrade to the proprietary Hybrid Wizard system integration master control module that was installed under an earlier ADB-financed project (the Yap Renewable Energy Development Project.2 C. Terms of Reference 9. The overall objectives of this TOR are to:
(i) Assist DORD in implementing FSM REDP. Provide project management secretariat services to DORD and PSC. Monitor project progress and advise on remedial measures as required. Monitor project expenditure and disbursement. Assist DoRP in preparing withdrawal applications for submission to ADB. Prepare overall FSM REDP progress reports.
(ii) Conduct project management, design audit, and construction supervision of the contracts entered into under the project to include:
a. Review contractors’ project implementation schedule(s); b. Review the contractors’ detailed designs to ensure compliance with
specifications; c. Review the contractors’ equipment selection and manpower allocations; d. Attend and review tests of materials prior to their use; e. Inspect and witness key milestones during project implementation; f. Assess commissioning procedures and witness as appropriate; g. Attend Factory Acceptance Tests as agreed with the DORD; h. Review the contractors’ operation and maintenance (O&M) manuals; i. Assess claims submitted by the contractors; j. Review the contractors’ operations and maintenance programs developed; k. Develop O&M training programs and O&M procedure manuals l. Review, update and monitor implementation of the environmental
management plan (EMP) and report to ADB semi-annually on progress and any corrective actions undertaken or revisions to EMP implementation for the subprojects;
m. Review, update and monitor implementation of the resettlement plan (RP) and report to ADB semi-annually on any corrective actions undertaken or revisions to RP implementation for the subprojects;
2 https://www.adb.org/projects/44469-013/main
Appendix 1 37
n. Prepare programs to facilitate development of gender strategies; o. Assist the DORD and the FSM Department of Finance and Administration (the
project’s Executing Agency) with project financial management and reporting; p. q. Preparing project performance monitoring and assessment procedures; r. Support the DORD in the development, implementation and monitoring of a
Stakeholder Communication Strategy; s. Provide occupational health and safety trainings for workers and the
community; t. Assist and provide inputs to ADB missions.
(iii) Conduct Capacity Building of KUA and YSPSC as follows: a. Project Implementation: All specified experts will provide on the job training
covering their respective specialties to utility staff addressing best practices in project implementation;
b. Operation and maintenance (O&M): The specified expert will review O&M procedures and practices and organizational arrangements with emphasis on generation O&M of small hybrid systems, and will develop O&M training programs and manuals to supplement O&M training provided by EPC contractors;
c. Gender Organization Development: The specified expert will review human resource practices, work practices, and recruitment procedures to increase attractiveness for female workers and increase gender balance.
D. Terms of Reference of Specified Experts
10. The experts’ tasks and qualifications is in Table 1.
Table 1: Expert Tasks and Qualifications # Expert Tasks Qualifications
1 Solar Energy Expert and Team Leader:
Project Manager Tasks (i) Prepare the detailed work program and
implementation schedule; (ii) Monitoring the financial performance of the project; (iii) Assess Contractors’ claims; (iv) Coordinate the input and activities of the consultant
team (v) Review Contractors’ project implementation
schedules; (vi) Assist the DORD in management of project
budget;. (vii) Develop a project performance monitoring system; (viii) Prepare periodic progress reports and a project
completion report in ADB formats. Solar Energy Expert Tasks (i) Review existing documents and data relating to all
subprojects; (ii) Review the contractors’ engineering design,
documentation, equipment selection and test program;
• A graduate degree in engineering
• Substantial experience in renewable energy infrastructure development projects
• experience with installation of middle and low voltage grid connected solar photovoltaic systems on small grids systems
• Experience in Pacific region and familiarity with ADB’s procurement, disbursements, and project monitoring requirements is desirable.
38 Appendix 1
# Expert Tasks Qualifications
(iii) Review the proposed material by the contractors used in construction/fabrication work and ensure that they comply with specifications;
(iv) Review contractors’ plans for pre-commissioning, test-run, and final acceptance procedure;
(v) Develop an operation and maintenance (O&M) strategy
2 Electrical and Control Systems Engineering Expert
(i) Review existing documents and data relating to all subprojects;
(ii) Review contractor power system studies; (iii) Review contractors process, procedures and
design for grid connection, grid synchronization and protection to ensure compliance with employers’ requirements;
(iv) Review contractors’ concept designs, construction materials and the construction process;
(v) Attend and review the material tests; (vi) Assist in the supervision of construction; (vii) Review the O&M training programs and O&M
procedure manuals provided by EPC contractors and design O&M training programs and guidelines for the utilities;
(i) Assess testing and commissioning processes; (ii) Undertake site visits to establish project progress
and effectively monitor project progress and assess the contractor’s claims;
(iii) Witness testing and commissioning.
• a graduate degree in engineering;
• Substantial experience in electrical systems and control and instrumentation engineering to include renewable energy project, small hybrid power systems and mini-grid projects.
3 Battery Energy Storage System (BESS) Expert
(i) Review the contractors’ BESS designs; (ii) Supervise installation of BESS to ensure effective
integration, training, and efficient operation of the electrical system;
(viii) Review contractors’ concept designs, construction materials, and construction process;
(ix) Attend and review the material tests; (x) Assist in the supervision of construction; (xi) Review the O&M training programs and O&M
procedure manuals provided by EPC contractors and design O&M training programs and guidelines for the utilities;
(iv) Assess the testing and commissioning processes; (v) Undertake site visits to establish project progress
and effectively monitor project progress and assess the contractor’s claims;
(vi) Witness testing and commissioning.
• a graduate degree in engineering
• Substantial experience to include integration of BESS into a high penetration renewable energy system
4 Civil / Structural Expert
(i) Review existing documents and data; (ii) Review contractors’ concept designs, detailed
designs, and drawings; (iii) Review the proposed construction materials and
the construction process proposed by contractor(s); (iv) Coordinate with DORD to provide supervision of
site civil and structural works at key milestones,
• A graduate degree in civil or structural engineering.
• Substantial experience to include construction of PV arrays in remote locations
Appendix 1 39
# Expert Tasks Qualifications
including documenting evidence to support progress claims;
(v) Assist DORD in monitoring compliance with soil and erosion control measures as per the approved construction environmental management plans;
(vi) Review and approve any changes proposed by the contractors from the original design based on site conditions;
(vii) Contribute to periodic and other required reporting; (viii) Prepare Design Review/Acceptance reports, Test
Reports and Site Records.
• Experience of the Pacific region is desirable.
5 Environment Specialist
i. Monitor the environmental management plan (EMP) and prepare required semiannual reports.
ii. Guide and assist DORD on any corrective actions for EMP implementation and revisions for subprojects;
iii. Review and update the initial environmental examination (IEE) report, the feasibility study, State Government consents and other relevant reports for all subprojects;
iv. Evaluate environmental impacts of the contractors’ detailed design and intended construction methods for all subprojects and recommend environmentally-friendly options for the design and construction, which emphasizes (a) biodiversity conservation, (b) public health and safety, (c) physical cultural resources, (d) pollution prevention and abatement, and ensure those aspects are documented and reported per the IEEs and EMPs;
v. Raise awareness on all aspects of environmental assessment and management as required by the National and State Governments and ADB;
vi. Ensure compliance of project implementation with the ADB's Safeguard Policy Statement, 2009, and National and State Government laws and regulations;
vii. Review contractors’ construction environmental management plan (CEMP) and ensure that it complies with the IEE and EMP, conditions of State Government consents and all contractual and environment safeguard requirements;
viii. develop and implement a detailed monitoring plan for CEMP implementation and undertake regular compliance monitoring to ensure all works implemented are in accordance with the approved CEMP;
ix. Working with DORD, the state utilities and contractors, recommend corrective actions where monitoring identifies non-compliance with the CEMP;
x. Assist DORD in review of contractors’ monitoring reports;
xi. Report on monitoring results, particularly CEMP implementation, effectiveness of environmental
• a graduate degree in environment or relevant field
• Substantial experience in environmental assessment and monitoring
• Experience in the Pacific region is desirable.
40 Appendix 1
# Expert Tasks Qualifications
impact mitigations and corrective actions in: (a) inputs to project quarterly progress reports; (b) semi-annual safeguards monitoring reports (SMR) as well as the project completion report as required by ADB.
6 Social Safeguards Specialist
(i) Monitor overall project implementation in order to identify any unanticipated social risks, resettlement impacts, and/or sensitive gender impacts. If such risks and/or impacts eventuate, adjust, adapt, and/or develop and facilitate implementation of appropriate mitigation measures including revision of the Resettlement Plan as necessary;
(ii) Monitor and ensure project compliance with ADB Safeguard Policy Statement (2009) regarding land acquisition and resettlement, with the project Resettlement Plan, National and State Government laws, and with the project’s Stakeholder Participation and Communication Plans for Yap and Kosrae;
(iii) Monitor any grievances relevant to social, land, resettlement, and gender issues and the measures implemented to address those grievances in a timely and appropriate manner;
(iv) Assist DORD to prepare quarterly progress reports and semi-annual safeguard monitoring reports as well as the project completion report as required by ADB.
• a graduate degree in social science, and/or other relevant field
• Substantial relevant professional experience
• Experience in the Pacific region and with government agencies on similar donor funded projects is desirable.
7 Organization and Gender expert
(i) Carry out gender institutional study, focusing on existing policies regarding human resources, harassment, maternity leave, and other policies that can enable and support gender transformative change at KUA and YSPSC;
(ii) Prepare programs and workplans to develop and implement gender strategies that broaden the available pool of technical and trade expertise and to attract and retain personnel to increase gender balance and representation in the workforce;
(iii) Conduct outreach activities to increase awareness of career opportunities for women, including profiling of women STEM role models, in the utility sector;
(iv) Monitor and report project gender progress indicators and results;
(v) Carry out a gender needs assessment focusing on economically poor households, women headed households, vulnerable groups, identification of women headed households, and identify gender-inclusive and socially inclusive provisions of the project enabled by solar power generation at the household and community level, including possible corporate social responsibility projects such as supporting new income generation opportunities for
• A social science graduate with qualification/expertise in gender analysis • Substantial professional experience • Experience in organizational development and gender mainstreaming
Appendix 1 41
# Expert Tasks Qualifications
women, the creation and/or support of women’s groups, etc.
8 Operations and Maintenance Expert
(i) Review current status of utility assets, performance measures, monitoring compliance and reporting;
(ii) determine target performance measures and monitoring compliance and reporting procedures to meet targets;
(iii) Recommend appropriate O&M organizational structure and design O&M training programs and guidelines for the utilities;
(iv) develop an Asset Management Strategy that supports the desired asset performance;
(v) Identify options for improvements of plant and equipment including energy efficiency measures in accordance with the Asset Management Strategy;
(vi) Identify critical points of failure and redundancy within the energy production system to assist with planning of operations and maintenance, in accordance with the Asset Management Strategy.
• A graduate engineer
• Substantial professional experience
• Experience to cover O&M of small hybrid power systems
• Experience in the Pacific region is desirable.
11. The PIC level of effort is in Table 2.
Table 2: PIC Level of Effort
Number of Experts
Specialist (in person months)
International National
1 Solar Energy Expert (Team Leader) 8.0
2 Electrical & Control Systems Expert 7.0
3 Battery Energy Storage Systems Expert 3.0
4 Civil /Structural Expert 2.0
5 Environment Specialist 2.0
6 Social Safeguards Specialist 2.0
7 Organizational (Gender) Development Specialist 2.0
8 Operations and Maintenance Expert 3.0
Total 29.0 Note: International experts should spend at least 60% of billable time in FSM which will be mainly in Kosrae and Yap with time in Pohnpei to attend PSC meetings and coordinate with DORD.
12. The PIC will deliver the following reports, simultaneously to all members of the PSC and to ADB:
(i) Inception Report. This shall be submitted within one month after the Inception Mission. It shall contain the updated implementation plan, schedule of personnel deployment, and detailed approach and methodologies for implementation. An inception workshop will be conducted with DORD, Contractor(s) and ADB within 4 weeks from notice to proceed to discuss the proposed program of activities and to seek feedback on improvements, which will be reflected in the inception report;
(ii) Monthly Progress Reports. This shall be submitted by the end of the first week of the succeeding month during the consulting service period. This shall contain (i) the latest progress status against the targets set in the initially agreed implementation plan in
42 Appendix 1
the inception report, (ii) justification for any major variations (iii) mitigation measures to minimize any further variations;
(iii) Semi-Annual Safeguards Monitoring Reports. This shall be submitted every 7th month covering the previous six months during the consulting service period. These reports are required to be prepared in accordance with ADB’s Safeguard Policy Statement (2009).
(iv) Interim Report. This shall be submitted 12 months after Notice to Proceed. This shall contain achievement of the project in relation to the targets set in the TOR and agreed implementation plan. It shall include key findings of project-supported workshops, and key progress, monitoring and evaluation data to enable overall project monitoring;
(v) Final Report. This shall be submitted one month prior to the end of the assignment, including accomplishments under the project, challenges faced, and lessons learned and comparison between estimates vs. actual outputs - for instance, technical, financial, economic, and environment and social safeguards, etc. Following submission, a final review workshop will be conducted with relevant government agencies, stakeholders and ADB. The final workshop will summarize the final report.
(vi) O&M: Strategy report on development of O&M practices and procedures (vii) Gender: Strategy report on development of human resource practices to increase
gender balance. (viii) For each construction contract, the PIC shall submit:
a. Design Review/Acceptance Report. This shall be submitted within one month after each turnkey contractor submits the detailed design. This shall contain (i) key assessments of detailed designs; and (ii) recommendation for acceptance.
b. Test Reports. For each construction contract, the following test reports shall be prepared and submitted within one month after each test. o Mechanical Completion Test and Supervision Report; o Inverter Commissioning Test Report; o Performance Test (Acceptance Test) Report; o Provisional Acceptance Report; and o Final Acceptance Test Report
c. Site Records. At the completion of the construction stage, the PIC shall provide to the Employer a full detailed set of all site records. This shall include, as a minimum, all site reports, materials approvals, test records, photographs, instructions, variations, inspection certificates, etc. The information shall be provided in paper and electronic (PDF) format.
Appendix 2 43
FSM NATIONAL PROJECT COORDINATOR TERMS OF REFERENCE
1. The FSM National Project Coordinator will provide project management unit services for overall project administration, and will report directly to the Assistant Secretary of Energy. Duties will include:
• Work with the Project Steering Committee (PSC), and beneficiary utilities, to progress the implementation
• Coordinate between development partners and FSM project stakeholders;
• Assist PSC and beneficiary utilities to implement Stakeholder Communication and Consultation Plan including assistance with community consultation and any record keeping required;
• Identify issues and roadblocks to the implementation of the project and recommend potential solutions
• Assist DORD to monitor progress, reporting regularly on action necessary to mitigate potential delays in project implementation;
• Assist the DORD and Department of Finance and Administration to prepare project audited financial reports
• Provide management, financial, and administrative support to DORD;
• Prepare a financial management assessment of the Department of Finance and Administration (the Executing Agency);
• Provide support to the PSC including coordination and scheduling of PSC meetings, including management of PSC meeting expense budgets
• Track lessons learned and develop recommendations for efficient implementation of projects
• Assist the DORD to prepare periodic progress reports and safeguard monitoring reports, as well as the project completion report as required by ADB;
• Act as local liaison for the PIC, including:
o facilitate logistics of the PIC team; o identify and collect existing data, reports and documentation to fulfil data
requests of the PIC team; o manage work schedule in conjunction with PIC Team Leader and DORD
2. Working under the guidance of the international safeguard expert(s), the FSM National Project Coordinator will work closely with DORD to:
• Supervise safeguard activities by contarctors
• Ensure compliance with environmental and social safeguard provisions of the project
• Assist DORD in preparing monthly and semi-annual safeguard monitoring reports
3. Qualifications:
• A bachelor level qualification in engineering, business administration, or other relevant field
• 10 years of professional experience
• Experience in Pacific region and with donor programs and energy sector is desirable
44 Appendix 3
SUPPLEMENTAL MANAGEMENT OPERATIONS CONSULTANTS
(for Pohnpei Utilities Corporation)
TERMS OF REFERENCE A. Introduction 1. Pohnpei Utilities Corporation (PUC) provides electricity, water, and sewer services on the island of Pohnpei, one of the four states of the Federated States of Micronesia. Pohnpei has an area of approximately 340 square kilometers with a population of 34,000. PUC serves 7,300 electricity customers, 4,000 water customers and 800 sewer customers. PUC is owned by the Pohnpei state. Regulation is performed by a state appointed utility board. 2. PUC generation assets consist of diesel generating units with installed capacity of 13 megawatt (MW) and renewable energy generating units (hydro and solar) of 1.9 MW. An independent Power Producer supplies PUC from a 2.2 MW diesel plant. PUC’s medium voltage distribution network consists of 13.8 kV line circling the island. 96% of the population has access to electricity.
3. PUC’s financial performance is poor. This is due to high cost of imported diesel, income from electric sales being used to cross subsidize water customers, and electric tariffs, while high, not reflecting full costs, and high losses. Quality of electricity supply is poor due to low availability of diesel generators. 4. In 2018, World Bank (WB) approved its sustainable energy development and access project1 which includes $7.5 million investment in new diesel generation and $1.4 million in network strengthening.
5. In 2019, Asian Development Bank (ADB) provided technical assistance (TA 9425) to PUC to identify reforms to improve utility performance. The final report2 sets out a series of recommendations covering regulatory, institutional, organizational, financial and technical areas which include including capacity building measures and capital investments. 6. The SMO project, for which this TOR refers, is designed to implement a subset of the recommendations from TA 9425. Other recommendations will be implemented in later projects as funding becomes available. The SMO project could be extended during its execution should funding become available and the parties so agree.
B. Approach and Key Tasks
7. The Consultant will embed a team (the Team) of consultants in PUC organization who will work closely with PUC staff in implementing priority reforms in the shortest timescale. The Team will be based in PUC headquarters and will address training and knowledge transfer as key cross cutting aspects of delivering the SMO outputs.
1 http://documents.worldbank.org/curated/en/728181544410842280/Micronesia-Sustainable-Energy-Development-
and-Access-Project 2 Report available upon request from ADB.
Appendix 3 45
8. Noting that the WB project will address generation, the SMO project will focus on (i) Quality of Service and Reliability, (ii) Energy Losses, and (iii) Customer and Financial Information Systems. 9. The Team will review recommendations from the TA 9425 report and implement key selected recommendations as agreed with PUC management while considering available investment capital. Summarized recommendations from TA 9425 report under the three key areas are set out in table 1.
Table 1: Summarized Recommendations under Key Areas
Key Area
Recommendations
Losses
• Implement a system metering project at power stations and throughout the distribution system to quantify energy deliveries throughout the system, down to the level of each distribution transformer.
• Currently, out of the total 1,085 lights, only 155 streetlights are billed on a monthly basis. Revise the street lighting policy to (1) expedite the conversion of all lights to LED, (2) bill and collect for every light every month (or disconnect the light), and (3) include the estimated consumption in the energy balance.
• Replace customer meters over time with AMI meters (pre-paid and post-paid) to provide for monitoring consumption and detecting energy losses/theft.
• Map all customers to transformers and to feeders to enable PUC to measure in real time the losses on each transformer and facilitating the identification of losses.
• Relocate customer metering points and secure meters as necessary to enable PUC to visibly identify unauthorized connections.
• Establish a Revenue Protection function within a newly established Internal Audit unit and fund the cost of its required equipment.
• Incorporate non-technical loss reduction KPIs into the budget process, thereby giving management the incentive to reduce the losses.
Finance and IT
• Since the accounting system is closed only at year end, PUC does not have timely information for management information and cost control. We recommend that the system be closed on quarterly basis beginning in FY 2019 and, within two years, closed on a monthly basis.
• Bank reconciliations must be completed at least monthly. PUC is generally several months behind, which is concerning given the cash shortage at PUC.
• Since PUC accounting currently provides for an update of the materials and supplies inventories on an annual basis only, we recommend that the system be updated at least monthly to provide operations personnel with the current status of parts and supplies.
• The General Ledger System (Sage 100) and its component modules are appropriate for PUC, however Instead of some installed modules, PUC uses Excel applications. We recommend that PUC utilize the other accounting system modules licensed to PUC including Accounts Receivable, Bank Reconciliation, Fixed Assets, Human Resources, and Crystal Reports.
• For the Fixed Asset Register we recommend: (1) Update of the distribution fixed asset information with the results of the Network Inventory Initiative when completed, and (2) Utilization of the Sage Fixed Asset Module for FA accounting, which can provide automatic feeds to the GL System, as opposed to the informal Excel spreadsheet currently being used.
46 Appendix 3
• Training of PUC personnel by the software vendors to enable them to utilize the capability of the accounting and reporting systems.
• To overcome some of the issues identified above, we recommend that the software vendor be contracted to come to Pohnpei to work with PUC finance and IT personnel to (1) install the most recent version of Sage, (2) implement the modules not being utilized, and (3) audit and clean the Sage databases to eliminate unused and extra data that accumulated over time.
• Obtain the training courses for the various Sage modules and have the appropriate employees complete them.
With respect to the budgeting process, the following recommendations are made:
• The Generation Department must develop an annual generation forecast to maximize PUC generation and minimize Vital generation, based on least cost.
• Incorporate non-technical loss reduction KPIs into the budget to provide management with the incentive to reduce those losses.
• …analysis of the customer systems indicates that the existing systems (Suprima for pre-paid and Utility Star Platinum for post-paid customers), are appropriate for PUC. However, several initiatives are necessary to produce meaningful management information, including auditing and cleaning of the databases to remove erroneous information, population of unused fields to facilitate accurate reporting, and utilization of the Accounts Receivable Module of the GL system to consolidate reporting of all customer information. In addition, we recommend that PUC obtain the training courses for the customer systems and require the appropriate employees to complete them.
• Recommendations with respect to other IT systems include:
− Acquisition and implementation of a new Procurement System
− Utilization of the Human Resource Module, which PUC currently has a license for.
− Obtain a new license for ArcGIS software for mapping.
Quality of Service and Reliability
• Conduct a comprehensive inventory of the assets and their characteristics (GPS location, size, capacity, condition, etc.).
• Map all customers to transformers, and then to feeders, to enable PUC to measure, in real time, the losses on each transformer and facilitate the identification of losses.
• Relocate customer metering points and secure the meters as necessary to enable PUC to visibly identify unauthorized connections.
• Perform energy accounting each month and incorporate non-technical loss reduction KPIs into the budget process.
• Disconnect customers for energy theft and for non-payment.
• Convert all streetlights from Mercury Vapor to LED.
• Implement the proposed distribution network projects included in the proposed Investment Program in Section 10 (protection system, breaker/recloser automation, AMI system metering at 400 nodal points, Metering Management System (MMS), and AMI metering for 100 Large Customers, etc.).
• Over time, replace existing customer meters with AMI meters.
Appendix 3 47
• With respect to system control, ability to dispatch the system, and response to network interruptions, the following recommendations are made as part of the Investment Program:
− Install commercial-grade metering on all generators (diesel, hydro, and solar).
− Implement the proposed investment projects (generation metering, generation and distribution dispatch, telecommunication system, SCADA, etc.).
− Automate the operation of the hydropower plant.
− Implement Initial Supervisory Control and Data Acquisition (SCADA) project for Dispatch monitoring.
− Implement the Relay Protection for Generators and Large transformers.
− Implement the Special Network Protection Scheme.
− Implement the automation of breakers/reclosers.
− Install commercial-grade fuel flow meters for each diesel generator.
C. Task and qualifications of experts
10. Expert tasks and qualifications are in table 2.
Table 2: Expert Tasks and Qualifications
# Expert Tasks Qualifications
1 Team Leader(1) and Distribution Engineer
Project Manager Tasks (i) Review project tasks and objectives with
PUC (ii) Prepare work plan to implement agreed
tasks (iii) coordinate team activities (iv) Prepare inception, monthly progress, and
final reports
Distribution Engineer Tasks (vi) Review existing documents and data (vii) Prepare asset register (viii) Identify required capital expenditures over
10 year horizon. (ix) Implement agreed investment projects (x) Advise PUC on good utility practice and
recommend management and procedural reforms as appropriate
(xi) Assist PUC in implementing reforms
• A graduate degree in engineering
• Substantial experience in operations of distribution networks.
• experience with diesel generation and small power systems is desirable.
2 Finance Specialist
(i) Review existing documents and data (ii) Advise PUC on good financial practice and
recommend management and procedural reforms as appropriate
(iii) Identify Management Information System (MIS) to produce required financial reports
(iv) Advise and assist PUC to prepare financial accounts with target of monthly reports.
• A chartered accountant
• Substantial experience in operations of utility networks.
• Experience with small utilities is desirable
48 Appendix 3
(v) Prepare proforma financial accounts to support tariff applications.
(vi) Advise on appropriate internal audit function.
3 Loss Reduction Specialist
Working under direction of the distribution engineer, the technician will (i) Quantify commercial losses and propose
time bound targets for loss reductions. (ii) Propose approaches to identification and
reduction of commercial losses. (iii) Prepare work procedures for loss reduction. (iv) Train PUC teams in implementing agreed
programs
• An electrician/ technician with internationally recognized vocational qualification in electricity.
• Substantial experience in utility distribution networks.
• Direct experience of commercial loss reduction project.
•
4 Information Technology Specialist (IT)
Working under the direction of the finance and distribution specialists, the IT specialist will: (i) Review PUC existing Enterprise Resource
Planning (ERP) systems and advise on IT strategy to meet PUC’s management, financial and operational needs.
(ii) Existing and New systems/ modules to be assessed should include
a. Asset Management b. Work management c. Customer System, d. Procurement, e. Payroll, f. Human Resources, g. Work management
(iii) Recommend systems/ modules to be procured. Assist in procurement.
• A Information technology specialist qualified to university degree level in computer science or equivalent.
• Substantial experience in implementing Enterprise Resource Planning software systems.
All All The Team will: (i) provide training and knowledge transfer
to PUC staff as an ongoing activity during the execution of the project.
(ii) Be a resource to PUC and will provide advice and guidance to PUC on all aspect of distribution operations as called for by PUC while being within the Team’s areas of competency.
Note: Bidder my choose team leader to be either Distribution Engineer or Finance Specialist.
D. Consultant Level of Effort
11. The consultant level of effort in is table 3.
Table 3: Consultant Level of Effort
# Expert Person Months (all months to be spent in
Pohnpei)
1 Distribution Engineer 9
2 Finance Specialist 9
3 Loss Reduction Expert 3
4 Information Technology Specialist 4
Appendix 3 49
B. Consultant Deliverables 12. Consultant deliverables are in table 3.
Table 3: Consultant Deliverables
# Report Delivered months after contract start
1 Inception Report: 1
2 Monthly Progress Report monthly
3 Key Area Report: Quality of Service and Reliability
Draft and Final as per Inception Report
4 Key Area Report: Loss Reduction Draft and Final as per Inception Report
5 Key Area Report: Finance and IT Draft and Final as per Inception Report
6 Final Report 12
C. Consultant Contract 13. The contact will be input based. 14. The Department of Resources and Development of the Government of Federated States of Micronesia will be the Employer. 15. PUC will provide office space and local transport for consultant staff.