Annual Report 2011

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011
LETTER TO THE MINISTER

The Honourable Minister for Works,
Transport & Public Utilities
Level 4, Nasilivata House
Ratu Mara Road, Samabula,
Suva
Dear Minister,
Annual Report 2011
I am pleased to present the Fiji Electricity Authoritys Annual Report for 2011. The report provides a
detailed summary of FEAs performance in accordance with Section 25 of the Electricity Act Cap 180.
FEA made a financial profit of $51.9M after tax in 2011, which includes a net income tax benefit of
$13.9M due to restating the Deferred Tax Liability and Future Income Tax Benefit to factor the reduction
in corporate tax rate from 28% in 2011 to 20% in 2012.
Construction of the US$150M Nadarivatu Renewable Hydro Power Project progressed positively in 2011
and approximately 90 per cent of the construction work has been completed by the year end. The project
is expected to be fully commissioned by the end of June 2012.
This project is a major step towards achieving the Authoritys renewable energy target of generating 90%
of its energy through renewable resources by 2015.
The Authority continued to meet all its obligations and fulfill all its responsibilities whilst also continuing
with the efficient operation of the power system.
On behalf of the Members of the Authority, I take this opportunity to thank the Government for its
continued support and look forward to the same in 2012 and beyond.
Sincerely,
Nizam-ud-Dean
Chairman
The Honourable Prime Minister, Commodore Josaia Voreqe Bainimarama, at the

opening of the Rural Electrification Scheme at Waidina and Viria, Naitasiri. This
is FEA and Governments corporate social responsibility to ensure that the rural
communities also receive electricity.
KEY OUTCOMES FOR 2011
FEA recorded a profit after tax of $51.9M in 2011, which

includes a net income tax benefit of $13.9M due to restating
the Deferred Tax Liability and Future Income Tax Benefit
to factor the reduction in corporate tax rate from 28% in
2011 to 20% in 2012. The profit after tax is equivalent to a
Return on Shareholders Fund (ROSF) of 11%.
is expected to be fully commisioned by the end of May

2012. This project is being carried out at a cost of F$9.2M
with a payback period of 2 years and thereafter resulting in
a reduction in fuel cost.
Completed the design of the single circuit new 33kV Vuda
- Pineapple Corner overhead line and the design of the
substation extension at Pineapple Corner Zone Substation
in Lautoka.
The profitability enabled FEA to carry out Capex works

totalling $112M and repay matured bonds of $17M.
FEA met all the Financial Covenants signed with lenders
for 2011. This ensured that Government being the
sovereign Guarantor of the FEA Loans was not exposed.
FEA completed the design of the double circuit new

33kV Vuda - Waqadra overhead line and the design
of the substation extensions at Waqadra & Vuda Zone
Substations.
FEA successfully negotiated the conversion of the

US$30M loan (bridging finance for Nadarivatu Hydro
Project) into a Fijian Dollar loan with ANZ bank in 2011
at favourable USD exchange rates resulting in a realized
foreign exchange gain of around $1M. This contributed to
the profit achieved for 2011.
The following major zone sub-stations which will cater for

future demand and improve the reliability of the power
supply in the Nadi district and Suva-Nausori corridor
were constructed and commissioned at a cost of around
F$34M:
FEAs gearing ratio at the end of December 2011 was

41.3% which is within the international benchmark for
power utilities of not more than 45%.The gearing ratio has
been maintained at this level despite the increase in Capital
Expenditure (CAPEX) for the year.
Kinoya Zone Substation in Suva
Qeleloa Zone Substation in Nadi
Komo Park Zone Substation in Suva and
The shareholder value of FEA increased from $419.9M as

at the end of 2010 to $472.0M as at the end of 2011.
Nausori Zone Substation
As a result of stringent cost control measures implemented

by management throughout the year, FEA achieved a
saving of $4.1M in its operating expenditure (OPEX) when
compared to budget. This contributed to the profitability
recorded for the year.
FEA was able to successfully negotiate a settlement of a
major Insurance Claim for the repair of a 10MW Heavy
Fuel Oil (HFO) generating plant in Kinoya for F$12.2M.
As part of the settlement, FEA acquired 7 x 1.6MW new
Diesel Generator sets at a cost of only F$2M.
FEA was able to renew its material, business interruption
and sundry insurance policies at reasonable premiums
despite the tough and volatile insurance market.
The Cabinet and the Commerce Commission approved
Phase 3 of the Tariff Increase was implemented with
effect from 1 April 2011.This affected the Commercial and
Industrial Customers only.
Nadarivatu Hydro Project was 90% complete at the end of
2011 and the project is expected to be fully commissioned
by June 2012.
The conversion of the 2x6 MW Industrial Diesel Oil
(IDO) generating sets to run on cheaper Heavy Fuel Oil
(HFO) at the Vuda Power Station was 66% complete and
FEA completed the peer review of the design of the

Wainisavulevu Weir Raising Project in 2011 and signed a
contract with Sinohydro Corporation for the construction
of this project. The total contract is in FJD currency and
does not expose FEA to any foreign currency movements.
FEA has obtained a F$20M loan from ANZ to fund this
project. The total cost of the project is estimated to be
around F$27M.
FEA spent $9.33M on rural, commercial/industrial and
power system reinforcement projects. A total of 5922
domestic customers and commercial/industrial customers
were approved for connection in 2011.
Upgrading of Power System Protection Scheme for the
existing Monasavu Hydro Scheme was completed at a
cost of around $2.3M in order to align with the state of
art protection scheme installed for the Nadarivatu Hydro
Power project.
FEA spent $1.2M to upgrade its old 11kV switchgear at
Korolevu zone sub-station. This will ensure reliability of
power supply to customers in that area which includes
prominent hotels.
FEA carried out the review of the entire FEA Power System
Electrical Protection facilities at a cost of $0.5M to ensure
safe and reliable operation of the power system.
The peer review of the feasibility studies for the Wailoa
Downstream Hydro Project was carried out and a

preliminary report was submitted by the Consultant
in December 2011. The final report is expected to be
forwarded to FEA by June 2012. This will then determine
the best way forward to develop this project.
Conducted a feasibility study to determine the viability
of developing a Hydro Project in the upper Navua River.
Preliminary Report has been received and the full report
will be submitted to FEA by the consultant in June 2012.
Achieved around 17% reduction in unplanned power
outage duration as compared to 2010.
Achieved a record high ICT up time system performance
of 99.976%.
Fully complied with all the statutory requirements related
to the Corporate Performance of FEA.
Completed the Project Design Document (PDD) for the
Nadarivatu Hydro Project to obtain carbon credit and the
Clean Development Mechanism (CDM) validation process
is in progress and was 95% complete by the year end. This
process will be fully completed in early 2012.
Fully complied with the Essential National Industries (ENI)
Employment Decree by offering Employment Contract
Terms and Conditions to employees who are no longer
classified as workers under the decree and successfully
negotiated two Collective Agreements (Staff and Trade
Persons) for employees who are defined as workers
under the decree and can join a Bargaining Unit (BU). All
HR Policies and Procedures are now aligned to the ENI
Employment Decree.
Completed a comprehensive review of the Organisations
Top Business Risks and the implementation of the
formulated strategies to mitigate the risks which has
resulted in the improvement of the risk level of 13 top
business risks by at least one level.
Reviewed the Board and Employee Code of Conduct
and aligned the same to the Crimes Decree and the ENI
Employment Decree.
Successfully reviewed all the consumer security deposits
to ensure compliance with the Electricity Act and mitigate
any potential future bad debts write off. The required
increase in deposit have been equally spread over a period
of 6 months from November 2011 to April 2012.
Successful dissemination of information regarding FEA
operations utilising all forms of media, presentations to
schools, settlements, communities and other organisations.
Obtained approval for the land use at Nubuiloa Repeater
Station. This will improve the RT communications in
Vanua Levu and some dark spots in Viti Levu. This RT

communication site is very essential to FEAs operations.
Achieved the following HSE Performance when compared
to set targets:
Achieved Target
Fatality
Lost Time Injury

Frequency (LTIF )
4.8
5
Nil
Nil
Conducted a review of the Organization Structure of FEA

and established the optimum organization structure.
Completed a comprehensive HR Development Plan and
have started to implement retention strategies, training
and succession planning. All positions in FEA now have
two or three possible successors.
FEA was awarded the PRIZE level Recognition in the Fiji
Business Excellence Awards. FEA is the only Organization
in Fiji which applied for and received the PRIZE level in its
first year.
FEA acquired way leaves, finalized the design and
purchased land for the three zone substations in Vanua
Levu to extend power supply to Dreketi. The orders for the
purchase of materials for the 33kV transmission line from
Labasa to Dreketi were placed with the suppliers by the year
end. Tenders for the establishment of the three substations
on turn-key basis was also completed by the end of the
year. The cost of the Dreketi Electrification Scheme is
$14.3M and is co-funded by FEA and Government on a
50-50 basis. This project supports Governments Look
North policy and the scheme is expected to be completed
in June 2013.
Completed 90% construction of grid extension in
Rukuruku - Nauouo Rural Extension at Ovalau. This is
expected to be completed in March 2012. The total cost of
this project is $0.85M, of which $0.5M was funded by the
Government and $0.35M was funded by FEA.
FEA commissioned the new ONLINE Syntel prepayment
vending system in August 2011. The new vending system
has proven to be a good and robust system. Combined with
the existing APN mobile phone network all transactions
done at any vending station is online to FEA prepayment
server.
Completed and commissioned thirty one Rural
Electrification schemes to provide electricity to 1720
customers at a cost of $5.6M which was fully funded by the
Government.
Captain (N) Timoci Lesi Natuva, the Honourable Minister for Works, Transport and
Public Utilities during one of his visits to the Nadarivatu Hydro Project site in 2011.
MEMBERS OF THE AUTHORITY
Nizam-ud-Dean
Chairman
Gardiner Whiteside
Deputy Chairman
John Low
Member (Resigned
November 2011)
Cama Tuiloma
Member (Resigned August
2011)
Isikeli Voceduadua
Member
Francis Bulewa Kean

Member (Appointed
September 2011)
Hasmukh Patel
Ex-Officio Member
EXECUTIVE MANAGEMENT TEAM
Hasmukh Patel
Chief Executive Officer
Bobby Naimawi
Chief Financial Officer/
Board Secretary
Om Dutt Sharma
General Manager Network
John OConnor
General Manager Human
Resources
Filipe Nainoca
General Manager
Customer Services
Eparama Tawake
General Manager
Generation
Anand Nanjangud
Chief Information Officer
Fatiaki Gibson
Project Director Nadarivatu
Tuvitu Delairewa
General Manager
Commercial
Saumen Bandyopadhyay
General Manager System
Planning & Control
Construction of the Nadarivatu Hydro Power Project progressed positively in 2011

with 90% of work completed by the year end. The project is expected to be fully
commissioned in June 2012.
CORPORATE GOVERNANCE
Overview
Board Of Directors
Board Structure
The Fiji Electricity Authority was

established,
incorporated
and
constituted under the provisions of the
Electricity Act of 1966 and began
operating from 1st August of that year.
The Fiji Electricity Authority is
committed in upholding the principles
of good corporate governance to ensure
that the Authority is directed and
controlled in a responsible, professional
and transparent manner with the
purpose of safeguarding its day to day
operations.
The Authority has adopted a system of

management and control based on the
appointment of Board of Directors and
specific sub-committees of the Board
having both pro-positive and advisory
functions to ensure decisions are above
Board and are made in the best interests
of FEA.
The Board comprises of the Chairman,

Deputy Chairman, Permanent Secretary
for Finance, Permanent Secretary for
Works, Transport & Public Utilities,
CEO as an ex-officio member and three
other non-executive members. Under
the Electricity Act, the Minister for
Works, Transport & Public Utilities
appoints the Members of the Board.
The Board of Directors are vested with

the broadest powers for the management
of the company, responsible for
approving the adequacy of the
organizational, administrative and
accounting structure as well as ensuring
effective compliance with the companys
policies and procedures.
The Members of the Board shall at all

times conform to the Board Code of
Conduct whilst discharging duties in
their capacity as Board Members.
Board Meetings
The FEA Board of Directors met 12 times during the year.
Director
Number of Meetings
Attended
Status
Nizam-ud-Dean
12
Chairman
Gardiner Whiteside
12
Deputy Chairman
Isikeli Voceduadua
12
Member
John Low
Member - Resigned in November 2011
Cama Tuiloma
Member - Resigned in August 2011
Francis Kean
Member - Appointed in September 2011
Hasmukh Patel
12
CEO & Ex-Officio Member
10
Board Sub-Committees
Audit & Finance Sub-Committee
Policy Based Corporate Governance
The following sub-committees of the

Board assisted the Board in advisory
functions:
The key role of the sub-committee is to

oversee the performance of the Internal
Audit function, thus providing assurance
on the effectiveness of the Authoritys
internal control processes and oversee
the financial reporting as well as discuss
risk management practices.
The Authority has also adopted a policy

based on corporate governance to ensure
that all employees are committed to
the principles of corporate governance
standards consistent with best practice,
hence, the following policies were
reviewed and approved in 2011 to
strengthen corporate governance in
FEA:
Major Projects Sub-Committee

The key role of the sub-committee
is to assist the Board in fulfilling its
responsibilities by overseeing the
delivery of any major infrastructure
projects being constructed by the
Authority in a timely, efficient and cost
effective manner including making
decisions in relation to the project as and
when required.
The sub-committee met 11 times during
the year.

the year.
HR Sub-Committee
The sub-committee is responsible for
overseeing the compliance of corporate
governance in relation to Human
Resource matters. It provides advice to
the Board regarding the development,
implementation and effectiveness of
Human Resource Policies and Strategies
and Occupational Health & Safety
Management.
the year.
1) Whistleblower Policy
2) Gifts Policy and
3) Anti-Money Laundering Policy
FEA Board Chairman, Mr Nizam-ud-Dean, signing the contract with Sinohydro Corporation,
the contractor of the Wainisavulevu Weir Raising Project. The project enhances FEAs
renewable energy objective as it will increase the water storage at the weir by another 8 metres
and will benefit two existing hydro schemes namely the Wainikasou and Monasavu hydro
schemes. The project is estimated to cost around $27M and will be completed within two years.
11
12
CHAIRMANS REPORT
FEA consolidated its journey towards achieving its long term objective of generating 90% of its total energy requirements
through renewable energy resources by 2015 with the Nadarivatu Hydro Power Project around 90% complete at the
end of the year. The project is expected to be commissioned in mid 2012. FEA has borrowed
around $200M to fund this project which it has to service and repay over the next 15 years.
The commissioning of the Nadarivatu Hydro Power Project in 2012 is in line with FEAs ten
year power development plan which requires a total investment in the energy sector of around
$1.5billion over a period of 10 years to meet the ever growing demand for electricity and
importantly assist FEA and the nation mitigate the countrys dependence on the uncontrollable
and exorbitant fuel price. In this regard, FEA is expected to invest substantially in the power
generation and the transmission and distribution sector over the next 10 years.
FEA is firm in its resolve as it continues to explore and build energy capacity to ensure the
reliability and the security of power supply to its customers in addition to ensuring the long
term financial sustainability of the Company.
FEA made a financial profit of $51.9

million after tax in 2011, largely due
to the excellent perfomance from the
Monasavu Hydro Scheme and stringent
measures to control operational
expenditures. This equates to a Return
on Shareholder Funds (ROSF) of
positive 11%.
F$ million
The profitability of FEA for the period

2004 to 2011 is illustrated in the graph
shown below:
57
54
51
48
45
42
39
36
33
30
27
24
21
18
15
12
9
6
3
0
-3
-6
-9
-12
-15
-18
-21
2004
2005 2006 2007
After Tax
2008 2009 2010 2011
Before Tax
FEA recorded an all time high fuel cost

of $137.8 million in 2011 as compared
to $126.8 million for 2010. This is
equivalent to 77% of the total revenue
for 2009. Had the tarrif increases in
2010 and 2011 not implemented then
substantial losses could have resulted in
2011.
FEA implemented the final phase of
the tarrif increase to achieve an average

39.4 cents/unit from 1st April 2011. This
tarrif is expected to assist implement
FEAs ten year Power Development Plan
(PDP) which requires a total investment
in the energy sector in excess of $1.5
Billion.
FEA incurs significant non-commercial
obligation (NCO) costs each year when
supplying subsidised electricity to rural
Viti Levu and to the whole of Vanua
Levu and Ovalau. It is estimated that
FEA incurred about $20 million of NCO
costs when fulfilling its social obligations
in 2011. Although the Public Enterprises
Act requires the Government to
reimburse the NCO costs to FEA, such
costs are not refunded. Instead, the
Government has accepted, via Cabinet
decision CP2002 18th Meeting dated
10th September 2002, FEAs noncommercial contribution to social
and community services through its
electricity subsidies to be recognised as
its annual dividend to the Government.
Therefore the deemed dividend paid to
the Government by FEA for 2011 is a
notional adjustment to account for the
NCO costs which would have resulted
in an after-tax financial profit of $66.3
million and a ROSF of positive 13.6%
for the year. The adjusted profitability
numbers and ROSF are shown in the
next column for the period 2004 to 2011.
FEA appreciates the support provided
by the Government through granting
duty concessions for its Renewable
Energy Projects and guaranteeing FEAs
borrowings. It is very important that
the Government continues to support

FEA to ensure the long term financial
sustainability of the organisation.
Account for NCO
70
60
50
40
F$ million
2011 Profitability
30
20
10
0
-10
-20
2004
2005
2006 2007 2008
Before adjusting for NCO
2009 2010 2011
After adjusting for NCO
FINANCIAL STRENGTH
FEAs gearing ratio, as measured by
Debt to Debt plus Capital and Reserves
excluding cash-in-hand, was 41.32%
as at 31st December 2011, well within
the international benchmark for power
utilities of about 45% despite incurring
Capital Expenditure of around $112
million in 2011. The gearing is at
the higher end and thus limits FEAs
borrowing capability to fund other
potential renewable energy projects and
fulfil its ten year power development
plan.
The shareholder value of FEA was
$472 million at the end of 2011 which
increased from $414.7 million at the end
of 2010 and $324.9 million at the end
of 2002. FEAs total assets were worth
$983 million, a substantial increase from
13
The wind turbines at the Butoni wind

farm are able to be lowered during a
cyclone to avoid substantial damages
$925.6 million in 2010 and $456.7 million in 2002. This shows

that FEA has added significant shareholder value over the last
nine years since the implementation of organisational reforms.
Return on Shareholder Funds to Account for NCO
The Corporatized FEA should operate

commercially and statutory powers are to be

incorporated to enable it to carry out its commercial
functions;
3. Redundant provisions should be removed; and

4. The language of the 1966 Act should be modernized
wherever practical.
14.0
12.0
The review of the Electricity Act is almost complete and

preparations for a new Electricity Decree are underway to
replace the old Electricity Act 1966.
10.0
Percent (%)
8.0
6.0
4.0
2.0
0
-2.0
-4.0
2004
2005
2006
Before adjusting for NCO
2007
2008
2009
2010
2011
After adjusting for NCO
The Sub-Committee responsible for the IPO prospectus has

completed a draft and is awaiting the appointments of an
Independent Accountant and Investment Advisor to review
the long term financial projections of FEA and the structuring
of shares to sell to the Public. The restructure of FEA is
expected to be completed in 2012.
BUTONI WIND FARM
The restructure process for the Initial Public Offering (IPO)

of the Fiji Electricity Authority with the intention to partially
privatize the Company continued in 2011 with the Steering
Committee overseeing the restructure meeting three times.
The Steering Committee is made up of the consultant Minter
Ellison, representatives from the Ministry of Public Enterprises,
Ministry of Finance, Office of the Solicitor-General, Ministry
of Works, Transport and Public Utilities and representatives
from FEA. Apart from the Steering Committee, there are two
other sub-committees established to oversee the review of the
Electricity Act (1966) and drafting of the IPO prospectus. The
objectives of the Electricity Act review are to:
1. Identify the appropriate laws to provide for the
corporatization of FEA;
2. Separate out the regulatory and Commercial Functions of
FEA with:

Government to be responsible for all regulatory

functions by a time no later than the date by which
the partial privatization takes place; and
Butoni wind farm generated 4.98 million units of electricity in

2011. This is equivalent to a fuel cost savings of around $2.13
million in 2011.
Butoni Generation (KWh)
8,000,000
7,000,000
6,000,000
kilo watt-hours
FEA RESTRUCTURE
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
2007
2008
2009
2010
2011
14
FEA commenced a feasibility study to determine

the viability of developing a Hydro Project in the
region of the upper Navua River.
Statistics for the wind farm from the commencement of its

operations in June 2007 are given below:
Total Generation Output
=
25.7 million units of
electricity
Total Diesel Fuel Cost Savings
F$8.59 million
Total Foreign Exchange Savings =
F$5.8million
Total Diesel Fuel Saved
5404 tonnes of diesel
Total Emission Reduction

=

16,799 tonnes of
Carbon Dioxide
One of the main factors that affected the operation of the wind
farm in 2011 was the low wind speed recorded.
PROGRESS ON RENEWABLE ENERGY PROJECTS
The construction of the 40MW Nadarivatu Renewable Hydro
Power Project is progressing well with overall completion of 90%
by year end and the scheme will be commissioned by the mid
2012. This would greatly assist FEA move towards achieving its
renewable energy target of 90% from renewable energy sources
by 2015. FEA has secured all the necessary funding essential to
complete the Nadarivatu Hydro Power Project in 2012.
The Validation Process for carbon credits for the Nadarivatu
Hydro project under the Clean Development Mechanism (CDM)
is 90% complete and submission to the United Nations Framework
Convention on Climate Change (UNFCCC) is envisaged by June
2012.
A full feasibility study for the Qaliwana Hydro Project has been
completed and discussions with interested Independent

Power Producers to develop this potential energy source is
ongoing. In addition, two further studies on the review of
the Wailoa Downstream feasibility report and the feasibility
study of the upper Navua River Hydro developments are
currently in progress with the final reports expected in
June 2012.
On completion of the these feasibility studies, FEA will
prioritise the projects and then call for Expressions of
Interest (EOI) from Independent Power Producers (IPP)
to develop these projects and sell electricity to FEA. This
approach will be taken due to the limitations on the
borrowing capability of the Authority.
The Ministry of Finance approved the extension of the
Government Guarantee via the Cabinet on 12th October
2010 to enable the funding of the current major projects,
especially the funding of the Nadarivatu Hydro Power
Project.
FEA awarded the tender for the construction of the
Wainisavulevu Weir Raising Project to Sinohydro
Corporation of China for a contractual sum of $20.5
million. The total cost of this project is $28 million of which
FEA will fund $7.5 million using its own cash. Sinohydro
has commenced the project by constructing the road and
has mobilised on site. When completed, this project is
expected to bring about improvements in the water storage
capacity of the existing Wainikasou and Monasavu hydro
schemes and will result in increased energy output from
the two power stations.
ACHIEVEMENT OF BOARD KEY PERFORMANCE INDICATORS
The FEA Board developed eight Key Performance Indicators (KPIs) for 2011 to enable the Government to measure the
performance of the FEA Board. The KPIs were included as part of FEAs Statement of Corporate Intent (SCI) for 2011. The
actual achievement of the KPIs is detailed below:
1
Achieve a ROSF of at least 2.5% provided the proposed average

tariff of 39.4c/unit is implemented from 1st April 2011.
Fully comply with the following statutory requirements:
The audited ROSF as at end of December, 2011 is a positive 11%. This is due
to the good rainfall received at the Monasavu catchment during the year which
enabled more energy to be generated from hydro in addition to the final tariff
increase of an average 39.4 cents/unit implemented from 1st April 2011. Further
a net income tax benefit of $13.9M due to restating the Deferred Tax Liability and
Future Income Tax Benefit to factor the reduction in corporate tax rate from 28%
in 2011 to 20% in 2012 also contributed to the Profit after Tax. The generation
mix as at end of December 2011 was 59.4% renewable and 40.6% thermal.
Submission of 2012 to 2014 Corporate Plan, SCI and EIRP by

30 September 2011
Achieved. Submitted on 29th September, 2011
Submission of half year report for 2011 financial year by 1st

August 2011
Achieved. Submitted on 27th July, 2011
Submission of draft annual report and un-audited financial

accounts for 2010 by 31 March 2011
Achieved. Submitted by 31st March, 2011
Submission of the annual report and audited financial accounts

for 2010 by 31 May 2011
Achieved. Submitted by 31st May, 2011
Carry out feasibility studies for one major Renewable Energy

Project
Achieved. A preliminary report of the feasibility study for the Upper Navua River
was completed by the end of the year.
Ensure that Nadarivatu Hydro Project construction work is

progressed on time and fully commissioned by the end of the year.
In progress. Work completed YTD December was 90% and commissioning has
started at the Weir and Switchyard. It is envisaged that the first machine will be
commissioned in May 2012 and the other to follow soon after.
Complete 100% of Government funded RE Projects as per the

schedule by 31st December 2011.
Achieved. Completed all the 31 Government funded RE schemes as per schedule

by 31st December 2011.
Finalise contract price with Contractor and Commence

construction of Wainisavulevu weir raising project subject to
availability of funds.
Achieved. Signed contract with Sinohydro Corporation in December 2011.

Mobilsation work commenced in December together with the construction of
road to the project site.
Execute the Monasavu Hydro Scheme Half-Life refurbishment

program as per plan
The following work has progressed:

a)Award Battery Tender Vuda and Cunningham. Technical evaluation completed
& Management Approval received for award to CBS Power Solutions. Award
letter sent. Business case approved on 1 Dec 2011.
b)Award contract 132kV Current Transformer and Capacitive Voltage
Transformer Tender awarded to DELSTAR.
c)132kV Insulator replacement (50) 59 towers have been successfully
completed, target for 2011 was 50 towers.
d)Evaluate tender for New 11/132kV Wailoa Transformers Tender closed on
16th September, evaluation in progress.
e)Completed 30% of structure refurbishment Vuda, Cunningham - Scope &
Condition Report is being prepared for the replacement of tower bolts, tower
washing, rust treatment and painting - Tender awarded to Linetech of New
Zealand.
f)Research 145 kV Isolators and control panel upgrade - Tender documentation
research complete.
g)Governor
Upgrade
from
Analogue
to
Digital
Tender
awarded to GE Energy and contract signed in October 2011.
h)Monasavu Dam Instrumentation Upgrade - Tender awarded
to Dam Watch New Zealand, contract signed in December 2011.
i)Wailoa battery Charger Replacement - Tender awarded to North Power, New
Zealand, contract signed in December 2011.
Establish financial viability on the conversion of the two Vuda Board approval sought via Board Paper 5692 in February 2011, work is in
Wartsila Generating Sets from IDO to HFO operation and if progress at the Tank Farm according to plan with 66% of the work completed by
positive seek Board approval, commence implementation and the end of the year. Completion scheduled for May 2012.
complete Project as per plan.
15
16
Protection Review Study of the entire FEA power

system was carried out to ensure safe and reliable
system operation.
AUGMENTATION OF THE TRANSMISSION GRID
TARIFF STUDY & POWER DEVELOPMENT PLAN
The Qeleloa 33/11kV Zone Substation was commissioned in

April 2011, followed by commissioning of Komo Park Zone
33/11kV Substation in May and Nausori Zone 33/11kV
Substation in July 2011.
FEA implemented the final phase of the tarrif increase

approved by the Fiji Commerce Commission and Cabinet to
achieve an average 39.4 cents/unit from 1st April 2011. This
tarrif will assist FEA implement its 2020 Power Development
Plan.
An Environment Impact Assessment (EIA) study for the

construction of 132kV Wailoa Nacocolevu transmission line
was successfully completed in June 2011.
The electrical protection system on the two critical 132 kV
transmission lines from Wailoa to Vuda in the Western region
and from Wailoa to Cunningham road in the Central region
was upgraded to state-of-the-art transmission line protection
systems.
Protection Review Study of the entire FEA power system was
carried out to ensure safe and reliable system operation.
Review of the FEA Grid Code was undertaken to align the FEA
Grid Code to international standards.
The 9.3 MW wood-fired co-generation plant of Tropik Woods
at its Drasa mill continued to struggle with its perfomance and
produced only 17.59GWh of energy in 2011 out of a contracted
quantity of 38.8GWh per annum. FEA is working closely
with Tropik Woods to ensure the plant is able to generate the
deemed quantity of 38.8GWh annually.
FEA completed the review and compilation of the Power
Development Plan up to 2020. The plan was presented to the
key stakeholders of Government and showed the road map
which will enable the achievement of FEAs target of 90%
renewable energy by 2015.The plan incorporates both the
generation and transmission capacity building over the next
10 years, and the associated investment level required.
A total investment in excess of F$1.5Billion will be required

to develop the generation, transmission and distribution
projects. Out of this, FEA will be required to invest around
F$1.2 Billion while Independent Power Producers (IPPs) are
required to contribute $350M to assist in the development of
the power generation sector.
PRODUCTIVITY IMPROVEMENTS
FEA has achieved significant productivity improvements since
2000. The number of employees has been reduced by 31%,
from 960 in 2000 to 661 in 2011, at a time when:

Number of customers increased by 33%, from 117,315 in

2000 to 155,912 in 2011
Generation output increased by 60%, from 523 gigawatt-hours in 2000 to 837GWh in 2011;
Length of power lines and underground cables increased

by 25%, from 7,124 km in 2000 to 8,943 km in 2011;
Total assets increased by 108%, from $473 million in

2000 to $983 million in 2011;
Total shareholder funds increased by 49%, from $316

million in 2000 to $472 million in 2011.
As a result, the following productivity improvements have

been achieved between 2000 and 2011:
Customers per employee increased by 93%;
Generation output per employee increased by 135%;
Length of power lines and underground cables per

employee increased by 82%; and
Asset value per employee increased by 149%.
ACKNOWLEDGEMENT
I would like to convey my sincere appreciation and thanks to
the fellow Board Members for their continuous support and
contribution throughout the year. Their commitment and
direction was instrumental in ensuring that FEA remained
focused and on-track to achieve its strategic objectives. My
special thanks to Mr Cama Tuiloma and Mr John Low, who
left our Board in 2011, for their constructive contribution
made to FEA during their term.
I would like to thank the Cabinet, especially the Hon. Minister
for Works, Transport & Public Utilities and the Hon. Minister
for Public Enterprises, for their invaluable support provided to
FEA during the year.
I also record my sincere thanks to the Fiji Commerce

Commission for their understanding of FEAs difficult position
and approving the implementation of the tariff increases with
the final phase implemented from 1st April 2011.
To our valued customers, we will continue to explore and
implement ways in which we can further improve our services
to meet or exceed their expectations.
To our Management Team and employees, I am highly
appreciative of their efforts and contribution during the year.
The level of dedication and commitment that they and our
outsourced service providers showed throughout the year
has enabled us to energise our nation under very challenging
conditions.
Nizam-Ud-Dean
Chairman
17
18
Work is in progress to convert 2x6MW Industrial Diesel Oil (IDO) generating sets
to run on cheaper Heavy Fuel Oil (HFO) at the Vuda Power Station. The project is
expected to be completed by May 2012.
CHIEF EXECUTIVE OFFICERS REPORT
Despite the good profitability level achieved in 2011 of $51.9M post-tax, FEAs
working capital is still vulnerable with a closing cash balance of around $3.4M
at the end of 2011. This is equivalent to one weeks fuel cost at fuel prices
prevailing in 2011. FEA is still faced with the mammoth task to build new energy
capacity to cater for increased demand of electricity and maintaining existing
assets which are considered its Golden Goose. Therefore it is imperative that
FEA manages its business model diligently to ensure that it remains financially
sustainable to meet its day to day operational obligations and achieve its long
term objectives.
FEA performed admirably in 2011

recording a profit after tax of $51.9M.
This was achieved partially due to the
good rainfall received at the Monasavu
catchment (which produced 425GWh
of energy in 2011, above the long term
average of 400GWh) and implementing
the final phase of the tariff increase to
achieve an average 39.4 cents per unit
from 1st April 2011. The average cost
of producing a unit of electricity from
diesel was in excess of 40 cents per unit
in 2011.
The reduction of the Corporate Income
Tax Rate from the current 28% in 2011 to
20% in 2012 required the Deferred Tax
Liability and Future Income Tax Benefit
carried on FEAs balance sheet to be reinstated. The Net Income Tax effect due
to the adjustments was included in the
Income Statement of FEA, resulting in a
Net Income Tax Benefit of $13.9M.
The positive financial performance
enabled FEA to carry out capital
expenditure (Capex) works totaling
$112M and repay matured bonds
amounting to $17M in 2011. The capex
of $112M is one of the highest achieved
in FEAs history, as it had to carry out
critical capex that had been deferred
from past years due to poor financial
performance as a result of the low
electricity tariff. These ageing assets
pose a risk to the reliability and security
of power supply to our customers
and need to be replaced and upgraded

with urgency. FEA realized that if it
prolonged the replacement and upgrade
work of these key assets, then it was
putting the entire power system at risk
and therefore FEA commenced to carry
out these critical capex with utmost
priority in 2011.
The next three years will bring a lot
of challenges to the Authority. FEA
envisages a total capex of around
$183M and repay matured bonds and
loans totaling $136.4M. This is a huge
financial commitment and requires that
FEA must make profits and generate
surplus cash in order to have the ability
to fund these CAPEX (averaging $60M
annually) and repay matured bonds
and loans when they fall due. The total
bonds and loans maturing in 2012 are
around $37M, as we plan to refinance
2 by $20M loans that are maturing in
2012. Therefore it is imperative that
FEA continue to make Profit after Tax
of at least $40M annually over the next
three years to ensure it has the ability to
fund critical capex and repay matured
bonds and loans when they fall due. This
will ensure the reliability and security
of power supply to its customers and
safeguard Government being the
guarantor of the FEA loans.
I thank the Chairman and the Board of
Directors for their valuable guidance
and constructive support throughout
the year.
I wish to record my thanks and
appreciation to my colleagues in the
Executive Management team and to all
the employees of our organisation and
other external service providers for their
continuing support, dedication and
patience throughout 2011.
I also record my sincere thanks and
appreciation to the Prime Minister
and his Cabinet Ministers, Permanent
Secretaries and Government officials,
the Reserve Bank of Fiji, the Fiji
Commerce Commission, the Fiji
Revenue & Customs Authority and
Trade Union executives for their kind
assistance, support and cooperation
rendered in 2011.
Their invaluable contribution made
it easier for FEA to rise above the
challenges faced during the year and
perform exceptionally well.
I look forward to their continued
support in delivering increased value to
our Shareholder and Stakeholders in the
coming year.
Hasmukh Patel
Chief Executive Officer
19
20
FEA places a very high importance on addressing the concerns of customers with
urgency. FEA customer service representatives provide services to customers on a
daily basis at all major locations.
REVIEW 0F 2011
CUSTOMERS
Customer Service
The number of customer accounts increased by 3 per cent,
from 151,410 in December 2010 to 155,912 in December 2011.
The breakdown in customer accounts are made up of:
Industrial 93 (0.06%); Commercial 14,563 (9.34%) and
Domestic and Institutional 141,256 (90.6%). The increase in
customer accounts was mostly in the Domestic sector
recording a growth of 3% most of which were in remote rural
areas as a result of the Rural Electrification extension
programs. There was a significant decrease in demand for
electricity by an overall 3.1 per cent, from 764.23 million units
in 2010 to 740.87 million units in 2011. The main decrease in
electricity consumption was in the Domestic sector, with
demand decreasing by 6 per cent, from 232.5 million units in
2010 to 218.5 million units in 2011. Demand also fell by 3.6%
in the Commercial sector with the only growth being in the
Industrial (Maximum Demand) sector which grew by 1.6%.
The reduction in electricity demand for the Domestic and
Commercial sectors could be attributed to the increase in
electricity tariff leading to increased energy use awareness and
energy savings strategies implemented by customers in the two
sectors. Energy savings promotional programs initiated by
both FEA and Department of Energy also contributed to this
reduction. The Government subsidy given for domestic
customers who use less than 75 units per month also
contributed to the reduction in consumption with customers
reducing electricity consumption to meet Government subsidy
requirements and thus take advantage of the subsidy offered.
With the focus on improving power quality, excessive reactive
kVar units billed increased from 5.7 million units in 2010 to
7.1 million units in 2011 an increase of around 24%.
Contact Centre
The Contact Centre continued its excellent performance in
2011. The Grade of Service (GOS) achieved for the year was
93.3% with Calls Abandoned at 4.1%. This was an excellent
result in a challenging year where the Contact Centre was
required to manage information flow to customers on the new
tariff rates, disconnection and reconnection, upgrade in
consumer security deposits, prepayment issues and unplanned
and planned power shutdowns. Total calls received to 31st
December 2011 was 367,149, an average of 30,595 calls a
month. This was a decrease of 2.5% from 2010 when a total of
376,379 calls was received. The reduction in call volume was
the result of a strategy to proactively disseminate information
through community awareness in both print and radio media.
With a concentrated and coordinated approach in 2012 it is
anticipated that the call volume will continue to decrease. The
focus continues to be on the quality of service delivered to the
individual customers by Contact Centre Staff when answering
the calls. This quality of service can be monitored by the
introduction of technology such as call recording. The Contact
Centre continues to operate 24hours, 7days a week with the
main Contact Centre in Suva closing at 9.00pm and services

taken over by Contact Centre Staff at the National Control
Centre in Vuda. Use of the emergency 913 number for non
emergency calls continues to be a concern with a total of
21,063 calls received on this number of which only 2229 were
genuine emergency calls.
For the 2011 Customer Services Survey, six survey questions
were prepared and survey forms sent out to customers with
their electricity bills. The forms were received and analysed.
Whilst FEA is pleased with the improvement in its overall
customer satisfaction level, it wishes to continually improve its
level of service to customers. Accordingly, it has put in place
appropriate action plans to address the areas for improvement
highlighted in the survey. In the meantime, FEA is also
investigating how it could improve the reliability of customer
survey in future years to obtain more consistent results.
Prepayment
Changes in the tariff structure including the introduction of
the Government subsidy put substantial pressure on the
Actaris Off Line prepayment system. By April 2011 it was
clear that the system was not able to cope with the
requirements of the new tariff structure and required to be
replaced. An Expression of Interest was put out and Syntel,
a South African based company, was selected to provide and
implement the new system. The new ONLINE Syntel
prepayment vending system was commissioned at the end of
August 2011 and has proven to be a good robust system.
Combined with the existing APN mobile phone network all
transactions carried out at any vending station is online direct
to FEA HQ main prepayment server. All issues with the old
system have now been resolved. All rural electrification
customers were metered using prepayment meters with
installation of more than 2,382 prepayment meters in 2011.
Product Awareness
Media presentations on FEA services and safety issues
continued to be the main focus in FEAs customer
communication activities during the year. Customers and the
general public were encouraged to report safety issues such as
fallen power lines or low lying power lines and vegetation in
the vicinity of power lines that were likely to affect them.
Information on the electricity tariff and review of consumer
security deposits, together with advice on how to save energy
and reduce electricity bills, were provided during radio talk
back shows and interviews on television, radio and print
media. Information on projects currently undertaken by FEA,
including Rural electrification projects, were also provided
during these interviews and radio talk back shows.
Presentations were also made to secondary schools and
communities, especially communities who were being
21
22
electrified for the first time, to create awareness on energy

savings and electrical safety and complete desired customer
documentation. Training was also provided in these rural
communities on how to use the new prepayment meters that
would be installed. FEA also continued to use its billing
network to maximize the dissemination exposure of its safety
messages, by printing messages on the electricity bill itself
and providing information bill inserts on how to calculate
and read power bills and required consumer security
deposits.
Demand Side Management
FEA continues to assist its customers become more energy
efficient by providing technical advice and billing data to
those customers who request for such data. In 2011, the
Demand Side Management Team of FEA completed two
energy audits, one for the Reserve Bank of Fiji and the other
for Future Farms, a poultry farm in Ba. The report provided
these two customers with an in-depth knowledge of their
energy consumption and on how they could reduce their
energy consumptions. FEA also visited several schools in the
Central and Northern Divisions making presentations on
Energy Savings and Electrical Safety.
An agreement was reached with the Ministry of Education for
a study into the development of a teaching module on
Electrical Safety and Energy Savings into the schools
curriculum. The study would determine if the module could
be introduced into primary and secondary schools.
FEAs Reactive Metering Policy was strictly monitored during
2011 with reactive energy metered for those customers using
excessive reactive energy. Excessive reactive energy usage
increased by around 24% in 2011 when compared to 2010.
Electricity Tariff
There was one electricity tariff increase for the year approved
by Cabinet and the Fiji Commerce Commission. The increase
came into effect on the 1st of April 2011 which affected the
Commercial and Industrial categories only. As a result of the
tariff increase in 2011, the average price per unit increased
from 29.64 cents in December 2010 to 38.75 cents in
December 2011, an increase of 30.7%. This brought about a
significant increase in billed revenues which increased by
27.3% from $227.93M in 2010 to $290.21M in 2011.There
were many challenges involved in the introduction of the new
electricity tariff due to the complex nature of the new tariff
and its application. The challenges were met and the new
tariffs were implemented accurately and on time.
In view of the tarrif increases implemented in 2010 and on 1st
April 2011, it was imperative that a review of all the consumer
security deposits be carried out and analysed. The required
deposits were compared with the actual deposits held and the
additional deposits calculated. The additional deposits
required were communicated to each customer via a letter
inserted in their electricity bills. Customers who inquired
with our Contact Centre were also provided with this

information. All customers were given the option of either
paying by cash or provision of a bank guarantee of a sum
equal to the required deposits. The new consumer deposits
required was implemented in October 2011 with customers
initially given 3 months to pay for the additional deposit. The
three months was then extended to six months after feedback
from customers that the time provided was too short.
EMPLOYEE, EMPLOYEE RELATIONS, TRAINING AND
DEVELOPMENT AND HEALTH, SAFETY & ENVIRONMENT
FEA continues to recognize that its people are essentially the
drivers of the business systems and processes and to achieve
optimum performance, the effective management of people is
vital. Successful Organizations recognize the critical
importance of investing in their people and increasing their
value to their organization. It is the quality people who
provide companies with their competitive advantage.
One key factor in employee motivation and retention is the
opportunity for employees to continue to grow and develop
their job and career enhancing skills. While FEA recognizes
that investment in its people through training and
development is vital for employee retention and motivation,
it is also important to ensure that any investment in training
and development adds value to the employee but more
importantly to the Authority and is aligned to the employees
career development and the Authoritys succession planning.
The FEA has been listed as one of the Designated
Corporations in accordance with the Essential National
Industries and Designated Corporations Regulations 2011
which was gazetted on the 8th of September 2011. As a
Designated Corporation, the Authority is required to fully
comply with the requirement of the Essential National
Industries (Employment) Decree 2011 which was gazetted on
the 29th of July 2011.
The introduction and commencement of the Essential
National Industries (Employment) Decree 2011 with effect
from the 8th of September 2011 provided a major challenge
and shift in the management of Employment and Industrial
Relations in FEA with the focus shifting to the alignment of
the terms and conditions of employment to ensure the
viability and sustainability of the organization.
The FEA Board endorsed the Strategies and the Action Plans
to ensure full compliance to the Decree and also focused on
the Sustainability of the Organization. The successful
implementation of the Action Plans also ensures the
alignment of the FEAs Human Resources, Industrial Relation
and People Strategies to the Essential National Industries
(Decree) 2011, the privatization of FEA and the promotion
and upkeep of employee rights.
FEA also recognizes that there is a current restructure of the
Organization being undertaken by the Ministry of Public
23
One key factor in employee motivation and

retention is the opportunity for employees to
continue to grow and develop job and career
enhancing skills
Enterprise. Therefore, the strategies implemented in 2011

also focused at preparing FEA and its employees for the likely
changes that would be brought about by the partial
privatization of FEA.
FEA continued to aspire to be an agile and lean organization
that is able to adopt quickly to Business challenges. Strategies
were implemented to ensure the Right Sizing of FEA and
determining the optimum staffing level of the organization
but at the same time continuing to promote productivity
through the implementation of a performance management
system for all its employees. During the year, FEA also
focused in building a disciplined workforce that is loyal and
committed to ensuring compliance to policies, safety rules,
respective manuals, procedures and other FEA administrative
circulars.
Staff Numbers
2011 was a very challenging year for FEA in terms of its
human capital. Twenty two (22) very experienced employees
with an average of more than 25 years experience in the
electricity industry retired from FEA. In addition, thirty two
employees resigned from the Authority, the majority of
whom migrated overseas. Ten employees were terminated by
the Authority due to breaches of policies and procedures.
While we started the year with 673 employees, we ended the
year with a total of 661 employees.
Recognizing the risks of the competitiveness of the overseas
market for our engineers and technical staff and that we were
in no position to compete with these markets and to ensure
we build capacity, FEA reintroduced the apprentice scheme
and recruited 10 new apprentices earlier in the year.
Furthermore, FEA engaged technically qualified attachees
from the National Employment Centre to build capacity and
have readily available experienced staff to mitigate the risk of
migration. These attachees are engaged for a maximum
period of 6 months and should they perform exceptionally
and live the values of FEA, then they are absorbed into the
workforce provided a suitable position becomes vacant.
The performance of employees of FEA continued to be

assessed based on the Performance Management System the
Authority had arrived at and signed Agreements with the
three Unions. The Performance Management System
replaced the COLA and annual merit increments. The Board
and the Management of FEA acknowledge and wish to thank
the three Unions representing the FEA employees, namely
the Fiji Electricity Workers Association, Electrical Trades
Union and the Construction, Energy and Timber Workers
Union of Fiji for their support in the achievement of this
milestone.
Staff Training
In 2011, the FEA Training & Development Framework was
implemented with the main focus on Mandatory
Authorization and Refresher Training including Contractor
Management and Safety Awareness Training. Training on the
Power Development Plan and electrical protection of the
power system was carried out by the Power Research
Development Consultants.
The Mandatory training conducted included Live Line
Refresher Training for the FEA Live Line team in the
33kV/11kV category by Glove & Barrier Energy Services Pty
Ltd and the 132kV category by Bill Matthews Consultant,
Defensive Driving Course by LTA, First Aid & CPR Course
by Red Cross, Induction Training for new recruits by FEA
and Dog Training by the Fiji Police for Meter Reading
Attendants.
Other external Training conducted included Project
Management Fundamentals for the Nadarivatu Hydro
Project Civil and Network Engineers, Team Leader Training,
Professional Business Writing Skills and Corporate
Governance Training. The Customer Service Skills Workshop
was also carried out for all FEA employees by Human
Resources Development South Pacific and FICAC facilitated
workshop on Anti-Corruption and Risk Management
Workshop. The IT Power Consultant also conducted the
Clean Development Mechanism Training for the Generation
24
FEA is totally focused on a continuous improvement culture to achieve
teams manning the FEA Renewable

Stations and on the job training at the
Nadarivatu Hydro Project.
carried out and FEA Management team

will finalise the successful applicants in
2012.
Ten new apprentices were recruited in

the Plant Maintenance trade, Electrical
Fitter
Mechanic
trade
and
Telecommunication Technician level
for the Central, Western and Northern
regions. Eight trainee Cable Jointers
completed their training and were
offered work contracts including
upgrade to fully fledged Cable Jointers.
FEA continued to support and engage

industrial student attachments from the
various institutions of Fiji in 2011.
The Training Department and ICT

team also participated in workshops on
Industry
Standards
Advisory
Committee for the Fiji Qualifications
Framework on Electrical Fitter,
Mechanical and Telecommunications
Trades and SPC In Country
Consultations on the Pacific Register of
Qualifications and Standards.
The FEA Training Centre was issued a
Certificate of Recognition to operate
legally as a Training Provider in Fiji by
the Fiji Higher Education Commission
on 17 May 2011 with the Recognition
No. of the Institution as RCN 0067/10.
The Training team submitted and won
the BIDS for the Pacific Power
Association Training for the Pacific
Region Utilities in OHS, Generation,
Network Operation and Maintenance
and this programme is scheduled to be
conducted in early 2012.
Internal advertisement for Sponsorship
of employees to pursue Advanced
Diploma
in
Electrical/Mechanical
Engineering
and
Bachelor
of
Engineering degree courses in Electrical
& Mechanical Engineering were also
Apart from the above training

programmes, staff also continued with
their own development programmes in
the various areas of their interest which
include Diplomas, Advanced Diplomas,
Degrees and Post Graduate studies.
Employee Development and Succession
Planning
In 2011, the FEA Board approved a
comprehensive FEA Training and
Development Framework that will
ensure
that
all
training
and
development programmes for all
employees are aligned to the
achievement of the full competencies
for each employee appointed to
respective position, employee career
development plans and the Authoritys
succession plans.
The FEA Training and Development
Framework also clearly identified likely
successors to all critical positions from
the Permanent Tradesperson, Team
Leader, General Manager to the Chief
Executive Officer level. Training and
development plans for all the identified
possible successors for each position
have been implemented to ensure that
these employees are ready to replace the
post holders should they decide to leave
FEA.
Inculcating FEA Values

FEA continued to place great
importance in inculcating its core
values in all its employees. The Human
Resources Policy and Procedures
Manual was reviewed after the
implementation of the ENI Decree to
ensure alignment to the provisions of
the Decree. The Employee Code of
Conduct was also reviewed and
amended accordingly to reflect changes
in the Crimes Decree and ENI Decree
which was approved by the Board.
Furthermore during 2011, FEA
continued to reinforce discipline within
the organization and during the year 10
employees were terminated for serious
breaches of FEA policies and
procedures. FEA continued to reinforce
the Governments policy regarding zero
tolerance on fraudulent activities.
Industrial Relations
FEA continued to have a cordial
relationship with the three Unions in
the first half of the year. Towards the
second half of the year, FEAs Industrial
Relations was focused on ensuring
compliance with the requirements of
the Essential National Industries
(Employment) Decree 2011.
The
implementation of the ENI Decree 2011
also brought about the termination of
old outstanding issues relating to the
terms and conditions of employment
with one of the Unions.
In line with the provisions of the ENI
Decree 2011 there was a noticeable
reduction in the number of eligible
employees who could become members
of a Bargaining Unit.
the ultimate goal, which is SAFE PRODUCTION, ZERO INCIDENTS
At the end of the year, the Fiji

Electricity
Workers
Association
(FEWA) was registered as a Bargaining
Unit which represented two categories
of employees in the Staff and the
Tradeperson Categories.
FEA and the FEWA Bargaining Unit
have also signed two Collective
Agreements for the respective employee
categories and this have been registered
with the office of the Registrar of Trade
Unions.
To ensure compliance with the ENI
Decree 2011, FEA offered contract
terms and conditions of employment to
all the employees who were no longer
defined as a Worker in accordance
with the ENI Decree 2011 and all these
employees accepted and signed their
contracts of employment by the end of
2011.
Health, Safety and Environment (HSE)
FEA is committed to supporting a total
Health, Safety and Environment
improvement culture where all
employees have the necessary tools,
methods and personal attributes to
actively care for the safety of
themselves, their co-workers and
members of the public.
This commitment and drive, led by the
Board and the Executive Management,
ensures that FEA continues to achieve
best practice in terms of its safety
results. FEA is totally focused on a
continuous improvement culture to
achieve the ultimate goal, which is
SAFE
PRODUCTION,
INCIDENTS.
ZERO
inductions were carried out on the field

for all network contract works awarded.
Consolidation and embedding of the

Fleet Policy manual continued with all
FEA drivers to help them perform their
driving safely and professionally in
order to protect themselves, other
employees and members of the public
from risks arising out of fleet
operations. Transport Committee
sittings were conducted on a monthly
basis to hear all motor vehicle related
accident cases including complaints
from members of the public. A total of
fifty seven (57) drivers appeared before
the Committee which included twenty
five (25) windscreen and twelve (12)
third party cases. Of the twenty FEA
driver initiated accident cases, one (1)
was a major accident which accounted
for 31% of accident costs in this
category while the remaining nineteen
(19) were relatively minor accidents
stemming from momentary driver loss
of attention. Total accident costs for
2011 were the lowest over the past five
years with accident numbers on a
downward trend.
Workplace audits were conducted by

HSE Officers at all locations and
identified corrective / improvement
actions required. A total of one
thousand, one hundred and forty-nine
(1,149) Safety Visits were carried out to
address Safety Issues and raise the
safety profile.
Defensive Driver Training continued to

be conducted for authorized FEA
drivers in 2011.
FEA Contractor HSE Management
System Training and Refreshers were
conducted with new and existing FEA
Network Contractors to ensure they
met minimum legislative requirements
and complied with FEAs policies and
standards.
Contractor
worksite
Internally, a rigorous hazard identif-ication and corrective improvement

action register continued to be
maintained and monitored. A total of
one thousand four hundred and sixty
five (1,465) corrective actions were
identified in 2011 against nine hundred
and fifty (950) in 2010. Of these
corrective actions, one thousand and
eighty (1080) were completed with
three hundred and eighty five (385)
pending.
A centralised electronic data-base was
developed by the HSE team and rolled
out across all FEA locations.
Employees were given hands on
training to enable them to register HSE
issues
and
monitor
associated
corrective/improvement actions.
HSE committees continue to fulfill an
important role by performing their
functions effectively. A total of thirty
five (35) near misses, incidents and
accidents were investigated by the HSE
team and recommendations tabled and
registered as corrective/improvement
actions.
25
26
Because of the inherent dangers in dealing with electricity, extensive education and
training is essential to ensure the safety of FEA workers and the public at large.
27
The Monasavu Dam has been instrumental

in providing renewable source of energy to Fiji
since 1983 and has contributed to the successful
development of our economy.
PRODUCTION
2011 RAINFALL COMPARED WITH PAST YEARS
Water Management
The storage level of the Monasavu lake at the beginning of 2011
was 738 metres above mean sea level (AMSL), which was 23
metres above the minimum safe operating level of 715 metres.
1000
Rainfall (mm)
Above-average rainfall during the months of January, February,

May, October, November and December 2011 helped increase
the storage level to 741 metres AMSL at the end of the year.
1200
800
600
400
Total rainfall in 2011 was 4,925mm compared with 5,072 mm

in 2010. The lowest ever rainfall recorded is 3,540 mm in 2004.
200
0
Jan Feb Mar Apr
2011 MONTHLY GENERATION MIX (GWH)

80
2011
May Jun Jul Aug Sep Oct Nov Dec
Average past 28 years
The average generation mix for 2011 was 55 per cent hydro,
40 per cent diesel and heavy fuel oil, 1 per cent wind with the
other 4 per cent provided by the Independent Power Producers
(IPPs), namely Tropik Wood Industries Limited and Fiji Sugar
Corporation. In comparison, 48 per cent was generated from
hydro in 2010, 34 per cent from diesel, 15 per cent heavy fuel
oil, 1 per cent from wind with the other 2 per cent from Tropik
Woods and Fiji Sugar Corporation.
70
60
50
40
30
20
HYDRO-THERMAL GENERATION MIX
10
100
FEA Thermal
Other
In 2011, the FEA renewable power stations generated 489 Giga

Watt-hours (GWh) of electricity, thermal power stations 340
GWh and Independent Power Producers (IPP) 36 GWh.
80
70
60
50
40
30
20
10
0
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
FEA Hydro
90
May Jun Jul Aug Sep Oct Nov Dec
Percent (%)
Jan Feb Mar Apr
Thermal
Hydro & IPP
28
MONASAVU DAM STORAGE LEVEL

750
745
Dam Level in metres above MSL
740
2011
735
2010
730
725
2009
720
715
710
705
700
Jan
Feb
Mar
Apr
May
Butoni wind farm generated 4.97 million units of electricity in

2011 while Tropik Woods 9.3 MW wood-fired co-generation
plant at its Drasa timber mill continued to suffer frequent
breakdowns and managed to produce 17.59 million units of
electricity compared to 4.71 million units in 2010. Tropik
Wood is expected to sell some 38.8 million units of electricity
per annum to FEA. FEA replaced the short fall in supply from
Tropik Wood by burning expensive thermal fuel.
Power System Reliability
Three internationally accepted performance indicators are
used each year to measure FEAs power system reliability:
Jun
Jul
Aug
Sep
Oct
Nov
Dec
in order to improve the reliability of power supply to be in

line with best performing international utility benchmarks of
similar size.
The initiatives FEA is currently pursuing include:
Live-line maintenance of its power lines at all voltage
levels;

Effective vegetation management program;
Use of appropriate technology to detect defects that can

be fixed on time and equipment that can restore power
supply quickly; and
The average total length of time that a customer is without

power over a year is measured by the System Average
Interruption Duration Index (SAIDI). This has improved
by 20 per cent, from 794 minutes in 2010 to 637 minutes
in 2011.
Ensuring that adequate supply capacity is available to

meet the demand for electricity at all times.
The average number of times that a customers power

supply is interrupted in a year is measured by the System
Average Interruption Frequency Index (SAIFI). This
index improved from 15 times in 2010 to 13 times in 2011.
FEA made a financial profit of $51.9 million after tax in 2011,

which includes a net income tax benefit of $13.9M due to
re-stating the Deferred Tax Liability and Future Income Tax
Benefit to factor the reduction in corporate tax rate from 28%
in 2011 to 20% in 2012. This profit equates to a Return on
Shareholder Funds (ROSF) of positive 11%.
The average time that a customer is without power per

interruption is measured by the Customer Average
Interruption Duration Index (CAIDI). This index
improved from 53 minutes in 2010 to 49 minutes in 2011.
The main reasons for the power interruptions that occurred
in 2011 were:
Planned maintenance works on overhead lines and
underground cables (29 percent)

Natural disasters e.g. flood, lightning, cyclone, etc. (29

percent)
Faults on power line hardwares (37 percent) and
Vegetation interfering with power lines (5 percent)
FEA needs to spend substantially to reinforce its power system
FINANCIAL PERFORMANCE
Profitability
This result was achieved partially due to the good rainfall

received at the Monasavu Dam which produced 425GWh
of energy, above the long term average of 400GWh and
implementing the final phase of the tariff increase resulting in a
tarrif of average 39.4 cents/unit from 1st April 2011. Relatively,
the average cost of producing a unit of electricity from diesel
was in excess of 40 cents/unit in 2011.
Earnings before interest, tax, depreciation and amortization
(EBITDA) for 2011 were $93.9 million. This provided an
EBITDA net interest coverage ratio of 3.89 times.
Revenue from electricity sales for 2011 was $288.8 million
compared to $226.9 million in 2010, an increase of $61.9
million. This was a result of the impact of the electricity tariff
increase for the entire year 2011.
29
Other operating revenue of $16.8 million in 2011 was higher

by $12.2 million compared to the $4.6 million earned in 2010.
The increase is due to the insurance payment of $10.9 million
for the Business Interruption and Material Damages for the
Kinoya Generator set damaged in 2011.
ELECTRICITY SALES VOLUME
800
700
GWH
600
Net financing costs decreased by $0.4 million in 2011, from

$11.3 million in 2010 to $10.9 million in 2011. This is due to
the repayment of matured bonds of $17 million in July 2011.
Interest costs amounting to $13.1 million were capitalised to
the capital projects in 2011, compared with $13.2 million for
2010.
The additional borrowings for 2011 include new bonds
amounting to $5.5 million and a $20 million loan from a
commercial bank. The Fiji Government provides a financial
guarantee for all of FEA borrowings.
500
400
300
200
100
2003
work in progress to the Fixed Assets Register in 2011. This

includes the two power stations namely the Wainikasou &
Nagado Power Stations acquired by FEA from Sustainable
Energy Limited in 2010.
2004
2005
Residential
2006
2007
2008
Commercial
2009
2010
2011
Industrial
The total operating expenses of FEA excluding fuel costs,

depreciation and amortisation was $73.7 million. This has
increased by $15.9 million when compared with the $57.8
million incurred in 2010. This is due to the increase in repairs
and maintenance cost for transmission lines and generator
assets in 2011.
The net thermal fuel cost increased substantially by $11.1
million in 2011, from $126.8 million in 2010 to $137.9 million
in 2011. This was largely due to substantial increases in the
prices of IDO and HFO fuels as compared to 2011. The
thermal fuel cost accounted for 57% of FEAs total operating
expenses of $242 million in 2011 compared with 59% in 2010.
Electricity generated from the thermal power stations

decreased significantly by 75GWh in 2011. This was due to the
good rainfall received at the Monasavu dam and dampening of
the electricity demand due to the implementation of the tarrif
increase.
The total hydro generation increased from 414GWh in 2010
to 456GWh in 2011 largely due to the good rainfall received
in Monasavu. The Wailoa hydro power station generated
425GWh in 2011, higher than the 383GWh that was recorded
in 2010. Total quantity of IDO fuel burnt in 2011 was 53,238
tonnes and HFO fuel burnt was 17,648 tonnes, aggregating to
70,886 tonnes. In comparison, the total quantity of IDO fuel
burnt in 2010 was 60,113 tonnes and HFO was 27,483 tonnes,
aggregating to 87,596 tonnes. The decrease in the total thermal
fuel burnt for 2011 was due to maximising hydro generation
from Monasavu as a result of the good rainfall received in 2011.
TOTAL IDO AND HFO FUEL USAGE
90
80
ELECTRICITY SALES REVENUE
70
Tonnes (000)
300
250
60
50
40
30
20
IDO
2011
2010
2009
2008
2007
2006
2005
2004
2003
100
2002
2001
10
150
2000
F$ million
200
HFO
50
2003
2004
2005
Residential
2006
2007
Commercial
2008
2009
2010
2011
Industrial
Depreciation expense increased by $1.08 million in 2011 due

to depreciation for additional assets transferred from capital
The average price of IDO fuel was $2,079 per tonne in 2011
(against a budget price $1,900 per tonne) compared to $1,539
per tonne in 2010. The IDO price peaked at $2,235 per tonne
in May 2011.The average price for HFO was $1,542 per tonne
in 2011 (against a budget price $1,500 per tonne) compared
with $1,244 per tonne in 2010.
30
Completed the Project Design Document (PDD)

for the Nadarivatu Hydro Project to obtain
carbon credit and the Clean Development
Mechanism (CDM) validation process is in
progress and is 95% complete. This process
will be fully completed by Q-2 2012. Shown
here is the newly constructed weir (dam) at
Nadarivatu.
IDO AND HFO FUEL PRICES

2200
2000
1800
1600
F$ Per tonne
1400
Network Augmentation Project ($5.5M), HFO Conversion

Project at Vuda ($6.4M), purchase of 7x1.6MW Cummings
Generator sets ($5.8M), Rural and Urban Reticulation works
carried out in 2011 ($12M), Protection Upgrade works ($2M),
replacement of motor vehicles ($2M) and other assets aquired
in 2011 of $2M.
FEA has acquired the necessary funding essential to complete
the Nadarivatu Hydro Project in 2012 and no more loans will
be required to complete the project. All the debt covenants
imposed by lenders were satisfactorily met in 2011. This is
essential to ensure that Government being the sovereign
guarantor of the FEA loans is not exposed.
1200
1000
800
600
400
200
Dec 04
Apr 05
Aug 05
Dec 05
Apr 06
Aug 06
Dec 06
Apr 07
Aug 07
Dec 07
Apr 08
Aug 08
Dec 08
Apr 09
Aug 09
Dec 09
Apr 10
Aug 10
Dec 10
Apr 11
Aug 11
Dec 11
IDO
HFO
Financial Strength
FEAs gearing ratio, as measured by Debt to Debt plus Capital
and Reserves excluding cash-in-hand, was 41.3% as at 31st
December 2011, well within the international benchmark
for power utilities of about 45% despite incurring Capital
Expenditure of $112 million in 2011.
The shareholder value of FEA was $472 million at the end of
2011 which increased from $414.7 million at the end of 2010
and $324.9 million at the end of 2002. FEAs total assets were
worth $983 million, a substantial increase from $925.6 million
in 2010 and $456.7 million in 2002. This shows that FEA has
added significant shareholder value over the last nine years
since the implementation of organisational reforms.
Capital Expenditure & Funding
FEA incurred a total of $112M on capital projects in 2011,
compared with $84M in 2010. This is one of the highest ever
in its history and was made possible through the good cash
flows generated and borrowed funds. The Capex of $112M
was made up of the Nadarivatu Hydro Project ($76M),
FEA has a total debt portfolio of around $359M as at 31

December 2011. This has to be serviced and repaid over the
next 15 years. Around $82M of the total debt is due in 2012,
$35M in 2013 and $20M in 2014 in addition to a CAPEX plan
of $60M annually for the period 2012 to 2014 as shown in the
table below.

2012
2013
2014
$M $M $M
Debt 37 35 20
CAPEX 60
60
60
Total Cash
95
80
97
As shown in the table above, FEAs financial perfomance over

the next 3 years will be critical in determining how successfully
it can fund the above committments. It will have to keep aside
cash surpus of at least $80M a year and this means that FEA
has to record good levels of profits to generate the necessary
cash reserves required. It is envisaged that FEA has to make a
profit after tax of at least $40M annually over the next 3 years
to achieve the above plans. Therefore it is imperative that FEA
adopt a business model that will achieve the desired profiability
level to ensure that it remains financially sustainable.
In view of FEAs huge capital expenditure plan, the Ministry
of Finance has approved the extension of the Government
guarantee facility to the end of December 2012. The
Government guarantee was initially approved by Cabinet in

October 2010 of an increase of $101M to cater for the funding
requirements of FEA.
This would greatly assist FEA to move towards achieving its

renewable energy target of 90% from renewable energy sources
by 2015.
FEA obtained a new loan of $20M to fund the local component

of the Nadarivatu Hydro Project. Further, it raised $5.5M
in bonds to fund other smaller critical capital projects. It
successfully negotiated with the Reserve Bank of Fiji to convert
an existing foreign exchange loan of US$30M into a Fijian
Dollar loan in 2011. This USD loan was fully converted into
a FJD loan by December 2011 resulting in a realised foreign
currency gain of around $1M. This conversion has eliminated
any future foreign currency exposure attached to this loan.
The Validation Process for carbon credits for the project under
the Clean Development Mechanism (CDM) is 90% complete
with the relevant processes completed and submission to the
UNFCCC is envisaged in June 2012.
FEAs Power Development Plan for 2010 to 2020 has identified

some Generation, Transmission and Distribution Projects that
have to be developed to meet the ever increasing demand of
electricity which is growing rapidly over the years. The total
investment required will be in excess of $1.5 Billion over the
next 10 years. FEAs contribution is estimated to be around
F$1.2 Billion with around $0.3 Billion coming from private
investors interested in developing the power generation sector.
Internal Audit and Risk Management
The Board approved Internal Audit Charter governs the roles
and responsibilities of the Internal Audit Department. The
Internal Audit reports to the FEA Board through the Board
Audit & Finance Sub-Committee. Internal Audit has greatly
assisted the management in identifying opportunities to
streamline existing processes and mitigating any deficiencies,
thus creating a strong internal control environment.
The Authority has adopted a risk based internal audit which
involves identifying, assessing and mitigating risks. In addition,
recommendations made in the internal/external audit reports
were implemented to improve the internal control processes.
As a result of timely audits and investigations, a number of staff
members were disciplined to reinforce values of the Authority.
Moreover, FEA continued its emphasis on the application and
implementation of best practice risk management strategies
across its business. An annual review of the FEAs Top
Business Risks was undertaken which indicated that the risk
levels for 16 out of the 21 Top Business risks improved by one
level whereas 5 business risks have remained at the same level.
FEA also continued with the external Riscore Programme at
its major critical sites namely Wailoa Power Station, Kinoya
Power Station, Labasa Power Station, Vuda Power Station and
the National Control Centre in its quest to manage the risks
at these critical power facilities. All the five stations increased
their Riscore scores where the improvement in scores for the
five sites ranged from 8% to 10%.
In September 2011, FEA renewed its main insurance
programme for another year after the insurers were satisfied
with FEAs business operations, including the level of
maintenance of the assets and the controls that are in place to
minimize or mitigate the risks.
POWER DEVELOPMENT PROGRAMME
FEAs Power Generation Projects
The construction of the 40MW Nadarivatu Renewable Hydro
Power Project is progressing well with overall completion of
90% by year end.
A full feasibility study for the Qaliwana Hydro Project has

been completed and discussions with interested Independent
Power Producers to develop this potential hydro project are
ongoing. In addition, two further studies on the review of the
Wailoa Downstream feasibility and the feasibility study of
the Upper Navua River Hydro development are currently in
progress with the final reports expected in June 2012.
The Wainisavulevu Weir Raising Project has commenced
construction in December 2011. The project is expected to be
completed in January 2014.
Augmentation of the Transmission Grid
The Qeleloa 33/11 kV Zone Substation was commissioned in
April 2011, followed by commissioning of Komo Park Zone
33/11 kV Substation in May and Nausori Zone 33/11 kV
Substation in July 2011.
An Environment Impact Assessment (EIA) study for the
construction of 132kV Wailoa Nacocolevu transmission line
was successfully completed in June 2011.
The electrical protection system on the two critical 132 kV
transmission lines from Wailoa to Vuda in the Western region
and from Wailoa to Cunningham in the Central region was
upgraded to state of the art transmission line protection
systems.
A Protection Review Study of the entire FEA power system
was carried out to ensure safe and reliable system operation.
Review of the FEA Grid Code was undertaken to align the FEA
Grid Code to international standards.
Transmission
The 132 kV Transmission Line Insulators were replaced
on fifty-nine (59) transmission towers. Refurbishment
works were completed on the 132kV circuit breakers at both
ends of the Vuda Wailoa and the Wailoa Cunningham
transmission lines.
The design of the dual circuit 33kV sub-transmission network
from Vuda to Waqadra and single circuit from Vuda to
Pineapple Corner in the Western Region was completed by
the FEA in 2011.
33 kV Sub-transmission Development in the North
Design of a 33kV power line from Cawaira power station
in Labasa to Dreketi and the Land acquisitions for the zone
substations at Wailevu, Seaqaqa and Dreketi were completed
in 2011. Orders were placed for the procurement of power
poles, conductors and other line hardware by the end of the
year.
On completion of the project, the power will be transmitted
from Cawaira Power Station to Seaqaqa and Dreketi at 33kV.
The 33kV sub-transmission voltage will be stepped down at
Seaqaqa and Dreketi zone substations to 11kV and power
will then be supplied to the customers via the 11kV/415V
31
32
FEA completed the $34M Major Network Augmentation Project with the full
commissioning of the Nausori and Kinoya Zone sub-stations.
distribution network that already exists in Seaqaqa or will be

constructed as part of this project in Dreketi.
The total estimated cost of the project is $14.3 Million and
this cost is being equally shared between the Government and
FEA. The Government paid $3.5 Million towards the project
in 2011 with the remaining payment to be made in 2012.
Rural & Urban Projects
At the end of 2011, a total sum of $9,326,141 was authorized for
rural, commercial/industrial, system reinforcement projects
and contract works. Of this amount $6,076,803 was authorized
for construction of thirty (31) rural electrification projects.
$2,402,255 was authorized for construction of forty-six (46)
commercial/industrial projects while $468,293 was authorized
for nine (9) distribution system reinforcement schemes and
$378,790 was utilized for six (6) contract jobs.
COMMERCIAL
The Fiji Electricity Authoritys (FEA) Commercial division
comprises of the Supply Chain and Regulatory operational
units which have a total of seventy - two (72) employees.
Supply Chain
As one of FEAs enabling units, the Supply Chain unit has
maintained its ongoing focus on optimizing its performance
in the critical result areas of procurement of goods & services,
inventory management, as well as Fleet & Property Services.
Performance optimization of division was achieved through
observing the following simple but key objectives:

Increase Speed of delivery of goods & services rendered to

internal & external customers
Improve Quality of goods & services rendered to internal

& external customers and
Reduce Costs of providing goods & services to internal &

external customers
INFORMATION & COMMUNICATION TECHNOLOGY

A robust ICT system performance level of 99.976% was
achieved in 2011, very close to international best practice of
99.999%. FEA has virtualized the IT Environment which has
greatly added to the Performance, Security, Scalability and
Reliability of the ICT Systems while containing costs at a low
level. This has resulted in considerable savings in providing
additional resources for new systems such as the new Online
Prepaid Electricity Vending System.
This system installation was very cost-effective, smooth and
completed in tight deadline thus bringing relief to the Pre-paid
customers living in remote areas.
To enhance and improve the information security and Disaster
Recovery Capabilities of FEA, the following have been installed
& commissioned:

Kiwi Syslog Server to keep the audit logs of various IT

systems
Veeam Backup and Replication to ensure the back-up

of the virtual environment and also to keep the Disaster
Recovery Centre updated in real-time.
To further strengthen the FEAs radiotelephone network in

the lower Sigatoka Valley and the Sigatoka/Korotogo areas,
a new Radio Repeater was developed at the Butoni Wind
Farm. This is to complement the PP3 Radio Repeater that
was developed the previous year thus ensuring the reliable
RT Communications in the service areas most of which were
newly electrified Rural Electrification Projects in the remote
areas. This also helped in adding two new auto-reclosers with
remote control capability at Matanipusi Hill and the Warwick
Hotel thus enhancing the reliability of the FEA Electricity
Network in the surrounding areas.
The SCADA performance was very resilient inspite of some
major problems encountered in the main server due to the
availability of the Disaster Recovery system for failover.
Thus the overall ICT performance was excellent enabling the
superior performance of FEA as a whole in terms of delivering
reliable electricity to the customers.
These key operational objectives are aligned to the Corporate

Plan Objective of achieving 2.5% ROSF target set by the
Government. Also attached to this objective is the Corporate
Scorecard Key Performance Indicator (KPI) requirement
for stockholding level which set a target of not more than
$13million.
Given the above Corporate and aligned divisional objectives,
the following key outcomes were achieved as at 31st December
2011;
A) Procurement of goods & services

the actual average tender turnaround time of 5.28 weeks

was accomplished for the year (for tenders valued to > =
$10k AND < = $100k) against a target of 6 weeks
In addition savings of around $1.2 million derived via

procurement/tender negotiations and other supply chain
efficiency cost initiatives, has enhanced FEAs overall
financial performance in terms of being able to maintain
opex costs within budget.
B) Sound Inventory management, vigilance and best

practices

FEA has achieved the inventory stockholding level KPI

(excluding fuel & engine spares) of $11.33 million, against
a corporate target of $13 million.
Stock-turns KPI (Improvement of rate of stock Utilization)

was achieved at 18.1% against a target of greater than 6%.
This achievement indicates that FEAs stock items has been
managed professionally and that stock has been turned
over regularly and has contributed to significant savings in
FEAs working capital/opportunity cost.
33
34
C) Fleet & Property Services

Although the Corporate Fleet Accidents KPI target was

not achieved i.e. actual accident count of 20 (FEA driver
initiated) against a target of 9 , our Fleet teams have an
ongoing commitment to work with the Health & Safety
team (HSE) to mitigate and reduce driving risks through
specific driver attitude training including specialist vehicle
training programmes.
Facilitating process of re-acquiring the Head Office
building complex property.
The following key outcomes were achieved by this Unit as at

31st December 2011
A) Maintenance of Electrician & Contractor Registers

total number of registered licensed electricians were 2,001

whilst only 1,249 had valid licences;
total number of registered electrical contractors 249 and

only 176 had valid licences;
The public were advised of the importance of engaging

only valid license holders for both registered electricians
and electrical contractors and the list of licensed electrical
contractors was published quarterly in the Fiji Sun.
Regulatory
The Fiji Electricity Authority Regulatory unit is tasked with
the major core function of the regulation and compliance
enforcement of the Electricity Act for all stakeholders in the
Electricity sector. Its other functions include (but are not
limited) to the following:
registration and licensing of electricians & electrical
contractors;
licensing of electrical generation equipment and retailers
including licensing of new Independent Power Producers
(IPPs);
ensuring industry compliance, in accordance with the
Electricity Act and AS/NZS Wiring standards;
electrical testing of imported electrical appliances and
fittings used in Fiji upon request.
B) Number of new installations inspected and approved for

connections

A total of 5,922 new connections were made in 2011

of which 5,450 were for domestic customers and 472
commercial customers.
C) Target of fixing 90 per cent of the power line faults in

urban areas within 3 hours and for rural areas within 4
hours

Exceeded target in achieving 97% for rural customers and

94 % for urban customers.
D) Ongoing and proactive Public Safety Awareness

campaign

Achieved target of 4 safety awareness presentations to

various communities, villages & schools in the Western
Division to ensure life and property are protected and safe.
In 2011, FEA has continued its support of the proposed transfer

of the Regulatory function by collaborating and providing
relevant policy & operational information to the Ministry of
Public Enterprise engaged consultant, Minter Ellison.
PAGE 36
STATEMENT BY MEMBERS OF THE AUTHORITY

PAGE 37
INDEPENDENT AUDIT REPORT

PAGE 38
STATEMENT OF COMPREHENSIVE INCOME

PAGE 39
STATEMENT OF FINANCIAL POSITION

PAGE 40
STATEMENT OF CASH FLOW

PAGE 41
STATEMENT OF CHANGES IN CAPITAL AND
RESERVES

PAGE 42 - 62 NOTES TO AND FORMING PART OF THE
FINANCIAL STATEMENTS
35
36
FIJI ELECTRICIT Y AUTHORIT Y | FINANCIAL REPORT 2011
STATEMENT BY MEMBERS OF THE AUTHORITY

For the year ended 31 December 2011
In accordance with a resolution of the Members of the Fiji Electricity Authority, in the opinion of the Members:
1.
the financial statements and accompanying notes show a true and fair view of the financial position, results of operations,
changes in capital and reserves and cash flows of the Fiji Electricity Authority as at and for the year ended 31 December
2011.

2.
the statements have been prepared in accordance with the provisions of the Electricity Act 1966 (Cap 180) and International
Financial Reporting Standards.
3.
the basis of preparation of the financial statements and the classification and carrying amounts of assets and liabilities as
stated in these financial statements are appropriate.

Dated at Suva this 15th day of May 2012.

Nizam -ud -Dean Gardiner Whiteside
CHAIRMAN DEPUTY CHAIRMAN

37
INDEPENDENT AUDIT REPORT

Financial Statement for the year ended 31 December 2011

I have audited the accompanying financial statements of Fiji Electricity Authority (Authority), which comprise the statement
of financial position as at 31 December 2011, and the statement of comprehensive income, statement of changes in capital
and reserves and statement of cash flow for the year then ended, and a summary of significant accounting policies and other
explanatory information as set out on pages 38 to 62.

Directors and Managements Responsibility for the Financial Statements
Directors and management are responsible for the preparation and fair presentation of these financial statements in accordance
with International Financial Reporting Standards and the requirements of the Electricity Act 1966. This responsibility includes:
designing, implementing and maintaining internal control relevant to the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Auditors Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I have conducted my audit in
accordance with International Standards on Auditing. Those standards require that I comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence that I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Audit Opinion
In my opinion:
a)proper books of account have been kept by the Fiji Electricity Authority, so far as it appears from my examination of those
books, and
b) the accompanying financial statements which have been prepared in accordance with International Financial Reporting
Standards:

(i)are in agreement with the books of accounts; and
(ii)to the best of my information and according to the explanations given to me:
a)give a true and fair view of the state of affairs of the Fiji Electricity Authority as at 31 December 2011 and of
the results, movement in reserves and cash flows of the Authority for the year ended on that date; and
b) give the information required by the Electricity Act 1966 (Cap 180) in the manner so required.

I have obtained all the information and explanations which, to the best of my knowledge and belief, were necessary for the
purposes of the audit.
Suva, Fiji Tevita Bolanavanua

15th May 2012 AUDITOR GENERAL

38
STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2011

Notes
2011
2010

$000
$000

Revenue - electricity sales

5
288,778
226,945
Other operating revenue
5
16,766
4,654

Total revenue
305,544
231,599
Personnel costs
(17,941)
(17,447)
Fuel costs
(137,881)
(126,756)
Electricity purchases
(14,401)
(12,611)
Lease and rent expenses
(1,830)
(1,688)
Depreciation on property, plant and equipment
(29,914)
(29,655)
Amortisation of intangible assets
(524)
(528)
Cyclone Mick & Tomas - Restoration costs
-
(1,445)
Other operating expenses
(39,584)
(24,652)

Total expenses
(242,075)
(214,782)

Profit before finance costs, income tax and interest in

joint venture
63,469
16,817

Finance Cost:
Finance cost
Interest income
Unrealised foreign exchange gain, net
Profit before income tax and interest in
joint venture

(12,054)
741
271
(12,631)
1,278
7,534
52,427
12,998
Share of profit of joint venture

192
Profit before income tax

52,427
13,190

Income tax expense
7(a)
(517)
(4,786)

Profit after income tax
51,910
8,404
Other comprehensive income
Total comprehensive income for the year

51,910
8,404

The above statement of comprehensive income has been prepared in accordance with the International Financial Reporting
Standards (IFRS) and should be read in conjunction with the accompanying notes.

39
STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2011

Notes
2011
2010

$000 $000

CAPITAL AND RESERVES
Retained profits
403,411
351,501
Capital contribution
68,641
63,199

472,052
414,700
Represented by:
CURRENT ASSETS
Cash on hand and at bank
8
3,640
-
Held to maturity financial assets
12(b)
23,409
55,837
Receivables and prepayments
9
42,888
32,617
Inventories
10
18,072
16,142
Withholding income tax recoverable
-
328

88,009
104,924

NON-CURRENT ASSETS
Property, plant and equipment
11
890,722
809,081
Available for sale financial assets
12(a)
-
233
Intangible assets
13(b)
2,262
2,502
Deferred tax assets
7(b)
2,017
8,834

895,001
820,650
TOTAL ASSETS
983,010
925,574
CURRENT LIABILITIES
Bank overdraft
8
-
276
Trade and other payables
14
43,407
49,626
Provision for employee entitlements
15
6,584
1,710
Interest bearing borrowings
16
36,661
71,628
Income tax payable
4,535
-

91,187
123,240
NON-CURRENT LIABILITIES
14
49,679
40,047
Provision for employee entitlements
15
-
4,670
16
322,624
280,181
Deferred income
17
10,706
11,563
Deferred tax liabilities
7(c)
36,762
51,173

419,771
387,634
TOTAL LIABILITIES
510,958
510,874
NET ASSETS
472,052
414,700

The above statement of financial position has been prepared in accordance with the International Financial Reporting Standards
(IFRS) and should be read in conjunction with the accompanying notes.

40
STATEMENT OF CASH FLOW

FOR THE YEAR ENDED 31 DECEMBER 2011
Notes
2011
2010

$000 $000
Cash flows from operating activities

Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Insurance proceeds for business interruption
Advance tax / withholding tax paid (Net)
296,394
(237,226)
770
(24,069)
3,756
(3,246)
Net cash flows from operating activities
36,379
223,544
(172,203)
1,240
(24,565)
34
2
28,052
Cash flows from investing activities

Acquisition of property, plant and equipment
Acquisition of intangible assets
Proceeds from loan advanced to joint venture
Proceeds from repayment of joint venture loan
Net redemption/(payment) for term deposits
Acquisition of Sustainable Energy Limited
Proceeds from capital contribution for general extension
Proceeds from disposal of motor vehicle
(79,289)
(284)
-
-
32,457
-
5,442
226
(80,807)
(470)
10,356
2,174
(1,310)
(2,270)
4,256
44
Net cash flows used in investing activities
(41,448)
(68,027)
Cash flows from financing activities

Repayment of bonds and loans
Proceeds from bonds and loans
(17,039)
25,500
(18,576)
22,123
Net cash flows from financing activities
8,461
3,547
Net increase / (decrease) in cash held
3,392
(36,428)
Effect of exchange rate movement on cash and cash equivalents

Transfer of Sustainable Energy Limited cash balance
Cash and cash equivalents - at the beginning of the year
298
226
(276)
(338)
36,490
Cash and cash equivalents - at the end of the year

8
3,640
(276)

The above statement of cash flow has been prepared in accordance with the International Financial Reporting Standards (IFRS) and

should be read in conjunction with the accompanying notes.
41
STATEMENT OF CHANGES IN CAPITAL & RESERVES


Balance as at 31 December 2009
Movement in reserves
Total comprehensive income for the year ended 31 December 2010
Movement in reserves
Total comprehensive income for the year ended 31 December 2011
Capital
Contributions
$000
58,943
4,256
-
Retained
Profits
Total
$000
$000
343,097
-
402,040
4,256
8,404
8,404
63,199
351,501
414,700
5,442
5,442
51,910
51,910
403,411
472,052
-
68,641

The above statement of changes in capital and reserves has been prepared in accordance with the International Financial Reporting
Standards (IFRS) and should be read in conjunction with the accompanying notes.
42
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Statement of Compliance
The financial statements have been prepared in accordance with the Electricity Act 1966 (Cap 180) and International Financial
Reporting Standards (IFRS) as required by the Fiji Institute of Accountants.
Issue of Financial Statements
The financial statements were approved for issue by the Authoritys Board of Directors at its meeting held on 15 May 2012.
Basis of Preparation
The financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current
assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets.
In the application of IFRS, management is required to make judgments, estimates and assumptions about carrying values of
assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which
form the basis of making the judgments. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods. Judgments made by management in the application of IFRS that
have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year
are disclosed, where applicable, in the relevant notes to the financial statements.
Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the
concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.
Standards, amendments and interpretations issued but not yet effective
The following standards, amendments and interpretations to existing standards have been published and are mandatory for the
accounting periods beginning on or after 1 January 2012 or later periods, but the Authority has not early adopted them. No
significant impact is expected to arise out of these standards, amendments and interpretations.
IAS 1 (Amendment ), Financial Statement Presentation - Presentation of items of Other Comprehensive Income. ( 1 July
2012)
IFRS 9 (Amendment), Financial Instruments - Classification and measurement. (1 January 2013)
IFRS 13 ( Amendment), Fair Value Measurement. (1 January 2013)
The following significant accounting policies have been adopted in the preparation and presentation of the financial
statements:
(a)
Allowance for doubtful debts
The Authority establishes an allowance for any doubtful debts based on a review of all outstanding amounts at year-end. Bad
debts are written off during the period in which they are identified.
(b)
Bond instruments
The bonds issued are recorded at cost which reflects the face value of these instruments. Transaction costs on the issue of
bond instruments are capitalised and amortised to the statement of comprehensive income over the currency life of the bond
instruments. Transaction costs are the costs that are incurred directly in connection with the issue of those bond instruments and
which would not have been incurred had those instruments not been issued.
(c)
Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised
cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of
comprehensive income over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Authority has an unconditional right to defer settlement of the liability
for at least 12 months after the balance sheet date.

1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTD)
(d)
Borrowing costs
The borrowing costs that are directly attributable to major capital expenditures and projects under construction are capitalized
as part of the cost of these assets. Other borrowing costs are recognized as an expense in the year in which they are incurred.
The government guarantee fees on loans drawdown specifically for capital projects are capitalised. Other guarantee fees paid are
expensed.
(e)
Capital contribution
A 100% refundable capital contribution represents the cost of the extension, received from the developer or a prospective
consumer. The cost of the extension is the estimated cost incurred from the Authoritys nearest mains supply point capable
of providing the assessed load required. The developer or a prospective consumer applying for a general extension provides a
100% refundable capital contribution in relation to the cost of the extension which is credited to trade and other payables and
is refunded to the customer over a period of 5 and 8 years. This is in accordance with the determination by the Fiji Commerce
Commission.
(f)
Cash and cash equivalents
For the purposes of the statement of cash flow, cash and cash equivalents comprise cash on hand, short term deposits held with
banks and bank overdrafts. Bank overdrafts are shown within borrowings under current liabilities in the statement of financial
position.
(g)
Comparative figures
Where necessary, amounts relating to prior years have been reclassified to facilitate comparison and achieve consistency in
disclosure with current year amounts.
(h)
Deferred income
Government grant in aid and assets acquired at no cost to the Authority are capitalised and systematically recognised as other
income on the basis of the expected lives of the assets to which the grants relate.
(i)
Employee benefits
i) Sick leave
The provision is in relation to unutilised sick leave of non contract staff in accordance with their terms and conditions
of employment and is calculated on current salary and wage rates.
ii) Annual leave

The provision for annual leave represents the amount which the Authority has a present obligation to pay for

employees services provided up to the balance date. The provision has been calculated on the current wage and salary
rate.

iii) Long service leave
The liability is determined by the conditions of employment, employees services provided up to the balance date and
is calculated on the current wage and salary rate.
iv) Retirement benefit
The liability is determined by the conditions of employment, employees services provided up to the balance date and
is calculated on the current wage and salary rate.
In view of the implementation of the Essential National Industries (Employment) Decree, with effect from 7th November 2011,
all the Long Service Leave and Retirement Benefit Entitlements for employees have ceased. However, the benefits accrued up to
7th November 2011 will be paid to the employees in 2012.
43
44

1.
(j)

Foreign currency translation
Transactions denominated in a foreign currency are translated to Fiji currency at the exchange rate at the date of the
transaction.
Foreign currency receivables and payables at balance date are translated to Fiji currency at exchange rates current at balance
date.
All gains and losses arising therefrom (realised and unrealised) are brought to account in determining the profit or loss for the
year.
(k)
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the weighted average cost principle and
includes expenditure incurred in acquiring the stock and bringing it to its existing condition and location. Consumables are
valued at cost plus the associated delivery charges.
(l)
Impairment of assets
At each balance sheet date, the Authority reviews the carrying amounts of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount
of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Authority estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre -tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately
in the statement of comprehensive income, unless the relevant asset is carried at fair value, in which case the impairment loss is
treated as a revaluation decrease.
(m)
Intangible assets
a) Investments in movie productions:
Investment in movie productions have been valued at cost and reduced by an impairment charge to arrive at a
carrying amount the Authority expects to recover from the exploitation of the copyright in accordance with the
Production Investment Agreement.
b) Computer software:
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the
specific software. These costs are amortised over their estimated useful lives (three to five years).
Costs associated with developing or maintaining computer software programmes are recognised as an expense as
incurred. Costs that are directly associated with the development of identifiable and unique software products
controlled by the Authority, and that will probably generate economic benefits exceeding costs beyond one
year, are recognised as intangible assets.
(n)
Leased assets
Fiji Electricity Authority, the Monasavu landowners and the iTaukei Land Trust Board (iTLTB) have in 2005 signed an agreement
to lease approximately 23,000 acres of the Monasavu catchment area for a period of 99 years in return for specified payments.
These lease committments are disclosed under note 19 to the financial statements.


1.
(o)

Payables
Trade payables and other accounts payable are recognised when the Authority becomes obliged to make future payments resulting
from the purchase of goods and services.
(p)
Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation and impairment loss. Cost includes expenditure
that is directly attributable to the acquisition of the item. Cost of leasehold land includes initial premium payment or price paid to
acquire leasehold land including acquisition costs.
Additions
While expenditure on assets with a value of less than $1,000 is generally not capitalised, physical control is maintained over all
items regardless of cost.
Depreciation rates
Depreciation is calculated on the straight line method to write off the cost of each asset over their estimated useful lives as
follows:

Rates
Leasehold land
0.50% - 1.25%
Buildings - Concrete
1.25%
Buildings - Others
1.25%
Hydro Assets - Dams
1.33% - 2.50%
Hydro Assets - Tunnels
1.33% - 2.44%
Hydro Assets - Plant and Machinery
2.50% - 3.00%
Thermal assets
4.00% - 7.00%
Transmission
2.50%
2.86%
Communication system & control
Reticulation
4.00%
Wind Mill
5.00%
Furniture & fittings
Motor vehicles
Computers
7.00% - 24.00%
20.00%
33.30%

Other fixed assets except for capital spares, are depreciated when they are brought into service.
Freehold land are not depreciated. Leasehold land are amortised over the remaining lease period.
Capital spares
Capital spares represent items held primarily for use in thermal stations in the event of a breakdown. In recognition of the
increased risk of obsolescence over a protracted period, capital spares are amortised in line with the depreciation rates applicable
to the related plant and machinery. Capital spares are reported as part of Authoritys fixed assets.
Disposals
Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included in the statement
of comprehensive income.
45
46

1.
(p)
Property, plant and equipment (Contd)
Repairs and maintenance

Repairs and maintenance are charged to the income statement during the financial period in which they are incurred. The cost of
major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of
the originally assessed standard of performance of the existing asset will flow to the Authority. Major renovations are depreciated
over the remaining useful life of the related asset.
(q)
Provisions
Provisions are recognised:

- When the Authority has a present legal or constructive obligation as a result of past events;
- It is probable that an outflow of resources will be required to settle the obligation; and
- The amount can be reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
(r)
Reporting currency
All figures are reported in Fiji currency.

(s)
Revenue recognition
Electricity income
Electricity income is recorded in the statement of comprehensive income on an accrual basis by estimating the usage for customers
to balance date.
Other income
Rental income earned from leasing FEA properties is recorded in the statement of comprehensive income on an accrual basis.
Interest income is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.
(t)
Rounding off amounts
Amounts in the financial statements have been rounded off to the nearest thousand dollars unless specifically stated to be
otherwise.
(u)
Taxation
Current tax:
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax
loss for the year. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date.
Current tax for current and prior years is recognised as a liability or asset to the extent that it is unpaid or refundable.
Deferred tax:
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising
from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base
of those items.

1.
(u)
Taxation (Contd)
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to
the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or
unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business
combination) which affects neither taxable income nor accounting profit.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the periods when the asset and
liability giving rise to them are realised or settled, based on tax rates and tax laws that have been enacted or substantively enacted
by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from
the manner in which the Authority expects, at the reporting date, to recover or settle the carrying amount of its assets and
liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the
Authority intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period:
Current and deferred tax is recognised as an expense or income in the statement of comprehensive income, except when it relates
to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises
from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or
excess.
(v)
Segment information
The Authority is not required to report segment information as it is not applicable to the nature of the Authoritys operations.
Whilst electricity revenue is distinguished by key operating segments, this is done purely for information purposes. The Authority
has only one product in electricity, and costs associated with this product are totally common to all operating segments, and it
is not possible nor practical to attempt to allocate costs across the operating segments. The Authoritys power generating system
and distribution are operated on a fully integrated basis.
(w)
Value Added Tax (VAT)
Revenues, expenses, assets and liabilities are recognised net of the amount of value added tax (VAT), except:

i) Where the amount of VAT incurred is not recoverable from the taxation authority, it is recognised as part of the
cost of acquisition of an asset or as part of an item of expense; or
ii) for trade receivables and trade payables which are recognised inclusive of VAT.
The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables.
47
48

2.
FINANCIAL RISK MANAGEMENT
2.1
Financial risk factors

The Authoritys activities expose it to a variety of financial risks: market risk (including currency risk, interest rate
risk and price risk), credit risk and liquidity risk. The Authoritys overall risk management programme focuses on
the unpredictability of financial markets and seeks to minimise potential adverse effects on the Authoritys financial
performance. The Authority does not enter into or trade financial instruments, including derivative financial
instruments, for speculative purposes. The Authoritys activities expose it primarily to the financial risks of changes in
foreign currency exchange rates and interest rates.
(a)
Market risk
(i) Foreign exchange risk
The Authority undertakes various transactions denominated in foreign currencies, hence exposures to exchange rate
fluctuations arise. Exchange rate exposures are closely managed within approved policy parameters.
As at year end, US$12.8 million term deposits are the only assets denominated in foreign currencies. Hence, changes
in the US dollars by 10% (increase or decrease) is expected to have significant impact on the net profit and equity
balances currently reflected in the Authoritys financial statements.
Held to Maturity Average Exchange

Held to maturity
financial assets (US$000) rate (USD)
financial assets (F$000)
31 December 2011 (Actual)
US$ 12,858
0.5493
23,409
Exchange rates - strengthen by 10%
US$ 12,858
0.6042
21,281
Exchange rates - weaken by 10%
US$ 12,858
0.4944
26,007
Based on the above, if average exchange rates strengthen by 10% the Authoritys investments in held to maturity
financial assets would decrease by $2.13 million and if the average exchange rates weaken by 10% the Authoritys
investments in held to maturity financial assets would increase by $2.60 million.
However, a risk arises on the Authoritys obligation with respect to the foreign currency loan of US$70 million (2010:
US$97.5 million) which remains outstanding as at year end for funding of certain major capital projects. For the year
ended 31 December 2011, the restatement of the Authoritys foreign currency loans has resulted in an unrealised
foreign exchange loss of $70k. Further sensitivities are provided to establish the impact to the profit before tax if foreign
currency exchange rate differs by 10% (increase or decrease) from that used at balance date:
Foreign currency Average Exchange

Foreign currency
borrowings (US$000)
rate (USD)
borrowings (F$000)
US$ 70,000
0.5493
127,435
Exchange rates - strengthen by 10%
US$ 70,000
0.6042
115,856
Exchange rates - weaken by 10%
US$ 70,000
0.4944
141,586
Based on the above, if average exchange rates strengthen by 10% the Authoritys foreign currency borrowings would
decrease by $11.58 million and if the average exchange rates weaken by 10% the Authoritys foreign currency borrowings
would increase by $14.15 million.
Furthermore, the Authority has awarded the Nadarivatu Renewable Hydro Power Project to a contractor based in
China namely Sinohydro Corporation Limited for a contract amount of US$124.8 million. Accordingly, changes in
the US dollars by 10% (increase or decrease) is expected to have a significant impact on the cost of the Nadarivatu
Renewable Hydro Power Project . As at balance date, the balance of the Sinohydro contract is US$13.06 million.
49

2.
FINANCIAL RISK MANAGEMENT (CONTD)
2.1
Financial risk factors (Contd)

The Authority enters into forward foreign exchange contracts on a selective basis to manage its exposure to foreign
exchange rate risk.
Forward exchange contracts are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at each reporting date. These forward exchange contracts do not qualify for
hedge accounting. However, there were no outstanding forward foreign exchange contracts as at 31 December 2011.

(ii) Price risk
The Authority does not have investments in equity securities and hence is not exposed to equity securities price risk.
However, the Authority is exposed to commodity price risk in the form of fuel purchased through a local agent from
offshore. The volatility on international fuel prices and its impact on FEAs profitability is given below considering two
scenarios based on price, quantity mix, demand growth and hydro availability:
Average Fuel Price

(F$/Metric Tonne)
Consumption
(Metric Tonne)
Fuel costs
$000
1,945.11
70,886
137,881
Fuel price-Increase by 10%
2,139.62
70,886
151,669
Fuel Price-Decrease by 10%
1,750.60
70,886
124,093
Based on the above, if fuel price increase or decrease by 10%, the fuel costs to the Authority would increase or decrease
by $13.8 million annually. The above senstivity calculation is based on the 2011 fuel consumption levels.
(iii) Regulatory risk

The Authoritys profitability can be significantly impacted by regulatory agencies established which govern and

control the electricity sector in Fiji. Specifically, fuel surcharges, regulatory fees and electricity tariffs are regulated by
the Fiji Commerce Commission.

(iv) Interest rate risk
The Authority has significant interest-bearing assets in the form of short-term cash deposits. These are at fixed
interest rates and hence there are no interest rate risks during the period of investment. For re-investment
of short and long term cash deposits, the Authority negotiates an appropriate interest rate with the banks and
invests with the bank which offers the highest interest return.
Given the fixed nature of interest rates described above, the Authority has a high level of certainty over the impact on
cash flows arising from interest income. Accordingly, the Authority does not require simulations to be performed
over impact on net profits arising from changes in interest rates.
All debts of the Authority raised through bond issues bear fixed interest rates. Therefore, the Authority is not exposed
to interest rate risk.
In relation to the borrowings from Suva City Council, the Authority is not exposed to interest rate risk as it borrows
funds at fixed interest rates.
In relation to the borrowings from other commercial banks, the Authority to certain extent is not exposed to interest
rate risk as certain borrowed funds are at fixed interest rates, for the agreed term. Thereafter, the interest rates are re-
negotiated and new interest rates are agreed upon. The risk is managed closely within the approved policy parameters.
The Authority did not enter into any interest swap contracts.
50

2.
FINANCIAL RISK MANAGEMENT (CONTD)
2.1
Financial risk factors (Contd)
(b)
Credit risk
Credit risk arises from deposits with banks, as well as credit exposures to customers, including outstanding receivables.
For deposits with banks, only reputable parties with known sound financial standing are accepted. Trade accounts
receivable consist of a large number of customers, residential, industrial and commercial. The Authority does not
have any significant credit risk exposure to any single counterparty or any group of counterparties having similar
characteristics. The carrying amount of financial assets recorded in the financial statements, net of any allowances for
losses, represents the Authoritys maximum exposure to credit risk.
(c)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash to ensure availability of funding. The Authority
monitors liquidity through rolling forecasts of the Authoritys cash flow position. Overall, the Authority does not see
liquidity risk as high given that a reasonable portion of revenues are billed and collected.
The table below analyses the Authoritys financial assets and liabilities into relevant maturity groupings based on the
remaining period at the balance date to the contractual maturity date. The amounts disclosed in the table are based on
the contractual undiscounted cash flows.
Fair value estimation

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair
values. The carrying values of financial liabilities and financial assets and provisions are estimated to approximate their
fair values.

Financial assets:
Less than
2 to 5 years
one year
$000
$000
More than
Total
5 years
$000
$000

Held to maturity financial assets
23,409
23,409
Receivables and prepayments
42,888
42,888
Total
66,297
66,297
Financial liabilities:
43,407
12,106
37,573
93,086
Bonds payable
22,000
15,500
75,500
113,000
14,661
118,653
112,971
246,285
Total
80,068
146,259
226,044
452,371
51

CRITICAL ACCOUNTING ESTIMATES, JUDGMENTS AND ASSUMPTIONS
Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
The Authority makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(a)
Impairment of property, plant and equipment
The Authority assesses whether there are any indicators of impairment for all property, plant and equipment at each
reporting date. Property, plant and equipment are tested for impairment and when there are indicators that the carrying
amount may not be recoverable, reasonable provision for impairment are created. As at balance date, no provision for
impairment has been made as the Authority reasonably believes that no indicators for impairment exist.

(b)
Impairment of accounts receivable
Impairment of accounts receivable balances is assessed at an individual level and impairment tests are performed on a
more specific basis. All receivable balances relating to the closed customer accounts are estimated to have been impaired
and are accordingly provided for.
(c)
Deferred tax assets
Deferred tax assets are recognized for all unused tax losses to the extent that taxable profits will be available against
which the losses can be utilized. Significant management judgement is required to determine the amount of deferred
tax assets that can be recognized, based upon the likely level of future taxable profits together with future planning
strategies.
(d)
Provision for stock obsolescence
Provision for stock obsolescence is assessed and raised on a specific basis based on a review of inventories. Inventories
considered obsolete or un-serviceable are written off in the year in which they are identified.
(e)
Customer security deposit
The customer security deposits are classified as Current and Non Current based on the Authoritys past experience with
the refund of the deposit to customers.
CAPITAL RISK MANAGEMENT
The Authoritys objectives when managing capital are to safeguard the Authoritys ability to continue as a going concern in order
to provide returns and benefits for stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The
Authority monitors capital on the basis of the gearing ratio.
The gearing ratios at 31 December 2011 and 2010 were as follows:

31-Dec-11
31-Dec-10
$000 $000
Total borrowings (Note 16)
359,285
351,809
Less: Held to maturity financial assets (note 12 (b))
(23,409)
(55,837)
Add: Bank Overdraft /(Cash on hand and at bank (note 8))
(3,640)
276
Net debt
332,236
296,248
Total capital and reserves
472,052
414,700
Total capital (total capital and reserves plus net debt)
804,288
710,948
Gearing ratio (net debt / total capital and reserves x 100)
41.31%
41.67%
The movement in the gearing ratio during 2011 resulted primarily from the net repayments of bonds of $11.5M and the increase
in capital and reserves as a resullt of the profits recorded during the year.
52

5.
OPERATING REVENUE

2011
2010

$000 $000

ELECTRICITY SALES
Commercial
137,733
114,936
Industrial
71,399
49,541
Domestic
72,340
58,149
Others
7,306
4,319
Total electricity sales
OTHER OPERATING REVENUE
Bad debts recovered

Business interruption insurance claims received
Contract sales
Deferred income
Freight refund
Fuel surcharge
Gain on disposal of property, plant and equipment
Lease rental - fibre optic
Power pole rentals
Rentals
Realised exchange gain, net
Sales and commissions
Service and licence fees
Training rebates
18
10,919
1,014
857
452
-
220
149
663
38
1,663
205
518
50
Total other operating revenue
16,766
4,654
Total revenue
305,544
231,599
6.
PROFIT BEFORE INCOME TAX
Profit before income tax has been determined

after charging the following expenses:
Amounts recovered for doubtful debts

Auditors remuneration for auditing services
Bad debts written off
Professional fees for other services
Directors fees
Depreciation on property, plant and equipment
Amortisation of intangible assets
Government guarantee fees
Insurance
Personnel costs
Unrealized foreign exchange loss
288,778
(30)
21
139
398
48
29,914
524
418
4,309
17,941
70
226,945
5
34
448
856
632
6
34
149
663
45
471
631
626
54
(95)
21
232
415
60
29,655
528
900
3,613
17,447
3,687
53

7.
a) INCOME TAX EXPENSE

2011
2010
$000 $000
The prima facie income tax on the pre-tax profit reconciles to the income
tax expense as follows:
Profit before income tax
52,427
13,190
Prima facie income tax payable at 28%
14,680
3,693
Tax effect of amounts which are not deductible (taxable)

in calculating taxable income:
- Employee taxation scheme
(19)
(13)
- Share of profit of joint venture
-
(54)
- Deferred income
(240)
(240)
Temporary difference brought to account
Effect of change in income tax rate
Over provision in prior year
Income tax expense attributable to profit
1,400
(13,898)
(6)
517
4,786
b) DEFERRED TAX ASSET
The deferred tax assets consist of the following at future tax rates:
Tax losses
Provision for employee benefits
Unrealised exchange losses
-
897
42
1,078
5,969
1,308
67
1,490
2,017 8,834
c) DEFERRED TAX LIABILITY
The deferred tax liabilities consist of the following taxable temporary

differences at future tax rates:
Property, plant & equipment

Unrealised exchange gain
35,187
1,575
49,063
2,110
36,762
51,173
Income tax expense comprises movements in:
Deferred tax assets

Deferred tax liabilities
Income tax payable
6,817
(14,411)
8,111
517
2,163
2,623
-
4,786
The change in tax rate from 28% in 2011 to 20% in 2012 requires the Deferred Tax Asset (DTA) and Deferred Tax Liability (DTL)
to be restated in the Statement of Financial Position. The impact is a substantial reduction in the income tax expense by $14.7M
after reducing the DTL in the Statement of Financial Position and increase in the income tax expense by $0.81M after reducing
the DTA in the Statement of Financial Position to eliminate the carry forward tax losses. This resulted in a substantial reduction
to the income tax expense by $13.89M recorded for the year.
54

8.
CASH AND CASH EQUIVALENTS

2011
2010
$000 $000
Short term deposits

Cash at bank and on hand
Bank overdraft
2,004
1,636
-
-
342
(618)
Total cash and cash equivalents
3,640
(276)
9.
RECEIVABLES AND PREPAYMENTS
Electricity debtors
Other debtors
Vat Receivable
Prepayments and deposits
32,014
7,573
620
2,893
27,370
3,642
-
1,847
43,100
32,859
- Electricity debtors
- Other debtors
Total receivables and prepayments (net)
The terms of trade for electricity debtors are 14 days from the date of billing.
Electricity debtors that are less than 3 months past due are not considered impaired. As at 31 December 2011,
electricity debtors of $24,868,896 (2010: $18,378,256) were not considered impaired.
(178)
(34)
(208)
(34)
42,888
32,617
As of 31 December 2011, the amount of electricity debtors impaired was $178,216 (2010: $208,169) net off deposits

held. The individual receivables are mainly customers, who have defaulted in payments. It was assessed that a portion

of the receivables are expected to be recovered.
Movements in the provision for impairment of electricity debtors and other debtors are as follows:

Balance as at 1 January
Amounts recovered during the year
242
(30)
337
(95)
Balance as at 31 December
212
242
The creation and releasing of provision for impaired receivables has been included in Other operating expenses in
the statement of comprehensive income (note 6). Amounts charged to the allowance account are generally written off,
when there is no expectation of recovering the debt.
The other classes within receivables and prepayments do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the fair value of each classes of receivables mentioned
above less electricity deposits. The Authority generally obtains security deposits in the form of bank guarantees
and cash deposits from all electricity customers which is estimated based on two months electricity consumptions.
The Authority carried out another review of the Consumer Security Deposit in 2011 in view of the tarrif increases
implemented in 2010 and 2011 respectively. The total carrying amount of cash security deposits in relation to the
above trade receivables carried by the Authority is $23,703,004 (2010: $17,809,000). The rest are secured through bank
guarantees maintained by the Authority.
10. INVENTORIES
Consumables - at cost
Goods in transit
17,638
434
15,999
143
Total inventories
18,072
16,142
55

11.
PROPERTY, PLANT AND EQUIPMENT

2010
$000
2011
$000
Freehold land
At cost
28,635
16,806
Leasehold land
At cost
13,488
13,370
Accumulated depreciation
(1,324)
(1,181)
156,354
160,938
276,996
239,529
Furniture and fittings

At cost
21,621
20,108
(12,615)
(11,611)
61,643
Plant, equipment and transmission assets

At cost
406,587
350,089
(129,591)
(110,560)
60,680
Dam, tunnels, water conductor

At cost
186,335
186,316
(29,981)
(25,378)
12,189
Buildings and improvements

At cost
74,754
74,745
(14,074)
(13,102)
12,164
9,006
8,497
Wind mill
At cost
34,394
35,349
(7,612)
(6,027)

26,782
29,322

Motor vehicles

At cost
16,006
15,295

(11,271)
(9,857)

4,735
5,438
Capital spares
At cost
4,571
3,775
Capital works in progress

- Nadarivatu Renewable Hydro Power Project
287,478
223,911
- Network Augmentation Project
-
25,801
- Rural and Urban Reticulation Project
3,306
10,021
- Turnkey Project
6,381
-
- Others
13,634
11,211
310,799
270,944
Total

- At cost
1,097,190
986,797

- Accumulated depreciation
(206,468)
(177,716)

Closing net book value
890,722
809,081
56
11. PROPERTY, PLANT AND EQUIPMENT (CONTD)
Reconciliation of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current financial year is set out as follows:
270,944
121,103
-
(36,658)
-
809,081
122,209
(10)
(29,655)

Dam,
Plant,

tunnels
equipment &
Capital

Freehold
Leasehold
Buildings & and water transmission
Furniture
Wind
Motor
Capital
work in

land
land improvements conductor
assets
& fittings
mill
vehicles
spares
progress
Total

$000
$000 $000
$000 $000 $000 $000 $000 $000 $000 $000

Balance as at 31
December 2009
16,780
12,331
58,504
150,271
243,727
7,433
31,116
6,400
3,476
186,499
716,537
Additions
-
-
-
-
-
-
-
-
1,106
Disposals
-
-
-
-
-
-
-
(10)
-
Transfers
26
-
4,094
15,209
14,483
2,105
-
1,369
(628)
Depreciation charge
-
(142)
(955)
(4,542)
(18,681)
(1,041)
(1,794)
(2,321)
(179)

Balance as at 31
December 2010
16,806
12,189
61,643
160,938
239,529
8,497
29,322
5,438
3,775
Additions
-
-
-
-
-
-
-
-
1,548
110,380
111,928
Disposals
-
-
-
-
-
-
-
(6)
(367)
-
(373)
Transfers
11,829
118
9
19
56,498
1,513
(748)
1,481
(194)
(70,525)
Depreciation charge
-
(143)
(972)
(4,603)
(19,031)
(1,004)
(1,792)
(2,178)
(191)
-
(29,914)

Balance as at 31
December 2011
28,635
12,164
60,680
156,354
276,996
9,006
26,782
4,735
4,571
310,799
890,722

uring the year, borrowing costs of $12,503,973 net of interest income of $631,810 were capitalised to the cost of the Nadarivatu Renewable Hydro Power Project and Network Augmentation Project.
D
Land title in respect of the Authoritys acquisition of land at Kinoya is almost complete. Subsequently, the title was legally transferred to the Authority in March 2012.
Agreement for the Monasavu lease has been prepared and lease titles will be formally executed and issued once the land survey is completed. It is envisaged that this will be finalised in 2012.

FEA made substantial progress in 2011 with the construction of the Nadarivatu Renewable Hydro Power Project. Total cost incurred during the year is $63.6m and this has been capitalised to the project.
The project is expected to be fully commissioned in 2012.

57

12.
FINANCIAL ASSETS
2011
2010

$000
$000

a) Available-for-sale financial assets

Equity accounted investments in joint venture
233

The process of the voluntarily liquidation of Sustainable Energy Limited continued in 2011 and is expected to be

completed in early 2012. The final meeting on the voluntary winding up was held on 26 January 2012 and

subsequently the liquidator has lodged the final document with the Registrar of Companies to officially dissolve the
Company.

b) Held-to-maturity financial assets
Short term deposits with banks
During the year, the Authority reinvested US$12.86 million as term deposits with ANZ bank at an interest rate of
1.05% per annum. This term deposit will be used to repay the balance of the Sinohydro Corporation offshore contract
in US dollars for the construction of Nadarivatu Renewable Hydro Power Project.
13.
INTANGIBLE ASSETS
a) Movie production
Gross carrying amount:
Additions
1,614
-
1,614
-
1,614
1,614
Accumulated impairment allowance:
Impairment allowance
1,614
-
1,614
-
1,614
1,614
Net book amount
Investment in movie production comprises of investment in Pirate Islands 2 movie project. The movie project
has been granted F1 Provisional Certificate by the Fiji Audio Visual Commission and thereby incentive by way of
150% tax deduction is available. The investment has been valued at cost and reduced by an impairment charge to
arrive at a carrying amount which is an amount the Authority expects to recover from the exploitation of the
copyright in accordance with the Production Investment Agreement.
b) Software License
23,409
55,837

Gross carrying amount:

6,160
5,690
Additions
284 470

6,444
6,160
Accumulated amortisation:
Amortisation for the year
3,658
524
4,182
3,130
528
3,658
Net book amount
2,262
2,502
Software license are made up of the Authoritys Financial Management Information System, Billing System and
other specialized Energy Monitoring Information System. The software license has been valued at cost and amortised
by an impairment charge over its remaining life to arrive at the carrying amounts.
58

14.
TRADE AND OTHER PAYABLES

2011
$000
2010
$000
Current
Trade creditors
16,411
29,675
Other creditors and accruals
20,475
13,090
VAT payable
-
852
Accrued interest
4,625
4,954
Customer security deposits
1,896
1,055
Total current trade and other payables
Non-Current
Other creditors and accruals
12,106
7,402
Customer security deposits
21,807
16,754
100% refundable deposits
15,766
15,891
Total non-current trade and other payables
The fair value of trade and other payables equals their carrying amount, as the impact of discounting is not significant.
The customer security deposits relates to the mandatory cash deposit which is equivalent to two months electricity
consumptions in accordance with the Electricity Act. This is refunded to the customer when the electricity account is
permanently closed. The 100% refundable deposits are the capital contribution from prospective customers or
developer for the supply of electricity in accordance with the General Extension Policy. The amount is refunded to the
customer over a period of 5 and 8 years respectively.
15.
PROVISION FOR EMPLOYEE ENTITLEMENTS
Bonus
Sick leave
Annual leave
Long service leave
Retirement benefits
1,130
-
969
1,049
3,436
820
71
819
1,317
3,353
Total provision for employee entitlements
6,584
6,380
Current
6,584
1,710
Non-current
Total provision for employee entitlements
6,584
6,380
Additional provisions recognised/(utilised) during the year (net)
6,380
204
7,039
(659)
Carrying Amount
6,584
6,380
43,407
49,679
49,626
40,047
4,670

The Government introduced the Essential National Industries Decree (ENID) which became effective from 7th

November 2011. FEA has been included as part of the ENID which requires the establishment of Bargaining Unit

(BU). From 7th November 2011, all collective agreement with Trade Unions has ceased. The ENID requires new

terms and conditions of employment to be negotiated with the BU. Subsequently, the FEA Board approved that all the
employee entitlements in the form of long service leave and retirement benefits be paid out to the employees. In this

regard, the long service leave and retirement benefits which previously used to be treated as a non current liability

have been reclassified as a current liability in the Statement of Financial Position. The total amount payable is

estimated to be around $4.5M.

Employee numbers

2011
2010
Number Number

Number of full-time equivalent employees as at 31st December
661

673
59

16.
INTEREST BEARING BORROWINGS

2011
$000
2010
$000
Current

Bonds (a)
Term loan - ANZ Bank (b)
Term loan - BSP ( c)
Term loan - Suva City Council (d)
Term loan - CDB (e)
22,000
-
4,000
41
10,620
17,000
54,589
-
39
-
Total current interest bearing borrowings
36,661
71,628
Non-Current
Bonds (a)
91,000
107,500
Term loans - ANZ Bank (b)
93,534
40,000
Term loan - BSP ( c)
16,000
-
Term loan - Suva City Council (d)
5,275
5,316
Term loan - CDB (e)
116,815
127,365
Total non-current interest bearing borrowings
322,624
280,181
Total interest bearing borrowings
359,285
351,809
(a) Bonds
The Reserve Bank of Fiji offers, manages and carries out registry services on behalf of the Authority. The Authoritys
bonds are issued in competitive tenders. The bonds are recorded at cost which reflects the face value of the bonds.
Bonds worth $17 million were repaid during the year and bonds worth $5.5 million were issued and received during
the year.
The maturing terms of the bonds range from 1 to 12 years, whilst the interest rates vary from 5.54% to 7.19% per
annum. The bonds are guaranteed by the Government of Fiji.
(b)Term loans - ANZ Bank
The interest rates for ANZ Bank term loans are at 6.5% per annum. The Authority successfully negotiated
the conversion of the foreign currency loan of USD$27.5M into a Fijian Dollar loan during the year.
The term loans from ANZ Bank are secured by the guarantee given by the Government of Fiji.
(c) Term loan - BSP

The term loan of $20 million from Bank of South Pacific (BSP) is subject to interest at the rate of 6.5% per annum and
is secured by a guarantee given by the Government of Fiji.
(d) Term loan - Suva City Council
The term loan from Suva City Council (SCC) is subject to interest at the rate of 3% per annum and is unsecured. The
loan is repayable over a period of 86 years in equal instalments of $200,000 on 25th July each year until July 2065.
(e) Term loan - China Development Bank (CDB)
The term loan from CDB is subject to interest rate of 7.15% per annum for 60 months from the date of agreement and
after 60 months the rate would be LIBOR rate plus a margin of 3.2% per annum. The loan is repayable over a period of
12 years in 24 equal semi-annual instalments. The first loan repayment will be paid on 20 March 2012 and the final
repayment is on 20 September 2023.
The term loan is secured by a guarantee given by the Ministry of Finance on behalf of the Government of Fiji.
60

2010
$000
17.
DEFERRED INCOME 2011

$000

EEC Grant In Aid

EEC Grant in Aid
Less: accumulated amortisation
12,330
(6,295)
12,330
(5,812)
Closing balance - 31 December
6,035
6,518
Government Grant For Rural Electrification
Government Grant for Rural Electrification

Less: accumulated amortisation
Closing balance - 31 December
Total deferred income (net)
The treatment of deferred income is in accordance with the policy set out in note 1(h) to the financial statements.
18.
CONTINGENT LIABILITIES
(a) Miscellaneous claims
No provision has been recorded in the accounts for unsecured contingent liabilities mainly in respect of sundry court
actions against the Authority. The Authority estimates such liability, if any, to be immaterial.
(b ) Contingent liabilities exist with respect to the following:
9,342
(4,671)
9,342
(4,297)
4,671
5,045
10,706
11,563
Letter of credit
Immigration bond
Litigation claims - others
2,292
31
791
192
31
514
3,114
737
19. COMMITMENTS

Estimated amounts of lease expenditure committed at balance date but not provided for in the financial statements:
a) Native and Crown leasehold land and other premises
Payable no later than one year;

Payable later than one year but not later than two years;
Payable later than two years but not later than five years.
Payable later than five years
1,340
1,171
3,478
91,501
Total commitments
97,490
FEA has entered into a Sale and Purchase Agreement with the iTaukei Trust Fund for the purchase of the Head Office
complex. The purchase is expected to be finalised in early 2012 and the payment of annual rental of $503,325 (VEP) to
the iTaukei Trust Fund will cease thereafter.
The Native and Crown leasehold land includes the recent lease obtained for Monasavu land. The settlement signed
with Monasavu land owners and the iTaukei Land Trust Board commits FEA to the following future payments:
1,705
1,624
4,837
96,256
104,422

Payable no later than one year;
620
620

Payable later than one year but not later than two years;
620
620

Payable later than two years but not later than five years;
1,860
1,860

Payable later than five years.
52,260
52,880

61

2011
$000
2010
$000
20.

CAPITAL EXPENDITURE COMMITMENTS

Capital expenditure contracted for at balance date but not otherwise

provided for in the financial statements.
54,557
79,882
Projects approved by the Board but not contracted for at balance date
The capital commitments include Nadarivatu Renewable Hydro Power Project, Wainisavulevu Weir Raising Project
and the conversion of the Diesel Generator sets to Heavy Fuel oil at Vuda Power station.
21.
EVENTS OCCURRING AFTER BALANCE DATE
a) The Government of Fiji announced major tax changes as part of its 2012 National Budget. This will be
implemented effective from 1st January 2012 and some of the proposed changes is expected to impact FEAs
tax position.
b) On 15th March 2012, the Authority and the iTaukei Trust Fund signed a Sale and Purchase Agreement for FEA to
aqcuired the Head Office complex at 2 Marlow Street, Suva from the iTaukei T
rust Fund at a cost of $6.5M VEP.
60,525
90,076

Apart from the above, no other matters or circumstances have arisen since the end of the financial year which

significantly affected or may significantly affect the operations of the Authority, the results of those operations, or the

state of affairs of the Authority in future financial years.

22.
SIGNIFICANT EVENTS DURING THE YEAR
a) The Government of Fiji approved an increase in Value Added Tax (VAT) from 12.5% to 15% which was
implemented from 1 January 2011.
b) On 1 April 2011 the final phase of the tariff increase approved by the The Fiji Commerce Commission and Cabinet
of an average 39.4 cents/unit was implemented by FEA.
c) On 7th November 2011, FEA implemented the Essential National Industries (Employment) Decree (ENID). The
decree requires the establishment of Bargaining Unit (BU) and the cessation of the collective agreements signed with
the three trade unions. New employment terms and conditions have to be negogiated between the BU and the
employer. As a result of i mplementing the ENID, the Long Service Leave and Retirement Benefits accrued up to 7
November 2011 will be paid out to the employees. The amount payable to the employees is outlined on Note 15.
23.
PRINCIPAL ACTIVITIES AND PRINCIPAL PLACE OF BUSINESS
The principal activities of the Authority are the generation, transmission, distribution and sale of electricity on Viti
Levu, Vanua Levu and Ovalau as governed by the Electricity Act and Regulations. The principal place of business for
the Fiji Electricity Authority is 2 Marlow Street, Suva or Private Mail Bag, Suva, Fiji Islands.
24.
RELATED PARTY TRANSACTIONS
a) The Authority is a statutory body constituted by an Act of Parliament and the transactions with the Government of
Fiji during the year are as follows:
Government guarantee fee expenses incurred during the year
The Government of Fiji also provides guarantees on the bonds issued by the Authority. As at balance date, the
Authority had borrowed funds amounting to $354 million under this guarantee.
On 12 October 2010, the Cabinet approved to increase the Government guarantee on FEAs borrowings by F$101
million, primarily to fund the Nadarivatu Renewable Hydro Power Project in 2011. Further the Government has
approved the extension of the above increase in government guarantee till 31st December 2012 to facilitate FEAs
capital expenditure programme.
418
900
62

24.
RELATED PARTY TRANSACTIONS (CONTD)
b) Directors
The names of persons who were directors of the Authority during the year 2011 are as follows:
Nizam-ud-Dean (Chairman)
Gardiner Henry Whiteside (Deputy Chairman)
John Low (Resigned November 2011)
Isikeli Voceduadua
Cama Tuiloma (Resigned August 2011)
Francis Kean (Appointed September 2011)
Hasmukh Patel (Ex-officio Member)

The directors fees paid during the year were $47,583.
(c) Key Management Compensation
The aggregate remuneration and compensation paid to the Key Management personnel, for the financial year ended
31 December 2011 and 2010 were:
2011
$000
2010
$000
1,052
137
265
1,055
145
337
Salary, bonus and allowances

Superannuation
Other benefits

Total
1,454
1,537

(d) During the year, the Authority has supplied electricity to the Government of Fiji, other Government owned entities,
directors and related entities and to executives at normal commercial rates, terms and conditions.
(e) Year-end balances arising from sales/purchases of services
Receivable from related parties: (Note 9)

Government of Fiji
2,153
1,055
(f) Transactions with Joint Venture before Acquisition
Operations & Maintenance fee charged

Asset licence fee charged
Project Manager fee charged
Interest income from loans
Loans repayments received during the year
Electricity purchased during year
52
15
7
126
10,356
737
63
STATISTICS 2011
TRANSMISSION & SUB-TRANSMISSION CENTRAL

DISTRICT
Wailoa - Cunningham
132kV O/H Line (km)
33kV O/H Line (km)
33kV U/G Cable (km)
2010
2011
2010
2010
62
62
2011
Cunningham - Kinoya A
Substations
2011
Transformer MVA
2010
2011
2010
2011
120
120
Cunningham - Kinoya B
54
54
Cunningham - Vatuwaqa
19
19
26.6
26.6
45.6
45.6
15
15
Cunningham - Hibiscus Park A
Cunningham - Hibiscus Park B
Vatuwaqa - Suva
Cunningham - Sawani
10
Kinoya - Vatuwaqa
Kinoya Nausori
10
18
12
6.25
6.25
6.25
6.25
Nausori Sawani
Hibiscus Park - Wailekutu
Hibiscus Park - Suva
Wailekutu - Deuba
38
38
Cunningham - Komo
Komo Hibiscus Park
TOTAL
62
62
66
66
41
54
30
11
292.7
322.7
DISTRIBUTION NETWORK CENTRAL

DISTRICT
OVERHEAD LINES (km)

High Voltage
UNDERGROUND CABLES (km)
High Voltage
Low Voltage
SUBSTATIONS
Low Voltage
INSTALLED KVA
2010
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
2011
Deuba
167.748
167.933
127.167
128.09
16.704
16.704
41.306
41.306
206
208
18916
19066
Lami
51.798
51.798
63.757
64.042
45.12
45.12
161
162
45630
45830
Suva
16.227
16.877
146.347
146.347
211.675
217.145
42.93
42.93
188
190
103482
103982
Kinoya
126.066
168.646
195.137
210.439
59.933
59.933
33.33
33.33
292
322
81135
82986
Nausori
237.938
247.861
303.82
318.341
17.055
18.935
1.523
1.523
425
454
42192
44044
Korovou
270.016
284.212
218.797
235.242
2.758
2.758
0.08
0.08
279
303
4856
5236
Levuka
49.063
49.063
39.008
39.008
1.18
1.18
49
50
5559
5564
Wailoa
11
11
12
12
206
206
TOTAL
929.856
997.39
1100.033
1147.509
354.425
361.775
123.169
123.169
1612
1701
301976
306914
Increase
% Increase
67.534
47.476
7.35
89
4938
7.3%
4.3%
2.1%
0%
5.5%
1.6%

DISTRIBUTION NETWORK - NORTHERN
OVERHEAD LINES (km)
High Voltage
DISTRICT
2010
High Voltage
Low Voltage
2011
2010
2011
2010
SUBSTATION
Low Voltage
2011
2010
2011
2010
INSTALLED kVA
2011
2010
2011
22,826
Labasa
395.01
398.957
718.625
720.316
12
12
383
389
22,548
Savusavu
109.15
109.595
83.18
83.725
7.038
111
113
6,265
6,581
TOTAL
504.16
508.552
801.805
804.041
19
19.038
494
502
28,813
29407
Increase
4.392
2.236
0.038
594
% Increase
0.9%
0.3%
0.2%
0%
1.6%
2.1%
Medium/Low Voltage
High Voltage
DISTRIBUTION NETWORK - WESTERN

OVERHEAD LINES (km)
DISTRICT
High Voltage
SUBSTATION
INSTALLED kVA
Medium/Low Voltage
2010
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
2011
Sigatoka
324.14
342.74
503.45
515.93
6.2
6.2
408
421
25407
25678
Nadi Tavua
1328.34
1334.621
1824.7
1834.759
162.8
162.85
72.71
73.139
1848
1873
152454
155079
Rakiraki
171.15
216.073
181.353
214.474
151
193
7323
8065
TOTAL
1823.63
1893.434
2509.503
2565.163
173
173.05
82.71
83.139
2407
2487
185184
188822
Increase
% Increase
69.804
55.66
0.05
0.429
80
3638
3.8%
2.2%
0%
0.6%
3.3%
2%
64
STATISTICS 2011
TRANSMISSION & SUB-TRANSMISSION WESTERN

DISTRICT
132kV O/H Line (km)

2010
2011
33kV O/H Line (km)

2010
2011
33kV U/G Cable (km)

2010
Substations
2011
2011
2010
2011
110.5
110.5
Wailoa
Wailoa - Vuda
78
78
Vuda - Pineapple Corner A
Vuda - Rarawai
32
32
Rarawai - Vatukoula
19
19
Vatukoula - Tavua
Vuda - Waqadra A
16
16
Vuda - Waqadra B
11
11
Waqadra - Sigatoka
59
59
Qeleloa
98
98
30
30
12.5
12.5
10
10
6.25
6.25
40
40
29
29
Vuda - Rarawai Tee-off to Pineapple

Corner
Wailoa - Wainikasou
29
29
Nagado - Sabeto
10
10
Nocolevu-Korolevu
1
78
219
219
15
6.25
6.25
10
10
10
12
15
16
Maro-Natadola
78
Maro
TOTAL
2
1
Sigatoka - Nocolevu
Transformer MVA
2010
335.5
363.5
GENERATION STATISTICS ( EXCLUDING INDEPENDENT POWER PRODUCERS)

Years
Units Generated Wailoa Hydro Mwh
Units Generated Wainiqeu Hydro Mwh
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
448,253
343,655
357,279
322,489
315,569
481,098
462,986
436,081
382,963
424,818
1,945
74
1,159
1,099
1,329
1,387
688
63
898
1,968
8,919
15,151
18,272
21,079
18,420
16,058
19,238
19,404
6,085
4,922
12,996
7,990
10,520
10,279
Units Generated Wainikasou Hydro Mwh

Units Generated Nagado Hydro Mwh
Total Generated Hydro MWh
450,198
343,729
367,357
338,739
341,255
508,486
495,090
460,192
413,619
456,469
Units Generated in VLIS Diesels MWh
117,763
244,848
241,084
304,863
354,174
183,329
162,760
153,990
236,356
211,767
Units Generated Diesel Others MWh
35,738
39,772
41,110
41,169
40,189
44,453
Units Generated HFO Kinoya

Total Generated Thermal MWh
153,501
284,621
282,195
346,033
394,364
Unit Generated from Butoni Wind Farm

Units Generated from Solar panel Mwh
Total Generated Wind & Solar MWh
Total FEA Generation (MWh)
41,740
46,178
43,670
52,537
30,920
60,807
112,264
126,237
83,540
255,989
269,745
309,924
415,130
339,760
3,351
4,604
7,211
6,420
4,977
9.52
6.20
1.53
0.74
0.21
10
3351
4604
7211
6420
4,977
603,709
628,359
649,558
684,773
735,622
767,827
769,439
777,327
835,169
801,206
Made up of
Total VLIS Generation ( MWh)
566,016
588,503
607,288
642,545
694,104
724,700
722,573
733,593
781,734
754,785
Total Other Generation (MWh)
37,683
39,846
42,263
42,268
41,518
43,128
46,866
43,734
53,435
46,421
Station Auxilliary usage MWh
4,815
6,777
6,144
7,294
6,375
7,865
9,139
9,050
9,268
8,952
Auxilliaries as % of Generation
0.80%
1.08%
0.95%
1.07%
0.87%
1.02%
1.19%
1.16%
1.11%
1.12%
% contribution from Hydro
74.57%
54.70%
56.55%
49.47%
46.39%
65.97%
64.52%
59.20%
49.53%
56.97%
% contribution from Thermal
25.43%
45.30%
43.44%
50.53%
53.61%
33.60%
34.88%
39.87%
49.71%
42.41%
% contribution from Wind & Solar
0.00%
0.00%
0.00%
0.00%
0.00%
0.43%
0.60%
0.93%
0.77%
0.62%
% increase / (decrease) in Hydro Generation
-3%
-24%
7%
-8%
1%
49%
-3%
-7%
-10%
10%
% increase / (decrease) in Thermal VLIS Generation
69%
108%
-2%
26%
16%
-39%
-42%
20%
53%
-10%
% increase / (decrease) in Total Thermal Generation
44%
85%
-1%
23%
14%
-34%
3%
16%
34%
-18%
-4%
% increase / (decrease) in Total Generation
6%
4%
3%
5%
7%
5%
0%
1%
7%
Maximum Dam Level ( AMSL)
736
733
737
735
735
746
746
742
739
743
Minimum Dam level (AMSL)
718
714
719
721
721
728
728
723
727
735

Annual Report 2011

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FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

LETTER TO THE MINISTER

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

The Honourable Prime Minister, Commodore Josaia Voreqe Bainimarama, at the

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

KEY OUTCOMES FOR 2011

FEA recorded a profit after tax of $51.9M in 2011, which

is expected to be fully commisioned by the end of May

The profitability enabled FEA to carry out Capex works

FEA completed the design of the double circuit new

FEA successfully negotiated the conversion of the

The following major zone sub-stations which will cater for

FEAs gearing ratio at the end of December 2011 was

Kinoya Zone Substation in Suva

Qeleloa Zone Substation in Nadi

Komo Park Zone Substation in Suva and

The shareholder value of FEA increased from $419.9M as

Nausori Zone Substation

As a result of stringent cost control measures implemented

FEA completed the peer review of the design of the

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

Downstream Hydro Project was carried out and a

Vanua Levu and some dark spots in Viti Levu. This RT

Lost Time Injury

Conducted a review of the Organization Structure of FEA

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

MEMBERS OF THE AUTHORITY

Francis Bulewa Kean

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

EXECUTIVE MANAGEMENT TEAM

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

Construction of the Nadarivatu Hydro Power Project progressed positively in 2011

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

The Fiji Electricity Authority was

The Authority has adopted a system of

The Board comprises of the Chairman,

The Board of Directors are vested with

The Members of the Board shall at all

Member - Resigned in November 2011

Member - Resigned in August 2011

Member - Appointed in September 2011

CEO & Ex-Officio Member

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

Audit & Finance Sub-Committee

Policy Based Corporate Governance

The following sub-committees of the

The key role of the sub-committee is to

The Authority has also adopted a policy

Major Projects Sub-Committee

The sub-committee met 9 times during

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

FIJI ELECTRICIT Y AUTHORIT Y | ANNUAL REPORT 2011

FEA made a financial profit of $51.9

The profitability of FEA for the period

2005 2006 2007

2008 2009 2010 2011

FEA recorded an all time high fuel cost

the tarrif increase to achieve an average

the Government continues to support

2006 2007 2008

Before adjusting for NCO

2009 2010 2011

After adjusting for NCO