Sam Pam

Project Administration Memorandum
Project Number: 38183

Loan Numbers: 2368/8232
Grant Numbers: 0087/0101
October 2007
SAM: Power Sector Expansion Project
The project administration memorandum is an active document, progressively updated and revised as
necessary, particularly following any changes in project or program costs, scope, or implementation
arrangements. This document, however, may not reflect the latest project or program changes.
PROJECT ADMINISTRATION MEMORANDUM
Power sector expansion project

L2368/G0087-SAM (ADB)
G0101-GOA
L8232-JBIC
Asian Development bank

Pacific Department
(July 2009)
TABLE OF CONTENTS
1. Contents
2. Project Summary
3. Project Description
4. Design and Monitoring Framework
5. Cost Estimates and Financing Plan
6. Implementation Arrangements and Schedule
7. Consultants
8. Procurement
9. Disbursement
10. Project Performance Monitoring and Evaluation
11. Progress Reports
12. Audit Requirement
13. Detailed Status of Compliance with Covenants
14. Anti-Corruption Guidelines
15. Design Changes
16. Implementation of the Associated TA Project
17. Key Persons Involved in the Project
1
2. PROJECT SUMMARY
A. Introduction
1. The Project Administration Memorandum (PAM) is a guide to the management,

implementation, and monitoring of the Power Sector Expansion Project [Loan No. 2368-
SAM(SF); G087-SAM (ADF Grant); G101-SAM (Government of Australia); and Loan 8232
(JBIC Loan)]. The PAM contains project data and information that allows the Borrower,
executing agency (EA), implementing agency (IA), and ADB to monitor project implementation
and evaluate project impact.
2. In particular, the PAM outlines the implementation arrangements for the Project and
contains the basic requirements and procedures on recruitment of consultants, procurement of
goods, contracting of civil works, withdrawal of loan funds, disbursements, progress reporting,
performance monitoring and auditing requirements under the Project.
3. The contents and interpretation of the PAM were discussed with the EA, IAs and the
PMU during loan inception, and are subject to the provisions of the Report and
Recommendation of the President (RRP), Financing and Project Agreements , Co-Financing
Agreement and JBIC Loan Agreement . In case of conflict among the documents in meaning or
intent, the specific provisions of the Loan and Project Agreements shall prevail.
B. Processing History
 Approval of Project Preparatory Technical Assistance 25 May 2006

(TA No. 4791- Power Sector Expansion Program)
 Fact-Finding Mission 23 April-
11 May 2007
 Management Review Meeting 19 June 2007
 Appraisal Mission 25 June-
5 July 2007
 Staff Review Committee Meeting 27 August 2007
 Loan Negotiations 9 October 2007
 Board Circulation 31 October 2007
 Board Consideration and Approval 21 November 2007
 JBIC Loan Agreement (JBIC/GoS) Signing 10 December 2007
 Financing Agreement (ADB/GoS) Signing 11 December 2007
 Project Agreement (ADB/EPC) Signing 11 December 2007
 Co-Financing (GoS/ADB) Signing 18 December 2007
 JBIC Loan Effectiveness 14 May 2008
 ADB Loan/Grant Effectiveness (3rd extn deadline) 16 June 2008
 Subsidiary Financing Agreement (GoS/EPC) 06 June 2008
 Inception Mission 24 June-05July 2008
 Project Completion Date 30 June 2016
 Loan and Grant Closing Date 31 December 2016
2Project Summary
2
C. Amount and Terms of the Loans and Grants
 ADF Loan Amount SDR 17,151,000 1

 ADF Grant Amount US$ 15,390,000
 JBIC Loan Amount US$ 38,000,000
 Government of Australia US$ 8,000,000
 ADF Loan Terms 32 years

 Interest Charge 1% (grace period)
1.5% (remaining
period)
 Grace Period 8 years
 First Payment Due 15 May 2016
 Last Payment Due 15 November 2039
 JBIC Loan Terms 30 years

 Interest Charge 0.45%
 Grace Period 10 years
D. Loan and Project Summary
Borrower Independent State of Samoa
Classification Targeting classification: General intervention

Sector: Energy
Subsector: Energy sector development
Themes: Sustainable economic growth, capacity development
Subthemes: Fostering physical infrastructure development,
promoting economic efficiency and enabling markets, institutional
development
Environment The two core subprojects are classified category B and C. An

Assessment initial environmental examination was completed for the category
B project. An environmental assessment review framework was
completed to guide candidate subprojects. No category A
subprojects will be financed.
Project Description The Power Sector Expansion Project comprises (i) support to the
Electric Power Corporation’s (EPC) investment plan 2008–2015
through three investment components and a project management
component, and (ii) a technical assistance (TA) cluster for
Implementing the Samoa National Energy Policy.
Rationale Reliable power supply is essential for enhancing the quality of life
of all Samoans. Good performance of the power sector and
reliable electricity services are vital for promoting private sector
1
Approximately US$26,610,000 equivalent.
2Project Summary
3
investments to diversify the economy and achieve sustainable

economic growth. The performance of the power sector is
increasingly becoming a hindrance to economic growth. High
system losses and voltage drops have resulted in poor reliability
and quality of electricity supply. As a consequence, consumers
are resorting to more expensive self-generation.
With peak demand growing at about 3% annually in the medium

term, EPC’s challenge is to improve its operational efficiency and
financial performance while ensuring sufficient generation and
transmission capacity is available to provide a reliable and high
quality electricity supply.
EPC’s investment plan 2008–2015 is driven by (i) the need to

improve EPC’s collection performance, (ii) the need to remove
transmission bottlenecks to improve reliability and quality of
supply, and (iii) capacity requirements to meet growing peak
demands. In the longer term, the objective is to reduce Samoa’s
reliance on imported fuels by promoting clean, indigenous, and
renewable energy resources.
Although Samoa’s debt situation has significantly improved, the

economy remains import-dependent and vulnerable to climatic
and global price shocks. The Asian Development Fund (ADF)
grant to the Government will ease the macroeconomic impact of
the large financing requirements in the power sector.
Impact and Outcome The Project forms part of the Government’s power sector
development plan to improve the capacity of the sector to provide
sustainable and reliable electricity services to all consumers at
affordable prices. To achieve this objective, the Project will help
EPC to improve the quality, reliability, and cost-effectiveness of
power supply by (i) supporting EPC’s investment plan to meet
growing demand, (ii) improving the operational efficiency of EPC,
(iii) improving the financial performance of EPC, (iv) establishing
effective regulation of the power sector, (v) developing a demand-
side management strategy to promote energy efficiency and
conservation, and (vi) developing clean energy resources through
the establishment of a clean energy fund (CEF), a clean
development mechanism (CDM) subfund, and a designated
national authority (DNA).
Project Investment Plan The project investment cost is estimated at $100 million, including
taxes and duties of $2.23 million.
2Project Summary
4
Financing Plan
Total
Source ($ million) %
Asian Development Bank ADF Loan 26.61 26.61
Asian Development Bank ADF Grant 15.39 15.39
Japan Bank for International Cooperation 38.00 38.00
Government of Australia 8.00 8.00
Electric Power Corporation 12.00 12.00
Total 100.00 100.00
ADF = Asian Development Fund.
Source: Asian Development Bank (ADB) estimates.
An ADF loan of $26.61 million and an ADF grant of $15.39 million

to the Independent State of Samoa will help finance the Project.
The ADF loan will have a 32-year term, including a grace period
of 8 years, and interest rate of 1% during the grace period and
1.5% thereafter, and such other terms and conditions set forth in
the financing and project agreements. The ADF grant to the
Government will ease the macroeconomic impact of the large
financing requirements in the power sector.
The Japan Bank for International Cooperation (JBIC) will provide

cofinancing of $38 million equivalent in Japanese yen, to be
administered by the Asian Development Bank (ADB), for the
Project. The loan is expected to have a 30-year term, including a
grace period of 10 years, at an interest rate of 0.45%.
The Government of Australia will provide grant cofinancing of $8

million. The grant is to be administered by ADB and is to be
provided as Government of Samoa equity to EPC for counterpart
financing of the Project, with terms and conditions set forth in the
financing and subsidiary financing agreements.
Allocation and Relending The ADF loan, the ADF grant, and the JBIC loan will be relent by
Terms the Government to EPC. The relending will be based on such
terms and conditions as set forth in the subsidiary financing
agreement between the Government and EPC. Such terms and
conditions will include the relending to be released in two
tranches, an interest rate of 6.5%, and such conditions set forth in
the financing agreement. The first tranche, which will finance
subprojects completed by 30 June 2012, will have a 25-year term,
including a grace of period of 5 years. The second tranche, which
will finance the remaining subprojects, will have a 25-year term,
including a grace period of 8 years.
The Government will utilize the ADF grant by converting a portion

of the EPC loan principal to grants conditional on timely and
within-budget implementation of subprojects. The interest
payment from EPC to the Government on the ADF grant will
2Project Summary
5
provide ongoing financing for a CEF and a CDM subfund to be

established under the CEF.
Period of Utilization 31 December 2016
Estimated Project 30 June 2016

Completion Date
Implementation EPC will be the implementing agency. A project steering

Arrangements committee (PSC) will be established for interministerial
coordination and to provide overall project direction. A project
management committee (PMC) will be formed within EPC to
provide coordination between project and non-project activities.
EPC will establish a project management unit (PMU), to be led by
an externally recruited project manager, for day-to-day
management and implementation of the Project. Implementation
consultants will be recruited to support the PMU.
The Project will be implemented over a period of 8 years. Bid

documents for core subprojects are under preparation such that
contracts can be awarded prior to loan effectiveness. Construction
activities are expected to commence in the first quarter of 2008.
The eligibility criteria, project preparation requirements, and

approval process for candidate subprojects have been
established.
Executing Agency The Ministry of Finance
Procurement Procurement under the Project, including for ADB, JBIC,

Government of Australia, and EPC financing, will follow ADB’s
Procurement Guidelines (2007, as amended from time to time).
ADB’s standard bid documents will be used for procuring ADB,

JBIC, and Government of Australia financed goods and services.
Requirement of environmental monitoring and management plans
will be reflected in all civil works bid and contract documents. A
procurement plan and tentative contract packages have been
prepared. International competitive bidding procedures will apply
to major contracts for all subprojects. Shopping procedure will
apply to contract packages of less than $100,000.
Consulting Services Consulting services will be required for a project manager and
project implementation. Consultants will be selected and engaged
in accordance with ADB’s Guidelines on the Use of Consultants
(2007, as amended from time to time).
A consultant firm has been engaged to provide international

consulting services over the project implementation period. The
2Project Summary
6
firm was recruited using quality-and cost-based selection

procedures. Individual consultants may be recruited for specific
assignments in accordance with ADB procedures.
Project Benefits and Inadequate and unreliable power supply is becoming an

Beneficiaries increasing hindrance to economic growth and is affecting all
consumers in Samoa. The Project will help improve the quality
and reliability of electricity services, meet growing demand, and
reduce EPC’s (and ultimately consumers’) exposure to fluctuating
international fuel prices. Improvements in EPC’s financial and
operational performance will enhance cost-effectiveness of power
supply and, once the benefits of the expansion program are
realized, reduce requirements for tariff increases.
Regulatory reform and the establishment of a regulatory agency

will help balance the interests of all sector stakeholders and
promote cost-effective private sector participation and
transparency in the power sector.
Risks and Assumptions EPC’s investment plan and financing arrangements have been
prepared considering the impact on Samoa’s debt and EPC’s
ability to service its debt to the Government. The ADF grant will
ease the macroeconomic impact of the large financing
requirements in the power sector. The Government of Australia
will provide a grant to be provided as Government of Samoa
equity to EPC. This equity will enable EPC to meet its counterpart
financing requirements for the Project.
Political commitment to implementing power sector reforms is

needed for improving the performance of the sector, to ensure
that EPC can repay its debt to the Government, and to ensure
that investments translate into benefits for electricity consumers.
The TA cluster for Implementing the Samoa Energy Policy will
assist the Government in (i) the consultation process, (ii) drafting
and amending legislation, and (iii) establishing the regulatory
agency. Assurances under the Project reflect the key milestones
for regulatory reform.
The selection and sequencing of subprojects under the

investment plan has been prepared in consideration of EPC’s
financial and implementation capacity. To ensure affordability of
the investment plan to EPC, timely adjustments to tariffs need to
be made in response to changes in EPC’s costs. Until a formal
tariff mechanism can be established within the context of the
regulatory framework, the Government has introduced a fuel
surcharge that allows EPC to pass on fluctuating fuel costs. To
address EPC’s poor collection performance, arrears by
government ministries and state-owned entities have been
cleared and prepayment metering is being installed for EPC’s
2Project Summary
7
consumers. In the case of certain basic social services where

suspending electricity services may not be possible, budgetary
allocations will be paid directly to EPC for electricity consumption.
The assurances under the Project include the provision that 75%
of all consumers will have prepayment meters by the end of 2012.
E. Relending Terms
4. The ADF loan, the ADF grant, and the JBIC loan will be relent by the Government to
EPC. The relending will be based on such terms and conditions as set forth in the subsidiary
financing agreement between the Government and EPC. Such terms and conditions will
include the relending to be released in two tranches, an interest rate of 6.5%, and such
conditions set forth in the financing agreement. The first tranche, which will finance subprojects
completed by 30 June 2012, will have a 25-year term, including a grace of period of 5 years.
The second tranche, which will finance the remaining subprojects, will have a 25-year term,
including a grace period of 8 years.
5. The Government will utilize the ADF grant by converting a portion of the EPC loan
principal to grants conditional on timely and within-budget implementation of subprojects. The
interest payment from EPC to the Government on the ADF grant will provide ongoing financing
for a CEF and a CDM subfund to be established under the CEF.
2Project Summary
8
3. PROJECT DESCRIPTION
A. Project Objectives
1. The objective of the Project is to provide sustainable and reliable electricity services to
consumers at affordable prices by improving the capacity of the power sector to: (a) meet
growing electricity demands; and (b) improve the quality, reliability and cost effectiveness of
electricity supply. The Project is part of the Beneficiary’s power sector development program,
which also includes taking institutional and regulatory measures to improve the financial and
operational performance of the EPC and the overall performance of the sector.
B. Project Components
2. The Project consists of the following components:
Component A: Upgrading the Hospital Feeder
Upgrade the hospital feeder through:
(i) constructing an approximately 900 meters 22 kV underground cable to replace

the existing 6.6kV overhead feeder section from Togafuafua to Saleufi;
(ii) installing a new 6.6kV/22kV transformer at the Tanugamanono power station

for the 22kV underground cables; and
(iii) installing nine new 6.6kV/22kV distribution transformers to replace the existing
6.6kV/400V distribution transformers at Tanugamanono power station.
Component B: Installing Pre-Payment Meters
Supply and install approximately 21,000 single-phase pre-payment meters and

approximately 250 three-phase pre-payment meters on Savai’i and Upolu.
Component C: Implementing Candidate Subprojects
Support the EPC’s investment plan for improving power generation and
transmission on Savai’i and Upolu through the implementation of approximately
17 Subprojects, including 11 transmission Subprojects, 4 generation Subprojects,
a system control and data acquisition Subproject, and a voltage and current, and
stream flow gauging measurement equipment Subproject.
Component D: Supporting Project Management
Support the EPC’s management of the Project through:
(i) the establishment of the PMU; and
(ii) the appointment of a project manager and implementation consultants in the PMU.
3Project Description
9
C. Special Features
3. Donor Coordination. Donor coordination and consultations with AusAID, GEF, and
JBIC have been key features of project preparation. Because of the emphasis on regulatory
and governance aspects of the power sector in Samoa, the Government of Australia will help
finance the regulatory and policy reform component of the TA cluster for Implementing the
Samoa National Energy Policy. Development of the feasible and affordable investment plan
and policy dialogue has been undertaken with EPC and the Government jointly with AusAID
and JBIC. JBIC will provide joint cofinancing as the first project under the Accelerated
Cofinancing Scheme with ADB. 1 The Government of Australia will provide a grant as joint
cofinancing for the Project to address affordability of counterpart financing requirements,
which is a particular issue for EPC in the early years of the investment plan. Initial
consultations have been undertaken with GEF on the CEF. The consultations will continue as
part of the implementation of the establishment of the CEF, the CDM subfund, and the DNA.
4. Climate Change Adaptation. The Project supports the objectives of the

Government’s National Adaptation Program of Action (2005) through the underground
transmission network cabling program. The program will help to reduce exposure of
transmission assets to cyclones and reduce the impacts to EPC and consumers of cyclone
damage to the transmission network.
5. Power Sector Reform. Investments in the power sector will be accompanied by

institutional and regulatory reform to improve the financial and operational performance of
EPC, and the overall performance of the power sector. Assistance to undertaking the reform
process is provided through the TA cluster for Implementing the Samoa National Energy
Policy and is supported by assurances under the financing agreement between ADB and the
Government.
6. Macroeconomic Sustainability. The provision of the ADF grant will ease the
macroeconomic impact of the large financing requirements for the power sector expansion
project. In addition, the Government of Australia will provide $8 million to the Government for
counterpart financing of the Project. 2
7. Financing Arrangements. The sector loan modality will help EPC to improve longer-
term investment planning through the provision of predictable financing. The sector loan
modality will also help mitigate the risk of further delays associated with supplementary loan
processing in the event of cost overruns. The Government utilization of a portion of the ADF
grant as an incentive scheme to EPC will help improve timely implementation of subprojects.
The Government will also utilize the interest rate payment from EPC on the grant to provide
ongoing financing of a CEF and a CDM subfund.
8. Pilot Financing Approach to Reforms in Developing Countries. The Government

of Australia will provide a grant of A$4 million to the Government of Samoa to buy down a
portion of the ADF loan. The loan buy down mechanism will be triggered by the Government
achieving specific reform measures by 31 December 2012, including (i) the establishment of
an independent technical and price regulator for the power sector, (ii) EPC’s collection
performance improving such that accounts receivable do not exceed 2 months of electricity
1
The joint cofinancing framework agreement for the Accelerated Cofinancing Scheme with ADB was signed on 26
September 2007.
2
The $8 million will be disbursed over the 8-year investment plan and constitute the Government of Samoa’s
equity in EPC.
10
sales for a minimum of 2 years, and (iii) 75% of all EPC’s active electricity customers are
using prepayment meters. The use of this pilot mechanism constitutes an innovative approach
to promoting reforms in developing countries, especially in the Pacific region. This is the first
time that ADB is engaging in such a loan buy down mechanism.
4. DESIGN AND MONITORING FRAMEWORK
Design Summary Performance Data Sources/Reporting Assumptions and Risks

Targets/Indicators Mechanisms
Impact Assumptions
Access to sustainable and reliable Consumer satisfaction Annual reports on  Cost of power supply is reflected in timely
electricity services at affordable prices ratings of EPC’s services consumer satisfactions electricity tariff adjustments
 Timely payment of arrears and electricity bills
Complaints to EPC’s Number of complaints by Government entities
consumer service division over 1 year
Outcome Assumptions
Improved quality, reliability, and cost- System average duration EPC’s quarterly progress  Effective regulation of the power sector is
effectiveness of power supply interruption index reports and annual established
baseline established and financial report  Effective monitoring and reporting of EPC’s
verified by 4th quarter costs
2008 and reduced by ADB mission’s back-to-  Stakeholders support EPC’s activities
20% by 2015 office reports  EPC implements independent consumer
satisfaction surveys
Average interruption Indicators published in  Clean energy resources are cost effective
frequency index baseline EPC’s annual corporate  Financing for clean energy project is
established and verified plans and financial available
by 4th quarter 2008 and reports by FY2009 and  Implementation of demand-side and energy
reduced by 20% by 2015 onward conservation measures
Cost of generation EPC’s corporate plan
established and published
by 1st quarter 2009
Outputs Assumptions
1. EPC’s investment plan meets demand Power system capacity EPC’s annual corporate  Counterpart financing is made available on
requirements for energy and power plans and financial time
meets demand reports  Effective project management unit
requirements on Savai’i  Timely recruitment of implementation
and Upolu Project progress and consultants
completion reports  Timely completion of bid documents and
procurement of goods and services
ADB review missions and  Implementation of effective stakeholder
field visits consultations
 Effective and timely implementation of social
and environment requirements
 Land acquisition is completed prior to
commencement of construction activities
 Effective demand-side management
11
measures
4ProjectFramework
12
2. Operational efficiency of EPC Baselines for technical EPC’s corporate plan  SCADA system installed and operating
improves system losses are  Transmission and generation investments
established and verified Project completion reports implemented on a timely basis
by 4th quarter 2008 and
are reduced by 10% by ADB review missions and
4th quarter 2010 and 20% field visits
by 4th quarter 2012
ADB reviews and
Baseline for nontechnical approvals of bid
system losses established documents
and verified by 4th quarter
2008 and reduced by EPC annual performance
10% by 2010. and monitoring reports to
the board of directors and
Ministry of Finance
3. The financial performance of EPC Consistent application of Number of consumers in  Effective implementation of prepayment
improves disconnection policy arrears by more than 30 system and cut-off policy
days and number of those  Stable or lower international fuel prices
consumers disconnected  Tariffs are adequate to cover all operating
expenses, depreciation, taxes, and interest
Amount of accounts expense
receivables aged more  Introduced safeguards for fuel management
than 60 and 90 days are are effective
written off  Effective financial advisory services to EPC
 Consumer’s acceptance of prepayment
Fuel audits conducted on EPC’s monthly fuel audits meters
all EPC’s diesel power  Government commitment to either utilize
stations prepayment meters or to sufficient budgetary
allocations for electricity consumption by
Timeliness of tariff Government entities
adjustments in response
 Political commitment to timely tariff
to costs
adjustments
EPC’s collection EPC’s audited annual
performance improves financial compliance
such that accounts reports to ADB
receivables are below 2
months of sales
Government consumers’
share of EPC’s accounts
receivables reduced from
4ProjectFramework
55% in 2007 to less than
their share of total sales
by 31 December 2009
Share of electricity
consumers on
prepayment metering
increases from 5% in
2007 to 75% by 31
December 2012
Self-financing ratio is
minimum 12% for 2008–
2015; self-financing ratio
is minimum 20%
commencing 2016
Debt-service ratio is
minimum 1.3
4. Effective regulation of the power Electricity Act to govern Parliament consideration  Wide political commitment to power sector
sector is established the power sector of the draft Electricity Act reforms
established by 31
December 2009
Amendments of the EPC Parliament consideration

Act consistent with the of amendments to the
Electricity Act by 31 EPC Act
December 2009
Regulatory agency Government

established by 31 communication with ADB
December 2010
5. Energy demand-side management Energy conservation and Consultant’s reports  Effective stakeholder consultations and public
demand-side awareness campaign
management public ADB review missions
awareness campaign
implemented
6. Development of clean energy Number of projects by Annual reports of the  Effective promotion of clean energy
13
energy subsector clean energy fund  Effective stakeholder consultations and
financed by the clean participation
4ProjectFramework
14
energy fund Annual reports of the
designated national
Number of projects by authority
energy subsector eligible
for clean development
mechanism
Electricity produced by
clean energy resources
(baseline of 45 GWh in
2006)
Activities with Milestones Inputs

1. The financial performance of EPC improves (2007 onwards)  Project:
1.1. Uniform application of disconnection and write-off policies approved, disseminated, and  ADF loan financing: $26.61 million
implemented from October 2007  ADF grant financing: $15.39 million
1.2. Prepayment meter policy implemented from December 2008  JBIC financing: $38 million
1.3. Resident financial management advisors recruited by March 2008; intermittent  Government of Australia grant financing:
implementation period to January 2010 $8 million
 Government of Samoa/EPC counterpart
2. EPC’s investment plan meets demand requirements, and operational performance of financing: $12 million
EPC improves (2007 onwards)  Implementation consultants: $2.86
2.1. Project implementation preparation million
2.1.1. Establishment of the project management unit and recruitment of the project manager
 Project manager (36 person-months):
prior to loan effectiveness (advance activity)
$0.75 million
2.1.2. Recruitment of implementation consultants (advance activity)
 Technical Assistance Cluster:
2.1.3. Bid documents issued for core subprojects (advance activity)
2.1.4. Contracts issued and contractors fielded for core subproject by 31 March 2008  ADB TA financing (JSF): $0.6 million
 Government of Finland: $0.35 million
2. 2. Implementation of core subprojects (2008–2015)  Government of Australia: $0.9 million
2.2.1 Construction of the Hospital Feeder upgrading project – stage 1 commences 1st  Government of Samoa/EPC: $0.335
quarter, 2008; commissioning in 4th quarter, 2008 million
2.2.2 Supply and installation of prepayment meters commences 1st quarter, 2008;  Consultants (42.5 person-months):
sequential commissioning from 3rd quarter, 2008 $1.143 million
2.3. Implementation of candidate subprojects (2008–2015)

2.3.1. Identification of subprojects and preparation of feasibility reports
2.3.2. Preparation of bid documents
2.3.3. Contracts issued and contractors fielded for detailed design and or construction of
subprojects
2.3.4. Contracts issued for the supply of equipment and materials
4ProjectFramework
Activities with Milestones Inputs
2.4. Reporting (2008–2015)
2.4.1. EPC prepares and submits quarterly progress reports, updates of the investment plan,
and financial projections to ADB and Government
3. Establishment of effective regulation of the power sector (2008–2010)

3.1. Regulatory advisor and legal experts recruited and fielded by March 2008
3.2. Phase 1: Scoping for a regulatory framework: cabinet decision on the principles of
power sector regulation by August 2008
3.3. Phase 2: Development of the regulatory framework and drafting of legislation: cabinet
and parliamentary consideration by December 2009
3.4. Phase 3: Implementation of the regulatory framework: establishment of the regulatory
agency and appointment of regulator by 2010
4. Energy demand-side management (March–August 2008)

4.1. Energy demand-side advisor recruited and fielded by March 2008
4.2. Development of an energy demand-side management strategy
4.3. Stakeholder consultations and public awareness campaign
5. Promotion and Development of clean energy resources (March 2008–February 2009)

5.1. Recruitment and fielding of consultants for the clean energy fund and clean
development mechanism subfund, and for the designated national authority by March
2008
5.2. Establishment of the governance and operational structure and working guidelines for
the clean energy fund, clean development mechanism subfund, and the designated
national authority
5.3. Identification of project pipeline for the clean energy fund
5.4. Public awareness campaign
5.5. Capacity building and training
5.6. Public awareness campaign
ADB = Asian Development Bank, ADF = Asian Development Fund, EPC = Electric Power Corporation, FY = fiscal year, GWh = gigawatt-hour, JBIC = Japan Bank
for International Cooperation, JSF = Japan Special Fund, SCADA = system control and data acquisition, TA = technical assistance.
15
4ProjectFramework
16
5. COST ESTIMATES AND FINANCING PLAN
A. Project Investment Plan
1. The project investment cost is estimated at $100 million, including taxes and duties of
$2.23 million. The Project comprises two core investment subprojects, 17 candidate investment
subprojects under EPC’s investment plan, and a project management component which will be
implemented during the 2008–2015 investment period. The core subprojects comprise the
Hospital Feeder upgrading project – stage 1, through the construction of a 22 kV underground
cable from Togafuafua to Saleufi, and the supply and installation of single-and-three-phase
prepayment meters. The project management component comprises recruitment of a project
manager and implementation consultants, initially for a period of 3 years. The cost estimates are
summarized in Table 1 and detailed in Tables A6.1 and A6.2 at the end of this Section.
Table 1: Project Investment Plan

($ million)
Item Amountsa
A. Base Cost
1. Component A: Hospital Feeder Upgrading Project – Stage 1 1.06
2. Component B: Single- and Three-Phase Prepayment Metering Project 6.24
3. Component C: Candidate Subprojects 69.04
4 Component D: Project Management 3.66
Subtotal (A) 80.00
B. Contingencies
1. Physicalb 4.67
2. Pricec 10.12
Subtotal (B) 14.79
C. Financing Charges During Implementationd 5.21
Total (A+B+C)e 100.00
a
In May 2007 prices.
b
Computed at 14% for hydropower projects, 10% for system control and data acquisition, and 5% for other
subprojects.
c
Computed at an average annual rate of 1.7% on foreign exchange costs and 3.9% on local currency costs over the
2008–2015 investment plan.
d
Includes interest during construction, computed at the 6.5% relending rate from Government to the Electric Power
Corporation and including the interest of 1% during grace period and 1.5% thereafter, which will be settled through
cash payments on the Asian Development Fund loan portion.
e
Includes taxes and duties of $2.18 million.
Sources: Asian Development Bank and Electric Power Corporation estimates.
B. Financing Plan
2. The Government of Samoa has requested a loan of $26.61 million [Loan No. 2368-
SAM(SF)] and a grant of $15.39 million from ADF [Grant No. 0087-SAM] to help finance the
Project. The loan will have a 32-year term, including a grace period of 8 years, an interest rate
of 1.0% during the grace period, and 1.5% thereafter, and such other terms and conditions set
forth in the financing and project agreements. The beneficiary will be the Independent State of
Samoa.
3. The Government has requested a loan of $38 million equivalent in Japanese yen
from JBIC (Loan No. 8232) for joint cofinancing of the Project, to be administered by ADB. The
loan will have a 30-year term, including a grace period of 10 years, at an interest rate of 0.45%.
17
4. The ADF loan, the ADF grant, and the JBIC loan will be provided to the Independent
State of Samoa and then relent by the Government to EPC. The relending will be based on
such terms and conditions set forth in the subsidiary financing agreement between the
Government and EPC. Such terms and conditions will include the relending to be released in
two tranches, an interest rate of 6.5%, and such conditions set forth in the financing agreement.
The first tranche, which will finance subprojects completed by 30 June 2012, will have a 25-year
term, including a grace period of 5 years. The second tranche, which will finance the remaining
subprojects, will have a 25-year term, including a grace period of 8 years. The Government will
assume the foreign exchange risk arising from the ADB and JBIC loans. ADB and JBIC will
finance 80% of the estimated project costs. The Government of Australia will provide $8 million
representing 8% of the estimated project costs. EPC will provide $12 million as counterpart
financing, which represents 12% of the estimated project costs. Table 2 presents the financing
plan, and the detailed cost estimates by financier are detailed in Appendix 6 (Table A6.2).
Table 2: Financing Plan

($ million)
Source Total %
Asian Development Bank ADF Loan 26.61 26.61
Asian Development Bank ADF Grant 15.39 15.39
Japan Bank for International Cooperation 38.00 38.00
Government of Australia 8.00 8.00
Electric Power Corporation 12.00 12.00
Total 100.00 100.00
ADF = Asian Development Fund.
Source: Asian Development Bank estimates.
5. The Government has requested a grant of $8 million from the Government of

Australia [Grant No. 0101-SAM] to help finance the Project on a joint cofinancing basis. The
grant will be provided as Government of Samoa equity to EPC for the purpose of meeting
counterpart financing requirements of the Project, with terms and conditions set forth in the
subsidiary financing agreement between the Government and EPC. ADB will administer the
grant on behalf of the Government of Australia.
6. The ADF grant of $15.39 million will ease the macroeconomic impact of the large
financing requirements for the Project. The grant will be relent to EPC on the same terms as the
ADB and JBIC loans. The interest payment from EPC to the Government on the grant portion
will provide ongoing financing for a CEF and a CDM subfund. 1 MOF will provide annual reports
to ADB on the interest payment directed to the CEF and CDM subfund. The Government will
utilize a portion of the grant as an incentive scheme for EPC for timely implementation of
subprojects under the investment plan. Seven percent of projects costs, or a maximum of $10
million of the EPC loan principal, can be converted to grants conditional on timely and to-budget
implementation of subprojects. MOF will report to ADB when EPC has met the conditions that
will trigger conversion to grants and advise of the amount of the loan principal to be converted
into grants to EPC.
1
The TA cluster for Implementing the Samoa National Energy Policy will assist in the establishment of a CEF and a
CDM subfund.
18
DETAILED COST ESTIMATES
Table A6.1: Detailed Cost Estimates by Expenditure Category
ST‘000 $‘000 % Foreign % Base

Foreign Local Total Foreign Local Total Exchange Costs
A. Investment Costs
Land Acquisition and
1. Resettlement 0 11,159 11,159 0 4,376 4,376 0.0 5.5
2. Civil Works 3,949 14,691 18,641 1,549 5,761 7,310 21.2 9.1
3. Equipment Supply and Installation 151,775 5,331 157,106 59,520 2,091 61,610 96.6 77.0
4. Consultant Services 7,212 5,069 12,281 2,828 1,988 4,816 58.7 6.0
5. Taxes and Duties 0 4,808 4,808 0 1,885 1,885 0.0 2.4
Subtotal (A)a 162,936 41,059 203,995 63,896 16,102 79,998 79.9 100.0
B. Contingencies
1. Physicalb 9,530 2,373 11,902 3,737 930 4,668 80.1 5.8
c
2. Price 16,468 9,340 25,809 6,458 3,663 10,121 63.8 12.7
Subtotal (B) 25,998 11,713 37,711 10,195 4,593 14,789 68.9 18.5
C. Financial Charges During
Implementationd
1. Interest During Constructione 5,883 7,410 13,293 2,307 2,906 5,213 44.3 6.5
Subtotal (C) 5,883 7,410 13,293 2,307 2,906 5,213 44.3 6.5
f
Total (A+B+C) 194,817 60,182 255,000 76,399 23,601 100,000 76.4 125.0
a
In May 2007 prices.
b
Computed at 14% for hydropower development, 10% for system control and data acquisition, and 5% for other subprojects.
c
Computed at an average annual rate of 1.7% on foreign exchange costs and 3.9% on local currency costs over the 2008–2015 investment plan.
d
Includes interest during construction, computed at the 6.5% relending rate from the Government to the Electric Power Corporation and including
an interest rate of 1% during grace period and 1.5% thereafter, which will be settled through cash payments on the Asian Development Fund
loan portion.
e
Interest during construction for Asian Development Fund loan will be settled through cash payments.
f
Includes taxes and duties of $2.18 million.
19
Table A6.2: Detailed Cost Estimate by Financier
($ million)
Government of
ADF Loan ADF Grant JBIC Loan Australia
EPC
L2368 G0087 L8232 G0101 Cost
$ % $ % $ % $ % $ %
A. Investment Cost
Land Acquisition and
1. 0.00 0.0 0.00 0.0 0.00 0.0 1.53 35.0 2.84 65.0 4.38
Resettlement
2. Civil Works 3.47 47.5 0.00 0.0 3.09 42.2 0.00 0.0 0.75 10.3 7.31
Equipment Supply and a a
3. 18.99 30.8 8.42 13.7 28.98 47.0 5.22 8.5 0.00 0.0 61.61
Installation
4. Consultant Services 0.00 0.0 4.57 94.9 0.00 0.0 0.00 0.0 0.25 5.1 4.82
5. Taxes and Duties 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0 1.89 100.0 1.89
Subtotal (A)b 22.46 12.99 32.07 6.76 5.73 80.00
B. Contingencies
c
1. Physical 1.31 28.1 0.76 16.2 1.87 40.1 0.39 8.4 0.33 7.2 4.67
d
2. Price 2.84 28.1 1.64 16.2 4.06 40.1 0.85 8.4 0.72 7.2 10.12
Subtotal (B) 4.15 2.40 5.93 1.25 1.06 14.79
Financing Charges During
C. e
Implementation
Interest During
1. 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0 5.21 100.0 5.21
Construction
Subtotal (C) 0.00 0.00 0.00 0.00 5.21 5.21
f
Total Project Costs (A+B+C) 26.61 15.39 38.00 8.00 12.00 100.00
% Total Project Costs 26.6 15.4 38.0 8.0 12.0
ADF = Asian Development Fund, EPC = Electric Power Corporation, JBIC = Japan Bank for International Cooperation.
a
The overall financing percentage will be 22.2% for the ADF grant and the Government of Australia grant. The financing percentage for the ADF and Government
of Australia grant proceeds will be changed over years as follows: (i) the financing percentage for the ADF grant will be 7.7% (rounded to 7%) for FY2008–
FY2012 and 22.2% (rounded to 22%) thereafter; and (ii) the financing percentage for the Government of Australia grant will be 14.5% (rounded to 15%) for
FY2008–FY2012 and zero thereafter. For disbursement purposes, the financing percentages will be rounded.
b
In May 2007 prices.
c
Computed at 14% for hydropower, 10% for system control and data acquisition, and 5% for other subprojects.
d
Computed at average annual rate of 1.7% on foreign exchange costs and 3.9% on local currency costs over the 2008–2015 investment plan.
e
Includes interest during construction, computed at the 6.5% relending rate from the Government to the Electric Power Corporation and including an interest rate
of 1% during grace period and 1.5% thereafter, which will be settled through cash payments on the Asian Development Fund loan portion.
f
Includes taxes and duties of $2.18 million. Interest during construction for the ADF loan will be settled through cash payments.
20
6. IMPLEMENTATION ARRANGEMENTS AND SCHEDULE
A. Project Management
1. Ministry of Finance (MOF) will be the executing agency for the Project and has assigned
EPC as the implementing agency. A PSC will be established to provide overall project
direction. 1 The chief executive officer (CEO) of MOF will chair the PSC. Other PSC members
comprise (i) the general manager of EPC, (ii) the attorney general, and (iii) the CEOs of the
Ministry of Natural Resources and Environment, the Ministry of Women, Community and Social
Development, the Samoa Water Authority, and the Ministry of Commerce, Industry and Labour.
PSC meetings will be convened on a quarterly basis commencing in October 2007. Special
PSC meetings may be convened to consider extraordinary project issues. A project
management committee (PMC) will be formed within EPC to provide coordination between
project and non-project activities. The PMC will be chaired by the general manager and
comprise EPC management and the project manager. The PMC will convene on a weekly basis
commencing in October 2007.
2. EPC has established a Project Management Unit (PMU) for the day-to-day management
and implementation of the project. The PMU will include personnel seconded from existing EPC
staff resources or recruited specifically for the PMU. Project implementation consultants will be
recruited to provide technical support and on-the-job training for the PMU personnel over the
first 3 years of the Project. The PMU will be responsible for project planning, monitoring and
reporting, and cost and quality control. The PMU will (i) undertake project management and
administration, (ii) plan and implement cost effective and sustainable infrastructure investments
to meet consumer demand, (iii) maintain project accounts, (iv) oversee procurement procedures
to ensure compliance with Government and ADB policies and procedures, (v) liaise with ADB
for quarterly project progress updates and other reporting and communication matters, and (vi)
prepare the project completion report of the Government. The Government will ensure that,
throughout the project implementation period, EPC provides adequate allocations of counterpart
funds to ensure proper project implementation. EPC will provide adequate office space for the
PMU and implementation consultants and ensure that the facilities provided are operated and
maintained appropriately.
B. Candidate Subproject Preparation and Approval
3. Preparation. The PMU will identify candidate subprojects and obtain approval from the
EPC board and MOF to assess the feasibility of the candidate subprojects. The PMU will
prepare a feasibility study for each candidate subproject in accordance with the detail and
quality required to enable ADB to assess the suitability of the candidate subproject. The
feasibility study will contain evidence of the candidate subproject’s eligibility under the agreed
criteria. The feasibility study will provide (i) technical analysis and description; (ii) subproject
rationale, scope, and components; (iii) cost estimates and financing plan; (iv) implementation
arrangements; (v) an environmental assessment; and (vi) a land acquisition and resettlement
assessment. The feasibility studies will include a set of relevant benchmark and performance
indicators for the subproject which will be monitored through the progress reports. The feasibility
study will also contain an update of EPC’s investment plan and an analysis of the impacts on
EPC’s 5-year financial projections, key financial ratios, and compliance with loan covenants.
1
Similar PSCs are being used for overall strategic guidance and coordination for infrastructure projects funded by
other international financing institutions.
21
4. Eligibility Criteria. The PSC, the EPC board, and ADB, in consultation with the PMU,
will appraise subprojects in accordance with the eligibility criteria and procedures outlined in
RRP, Appendix 7 found at the end of this Section.
5. Approval Process. Candidate subproject feasibility studies will be submitted to ADB for
review and approval. After ADB has endorsed the feasibility study, the PMU will submit the
feasibility study to the EPC board and the PSC for review and approval. Implementation of a
candidate subproject may only proceed following the endorsement of the candidate subproject
feasibility study by the PSC, the EPC board, and ADB. Civil works may only commence once
the land acquisition and resettlement plan (LARP) and initial environmental examinations (IEE)
have been approved by ADB, and the development concept approval of the Preliminary
Environmental Assessment Report (PEAR) is issued by the Planning and Urban Management
Agency (PUMA).
C. Implementation Period
6. The PMU will be established prior to loan effectiveness. Bid documents for core
subprojects have been prepared such that construction activities can start in the first quarter of
2008. The subprojects will be implemented over 8 years and are expected to be completed by
31 December 2015. The project implementation schedule is detailed in RRP, Appendix 8, and
appended at the end of this Section.
6ImplArrangements
22
RRP, Appendix 7
ELIGIBILITY CRITERIA AND PROCEDURES FOR CANDIDATE SUBPROJECTS
1. The Power Sector Expansion Project forms part of the Electric Power Corporation’s
(EPC) power sector expansion program to provide sustainable and reliable electricity services to
all consumers at cost-efficient prices. The project will improve the capacity to meet growing
electricity demand and improve cost-effectiveness of power supply by (i) improving the
operational efficiency and financial performance of EPC, (ii) improving quality and reliability of
electricity supply at least cost, and (iii) establishing an effective regulatory structure for the
power sector.
2. The project management unit (PMU) will identify candidate subprojects meeting the
criteria set forth in para. 3 below and will obtain approval from the EPC board to assess the
feasibility of the candidate subprojects and inform the project steering committee (PSC) of the
pending subproject feasibility study. The PMU will then prepare a feasibility study for each
candidate subproject. The candidate subproject feasibility report will, among other things,
provide (i) technical analysis and description; (ii) subproject rationale, scope, and components;
(iii) cost estimates and a financing plan; (iv) implementation arrangements; (v) an environmental
assessment; and (vi) a land acquisition and resettlement assessment. The feasibility report will
also contain an update of EPC’s investment plan and an analysis of the candidate subproject’s
impacts on EPC’s 5-year financial projections, key financial ratios, and compliance with Asian
Development Bank (ADB) covenants. Each feasibility report will be submitted to ADB for review
and approval and will contain sufficient evidence of the candidate subproject’s eligibility under
the agreed criteria and will be prepared in accordance with the detail and quality required to
enable ADB to assess the viability and suitability of the candidate subproject. The feasibility
reports will include a set of relevant benchmark and performance indicators for the subproject
which will be monitored through progress reports. After ADB has endorsed the feasibility study,
the PMU will submit the feasibility study to the EPC board and the PSC for review and approval.
Implementation of a candidate subproject may only proceed following the endorsement of the
candidate subproject feasibility report by the PSC, the EPC board, and ADB. The subproject
selection process is shown in Figure A7.
3. To be eligible for financing through the project, (structural) subprojects must be selected
in accordance with the following criteria.
(i) The subproject (a) contributes to the objectives of the Power Sector
Development Plan, (b) is identified as a high priority project in EPC’s annual
business plan, and (c) is included in EPC’s investment plan.
(ii) The subproject is technically feasible and meets the Government’s technical
standards and requirements.
(iii) The subproject is justified as the most feasible subproject to achieve the stated
objectives and is shown to be least-cost among feasible alternatives.
(iv) A land acquisition and resettlement plan (LARP) will have been prepared for the
subproject in accordance with the land acquisition and resettlement framework
(LARF), if required, and EPC will have submitted written confirmation to ADB that
the landowner and or lessee (in the case of freehold and state-owned land) or
23
the matai 2 (in the case customary land), acting on behalf of affected persons
under the subproject, is agreeable to the land acquisition and resettlement plan
terms and conditions.
(v) An environmental screening will have been conducted for the subproject and an
initial environmental examination (IEE), preliminary environmental assessment
report (PEAR), and environmental management and monitoring plan (EMMP) will
have been prepared for the subproject, in each case, in accordance with the
provisions of the environmental assessment and review framework.
(vi) ADB determines that EPC has the necessary staffing, implementation, and
financial management capacity to implement the subproject or, in the alternative,
EPC can provide specific assurances that assessed shortcomings can be
rectified, such as by adding qualified staff or providing timely in-service training.
(vii) The subproject's implementation timeframe is reasonable, and surveys and
design can be prepared and reviewed, and safeguard processes and procedures
followed and implemented, within the project period.
(viii) The financing plan clearly identifies confirmed sources of financing, including
counterpart financing, and includes the provision of budgetary resources to meet
(a) counterpart funding requirements for capital expenditures during the
construction phase, (b) resettlement costs, as applicable, (c) environmental
management costs, (d) loan repayment requirements, and (e) routine operations
and maintenance costs.
(ix) The subproject will not adversely impact on EPC’s ability to meet its financial
covenants under the ADB loan and grant.
(x) All required Governmental approvals shall have been obtained.
4. No subproject classified category A, in accordance with ADB’s Environment Policy

(2002), shall be eligible for financing under the Project.
2
The title matai is an elected chief representing an extended family unit. The title may be bestowed on anyone in the
customary Samoan society.
6ImplArrangements
24
Figure A7: Subproject Selection Process
PMU identifies candidate

subproject and submits outline
for approval by EPC board
No.
EPC board
endorses
preparation of
feasibility study
candidate
subproject?
Yes.
PMU notifies the PSC of the

EPC board endorsement and
prepares feasibility study and
submits to ADB for review
and approval
ADB endorses
feasibility study?
No.
Yes.
PMU submits feasibility study to

EPC board and the PSC for
review and approval.
EPC board and

Ministry of
Finance
endorses
No.
feasibility
ADB = Asian Development Bank,

Yes. EPC = Electric Power Corporation,
PSC = project steering committee,
PMU informs ADB of EPC board PMU = project management unit.
and the PSC endorsement of the Source: Asian Development Bank.
subproject
PMU commences implementation

of the subproject
PROJECT IMPLEMENTATION SCHEDULEa
Component 2008 2009 2010 2011 2012 2013 2014

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Core Subprojects
Hospital Feeder Upgrading Project – Stage 1
Single- and Three-Phase Prepayment Metering Project
Upolu Generation
Tanugamanono Power Station Noise and Emission
Control Program
Refurbishment of Alaoa Hydropower Station
Upolu Diesel Power Station Project
Transmission Upolu
Upgrade of the Alaoa 6.6 kV Transmission Line to 22 kV
Project
Upolu Diesel Power Station to Fuluasou Substation
Underground Cable Project
Hospital Feeder Upgrading Project - Stage 2
22 kV Fuluasou Substation Project
Low-Voltage Network Expansion Program
Fuluasou Substation to Apia Wharf Area 22 kV
Fuluasou Substation to Laulumauga via Vaigaga 22 kV
22 kV Overhead Conductor Upgrading Program
Generation Savai'i
Hydropower Scheme
Transmission Savai'i
Puapua–Asau Transmission Line 22 kV Reconductoring
Project
Power Factor Improvement Program
Low-Voltage Network Expansion Program
Measurement Equipment
Measurement Equipment (electric high voltage/current
and stream flow gauging)
SCADA
SCADA
Consultants
PMU, Implementation Consultants
25
kV = kilovolt, PMU = project management unit, SCADA = system control and data acquisition.
a
Implementation start is defined as commencement of design and documentation (after the feasibility study is prepared and approved by the Asian Development Bank and
the project steering committee).
Source: Asian Development Bank.
26
7. CONSULTANTS
A. General Principles/Policies
1. The policies and main procedures for recruiting consultants are set out in the Guidelines
on the Use of Consultants by Asian Development Bank and Its Borrowers (Guidelines).
Borrowers must comply with ADB’s requirements and follow ADB’s procedures. The Financing
Agreement states the roles and responsibilities of the Borrower, ADB, and any other parties
involved and the procedures that should be followed.
2. If a Borrower does not select the consultants in accordance with the Guidelines and the
relevant financing agreement, ADB will not finance the consulting assignment under the grant.
In these cases ADB declares misprocurement, and usually cancels the financing. In appropriate
cases, ADB may permit reissuing the request for proposals (RFP) after declaring
misprocurement.
3. When recruiting consultants with ADB funds, Borrowers are expected to promptly recruit
consultants who will provide high-quality services. The normal means of selection is through
competitive bidding among qualified firms. In carrying out the selection, Borrowers should,
whenever possible, short list consulting firms from different geographic regions in order to
spread the opportunities to work on consulting assignments among ADB’s member countries.
Borrowers may specifically recruit national consultants from their countries, when national
consultants are qualified for the assignments.
4. All the parties under ADB-financed consulting services contracts must observe the
highest ethical standards. If ADB determines that representatives of a borrower, a consultant, or
a beneficiary engaged in corrupt, fraudulent, collusive, or coercive practices during consultant
selection or the execution of a contract, ADB will take the appropriate steps set out in paragraph
1.23 of the Guidelines.
5. Allegations of corrupt, fraudulent, collusive, or coercive practices must be reported to the

Office of the General Auditor, Integrity Division (separately discussed under Section 14).
B. Consulting Services Requirement Under the Project
6. Consulting services will be required for (i) project management, (ii) preparation of
candidate subprojects, (iii) construction supervision, and (iv) contract management. A firm will
be selected through international competition using quality-and cost-based selection method to
provide project implementation consulting services. About 69 international person-months will
be required for project implementation. Individual consultants may be recruited for specific
assignments in accordance with ADB’s procedures. The project manager has recruited
internationally as an individual for an initial period of 36 months in accordance with ADB’s
procedures. 1 The outline terms of reference for the project manager and implementation
consultants are appended at the end of this Section (RRP, Supplementary Appendix A).
C. Advance Contracting
7. To facilitate timely implementation of the project, ADB has approved retroactive

financing and advance action for procurement of consulting services. Up to 20% of loan
1
ADB assisted with the selection process on behalf of EPC for both the Project Manager and Project Implementation
Assistance consultancies. EPC is responsible for negotiating the contracts and supervising consulting services.
27
proceeds are eligible for retroactive financing. Retroactive financing is applicable to eligible
expenditures, which must have been incurred before loan effectiveness, but generally no earlier
than 12 months before signing of the financing and project agreements.
D. Procurement Plan
8. The Project’s Procurement Plan (RRP, Appendix 9) is attached at the end of this
Section. Within 1 year after the date of loan effectiveness, the EA should submit a revised
procurement plan to ADB for approval that captures all the ongoing procurement and those
planned for the following 18 months. The procurement plan should be updated annually for the
duration of the Project.
9. Table A9.3 of the Procurement Plan states that the Project will select the consulting firm
using the Quality-and Cost Based Selection Method (QCBS), Full Technical Proposal. The
threshold for using QCBS is $1,000,000 or greater and the quality-cost ratio for evaluation of
proposals will be 80:20.
E. Recruitment Procedures Applicable to the Project
10. Advertising. A notice describing each consulting assignment is posted in the ADB
Business Opportunity section of ADB’s website before shortlisting. The minimum posting time
for each assignment is 30 days. The website includes a link to a standard expression of interest
(EOI) form for loans that firms can download, fill out, and send directly to the EA. The EA may,
in addition, advertise in local newspapers and international trade publications.
1. Quality-and Cost-Based Selection (QCBS)
11. QCBS is a method of selecting a consulting firm based on both the quality of the
technical proposals and the cost of the financial proposals. The general guidelines are as
follows.
a. Preparing the Shortlist
12. The EA/IA first reviews the scope of the assignment, the detailed TOR, and EOIs
received for the assignment and then prepares a long list. This normally includes 15–20
technically qualified consulting firms with experience in similar projects. The EA normally
includes all the qualified consultants that expressed interest. The EA may also ask the user
division officer for a list of qualified consultants from ADB’s Consultant Management System
(CMS). The EA decides whether to include any of these consultants on the long list and may
also add other experienced consultants to the list.
13. The EA/IA then prepares a short list of six consultants. This may be done through a
consultant selection committee (CSC) set up by the borrower and including staff of the EA, or by
a CSC set up within the EA itself, depending on the normal procedure in the country concerned.
14. To ensure a wide geographic spread for projects requiring international consulting input,
the short list should contain firms from a broad range of ADB member countries. When possible,
short lists should include one firm from any one country, but no more than two firms are allowed
for any one country. In addition, there should be at least one firm from a developing member
country (DMC), unless no qualified DMC firm has expressed interest or one cannot be identified
from the CMS.
28
b. Preparing the Request for Proposals (RFP)
15. The EA/IA next prepares the RFP documents in ADB’s format. Templates for this are
available on the ADB website. The information in the RFP must include the following:
 names of the short-listed consultants;

 selection method the EA will use;
 detailed TOR;
 estimates of the total international and national person-months and the costs;
and the required expertise, data, facilities, services, and reports;
 type of technical proposal requested and instructions on how to prepare that type
of proposal;
 evaluation criteria for the technical proposals;
 EA’s budget for the assignment, including any provisional sums or contingencies;
 deadline for the EA to receive the proposals; and
 addresses of the EA and ADB to which the consultants must send copies of the
proposals.
16. The RFP should explain the following:
 The successful consultant must disqualify itself, its affiliates, and its associates
from participating in the project in any other capacity. For example, firms of
independent consulting engineers are limited to the role of consulting engineers
and must not also act as contractors or manufacturers.
 The EA may exclude a consultant if it is found to have a conflict of interest
(Guidelines paragraphs 1.10-1.11) or if the EA determines that a consultant
engaged in corrupt, fraudulent, collusive, or coercive practices (Guidelines
paragraph 1.23).
 Firms that have expressed interest as a part of a joint venture or association will
be short-listed as such, and all firms that indicated their participation are
expected to be represented in the proposal. Additional firms may be included in
the joint venture or association when the proposal is submitted.
17. The RFP includes instructions on submitting financial proposals and other procedures
that are specific to the selection method the EA will use. It includes a data sheet, which, among
other information, states the EA’s budget for the assignment. This is either in maximum budget
or an estimated budget. A maximum budget is shown when costs are certain and it is unlikely
that financial proposals will exceed this budget. An estimated budget is shown when cost
estimates are not certain and it is possible that financial proposals may exceed it. When
preparing the RFP, the EA should ascertain that all costs that may be included in the
consultants’ contract are included in the estimated contract budget published in the data sheet.
These should include (besides consulting fees) per diems, travel costs, the costs of any vehicles
or equipment specifically associated with the consultancy, and any special items (for example
the cost of recruiting non-government organizations or providing training). Any fixed costs such
as provisional sums or contingencies should be clearly identified.
18. For QCBS in which the data sheet indicates a maximum budget, the RFP will clearly
state that financial proposals must be within this budget; otherwise the financial proposal will be
considered non-responsive and will not be awarded any points during the financial evaluation.
For QCBS in which the data sheet indicates an estimated budget, firms will not be penalized if
the financial proposal exceeds the budget.
29
c. Reviewing the EA’s Short-listing Documents and Request for Proposals
19. When the EA submit its short-listing documents to ADB for approval, it must be in ADB’s
standard format, updated from the most recent version available on ADB’s website. The
Pacific Operations Division (PAHQ, the user division) reviews the EA’s short-listing criteria and
short list, to make sure that the criteria are reasonable and rational relative to the scope of work,
the TOR, and the budget available and that all the firms are technically qualified and have a
reasonable geographic spread.
20. PAHQ also reviews the RFP, paying particular attention to
 TOR and background information provided to ensure that they are in line with the
project scope and consultant duties spelled out in the RRP and loan agreement;
 EA’s budget for the assignment to ensure a realistic level of remuneration, per
diem rates, and out-of-pocket expenditures; relevant and adequate provisional
sums; and adequate contingencies;
 selection method, the type of technical proposal, and whether these are in line
with the recommendations in the procurement plan;
 validity and appropriateness of the criteria for evaluating the technical proposals,
 changes made to the draft contract; and
 proposed timing for consultant recruitment illustrated in the CRAM frame.
21. Once the documents are received, PAHQ reviews them and then sends its comments to
COSO for further review. COSO then completes the review and offers comments for transmittal
to the EA within a reasonable time. If necessary, PAHQ or COSO may consult the Office of the
General Counsel (OGC) on key issues. If there are outstanding issues, COSO or PAHQ may
also request a CSC meeting to review the documents. The user division informs the EA of any
deficiencies, shortcomings, or gaps in the documents and requests them to be revised
accordingly. Once the documents are in order, PAHQ informs the EA of its approval and
provides clearance for the EA to proceed with the issuance of the RFP.
22. The PAHQ staff concerned should ensure that all documentation listed in the relevant
checklist is in order and in conformity with ADB's standard templates, and that the user division
assessments and recommendations in connection with review of the EA's short-listing, technical
and financial evaluation have been undertaken in accordance with applicable ADB procedures
and guidelines. It is the responsibility of PAHQ to identify issues of concern or potential concern
to the relevant COSO officer at the time of, or prior to, submission of the relevant checklist. In
addition to checking the completeness and consistency of the relevant checklist submitted and
the assessments and recommendations made by PAHQ, COSO will undertake a detailed
review of all documents submitted by the EA
23. Based on the review done by PAHQ and COSO, COSO completes a checklist (sample
attached) to document the main areas of review and concerned COSO director signs the
checklist for record.
d. Requesting Proposals
24. The EA then sends RFPs to the consultants on the short list. The consultants
acknowledge receiving the RFPs and any notices from the EA of extensions to the deadline for
receiving proposals. The consultants also advise whether they intend to submit proposals. If
30
there are any queries from the consultants, the EA must provide all the short-listed consultants
with the same information without disclosing the source of the query.
e. Evaluating the Technical Proposals
25. After receiving the consultants’ proposals, the EA rejects any it receives after the stated
deadline. The EA then establishes a CSC, which evaluates the technical proposals using the
evaluation criteria approved by ADB. The CSC prepares minutes of its evaluation meeting and a
report on its evaluation, describing the strengths and weaknesses of each proposal.
f. Reviewing the EA’s Technical Evaluation Documents
26. If the EA’s procurement plan requires it to submit its technical evaluation documents to
ADB for approval, the EA submits its documents in ADB’s standard format available on the ADB
website or provided by the user division officer. The documents include
 a summary evaluation sheet highlighting any proposal that scored less than 750
points out of 1,000,
 a personnel evaluation sheet for each proposal,
 comments on the strengths and weaknesses of each proposal, and
 minutes of the evaluation meeting(s).
27. PAHQ reviews the documents and sends the documents and its comments to COSO for
further review. COSO then completes the review and offers comments for transmittal to the EA
within a reasonable time. The user division informs the EA of any deficiencies, shortcomings, or
gaps in the documents and requests them to be revised accordingly. Once the documents are in
order, the user division informs the EA of its approval. If there are outstanding issues, COSO or
the PAHQ may request a CSC meeting to review the documents.
28. Based on the review done by the user division and COSO, COSO completes a checklist
to document the main areas of review and concerned COSO director signs the checklist for
record.
g. Requesting and Evaluating the Financial Proposals
29. The procedure for requesting and evaluating financial proposals varies depending on the
selection method.
h. Reviewing the EA’s Financial Evaluation and Overall Ranking Documents
30. If the EA’s procurement plan requires it to submit its financial evaluation and final
ranking documents to ADB for approval, the EA submits its documents in ADB’s standard
format downloaded from ADB website or provided by the user division officer. PAHQ reviews
the documents, provides comments, and submits them to COSO for further review. COSO
provides its comments within a reasonable time period. For bids under QCBS the documents
should be carefully checked to ensure that inadvertent mistakes have not been made when
adjusting the original financial bids to the evaluated financial price. A CSC may be formed to
review the documents and resolve the issue. Prior to approval, the EA is informed or any
deficiencies, shortcomings, or gaps in the documents and is requested to revise them
accordingly. PAHQ informs the EA of ADB’s approval once outstanding issues are resolved.
i. Negotiating the Contract

31
31. The EA then writes to the first-ranked consultant and advises that it wishes to negotiate
a contract. The EA normally conducts the negotiations face-to-face. The consultant must pay all
its representative’s costs to attend the negotiations. The letter
 invites the consultant to send a representative to the EA’s offices, who will be
prepared to discuss the consultant’s proposal and has the authority to finalize
and sign a contract;
 proposes a schedule and agenda;
 asks the consultant to confirm the availability of all the team members nominated
in its technical proposal; and
 summarizes any issues identified during the evaluation that require clarification,
any deficiencies to be corrected, any team members to be replaced, or any other
corrective action to be taken.
 If there is likely to be a delay in negotiations, the letter may also request the
consultant to extend the validity of its bid for a reasonable time until negotiations
can be held.
32. The negotiations cover the TOR, the consultant’s methodology and work plan, the team
members and personnel schedule, the counterpart facilities the EA will provide the financial
terms, and the other terms and conditions in the contract. The procedure for negotiating the
financial terms depends on the selection method (see PAI 2.02, Part A). The EA prepares
minutes of the important points of agreement.
33. If the EA and the consultant cannot reach agreement, the EA may ask ADB’s agreement
to terminate the negotiations and start negotiations with the next-ranked consultant, in turn, until
it reaches an agreement.
j. Reviewing the EA’s Draft Contract
34. If the EA’s procurement plan requires it to submit its draft negotiated contract and the
minutes of the contract negotiations to ADB for approval, the EA submits them in ADB’s
standard format, provided by the user division officer. The user division reviews and approves
them. The division
 makes sure that the negotiated terms and conditions are satisfactory;
 asks COSO, the Controller's Department (CTL), and OGC for comments, if
necessary; and
 requests the EA to make changes or amendments as considered necessary.
35. Once the documents are considered to be in order, the user division advises the EA of
ADB’s approval.
k. Finalizing the Contract
36. After receiving ADB’s approval, the EA signs the contract, obtains the consultant’s
signature, and submits a copy to ADB for its records. The EA also submits some information for
ADB to publish on its website. This consists of
 names of the short-listed consultants who submitted proposals;

 scores of their technical proposals;
32
 prices in their financial proposals (for QCBS);

 overall ranking (for QCBS);
 name of the consultant selected; and
 cost, duration, and summary scope of the contract.
37. After completing the selection, it is the EA’s responsibility to brief the short-listed
consultants on the reasons for their ranking, when asked.
38. After receiving the signed contract, the user division checks that it is substantially the
same as the draft negotiated contract approved earlier. The division sends copies of the signed
contract to COSO, CTL, and OGC. The user division sends copies of all relevant
communications to COSO.
l. Terminating a Contract
39. When an EA proposes to terminate a contract with a consultant, it sends a

recommendation to ADB. The user division consults COSO and OGC, decides whether
termination is warranted, and advises the EA of the decision. When the division approves
termination, the EA sends a written notice to the consultant, in accordance with the provisions in
the contract.
40. The flowchart for recruiting consulting firms using QCBS is provided below.
33
RECRUITING CONSULTING FIRMS FOR LOANS

(QCBS, QBS, FBS and LCS)
EXECUTING AGENCY ADB
Fact-finding mission assesses EA procurement capacity and

Prepares a procurement plan hels prepare a procument plan
Advertises project in newspapers, etc. User division lists project in ADBBO
Discusses TOR TOR developed Appraisal mission discusses TOR with the EA
Receives EOIs and prepares long list of consultants User division provides list of firms from DACON
Conducts CSC; submits documents (signed CSC meeting User division reviews EA submission; prepares checklist;
minutes; long list; short-listing criteria; narrative evaluation SUBMISSION 1 submits its evaluation to COSO; and requests for an informal
criteria; short-list; draft RFP with TOR, Data Sheet, meeting
Summary and Personnel Evaluation sheets and draft
contract; and draft CRAM sheet) t
COSO checks user division's submission for completeness

and schedules the informal meeting
COSO and user division officers meet and jointly complete

the checklist and then sign it
COSO Director approves completed checklist, and sends a

copy to user division
Issues RFP to short-listed firms User division informs EA of ADB approval.
Informs user division of RFP issuance User division informs COSO to post short-list on ADB website.
Evaluates technical proposals; submits technical evaluation SUBMISSION 2 User division reviews EA submission, prepares checklist,
report (minutes of EV meeting[s], summary & personnel submits to COSO, and requests for an informal meeting
evaluation sheets) to user division


If QCBS, evaluates financial proposal of technically qualified

firms; if FBS, evaluates financial proposal of firm with highest
technical score and bid within maximum budget; if LCS, User division informs EA of ADB approval.
evaluates financial proposal of technically qualified firm with
lowest f
For QCBS, FBS and LCS: Submits financial evaluation SUBMISSION 3

User division reviews documents and submits to COSO
report (minutes of CSC meeting[s], and overall ranking) to
user division
For QBS: go to next step
User division reviews EA submission, prepares checklist,
submits to COSO, and requests for an informal meeting



Invites first-ranked firm and ADB observer, if required, to
contract negotiations User division informs EA of ADB approval
Negotiates contract
Forwards draft negotiated contract and minutes to user SUBMISSION 4 User division approves draft negotiated contract and informs
division for approval EA of ADB approval
Finalizes and signs contract with the winning firm
User division retains copy of contract and informs COSO to

Provides information for posting on ADB website and sends
post contract information on ADB website
copies of signed contract to user division and the winning firm
Sends notice to proceed to winning firm
Advises unsuccessful firms

34
2. Individual Consultants
41. Individual consultants are more appropriate than firms when the assignment is
straightforward and does not require a team of experts and extra support from the consultant’s
home office. The EA’s main requirements are the consultants’ qualifications and experience.
The procedure/flowchart for recruiting individual consultants is provided at the end of
this Section.
42. Borrowers may engage individual consultants directly or through an organization such as
a consulting firm, an academic institution, a government agency, or an international agency.
43. ADB categorizes individual consulting assignments as:
 international if they require international experience, and consultants from all

ADB member countries may apply and be considered; or
 national if they require expertise available only in the borrowing country, and only
nationals of the borrowing country may apply and be considered.
Nationals of the country concerned who have extensive international experience may be
considered as international consultants for assignments that require an international level of
expertise. (Extensive international experience is generally defined as having been recruited for
three or more contracts at an international level, but also includes individuals of internationally
acknowledged expertise in their professional fields.)
44. ADB encourages assignments for national consultants from the project country when
qualified national consultants are available.
45. For international consulting assignments, borrowers should short-list consultants from
different geographic regions in order to ensure access to the best expertise available and to
spread the opportunities to work on consulting assignments among ADB’s member countries.
46. ADB’s anticorruption policy requires borrowers and consultants under ADB-financed
contracts to observe the highest ethical standards. If ADB determines that representatives of a
borrower, a beneficiary, or a consultant engaged in corrupt, fraudulent, collusive, or coercive
practices during consultant selection or the execution of a contract, ADB may take any of the
steps set out in the Guidelines, paragraph 1.23. Allegations of corrupt, fraudulent, collusive, or
coercive practices will be reported to the ADB’s Office of the General Auditor.
a. Selecting and Approving the Short List
47. Several weeks before an individual consulting assignment is scheduled to start, the EA
prepares a short list of at least three qualified candidates. The EA normally includes no
more than one candidate from any ADB member country. At the EA’s request, the user division
will provide the names and qualifications of suitable candidates from the DICON. The EA may
also advertise for suitable candidates.
48. The EA ranks the candidates, and then normally submits their names and qualifications
and the draft contract it will use for the engagement to ADB for approval. The user division
 reviews the EA's documents;

 consults the Central Operations Services Office (COSO), if necessary;
35
 asks the Controller's Department (CTL), Office of the General Counsel (OGC), or
other relevant departments and offices for comments, if necessary;
 approves the EA's documents or identifies needed revisions;
 prepares a note to file summarizing the issues raised and the decisions taken;
and
 advises the EA of ADB’s decision.
b. Negotiating and Approving the Contract
49. After ADB approves the ranked short list and draft contract, the EA negotiates with the
first-ranked candidate. If the negotiations fail, the EA obtains ADB’s approval to negotiate in turn
with the next-ranked candidate until agreement is reached. The EA then normally sends a copy
of the draft negotiated contract to ADB for approval.
c. Finalizing the Contract
50. After ADB approves the draft negotiated contract, the EA concludes the negotiations,
signs the contract, and submits a copy to ADB for its records. After receiving the signed
contract, the user division checks that it is substantially the same as the draft already approved
and gives copies to COSO, CTL, and OGC. The division must send copies of all
communications regarding consultants to COSO.
d. Terminating Contracts
51. When an EA proposes to terminate a contract with an individual consultant, it sends a

recommendation to ADB. The ADB user division consults COSO and OGC, decides whether
termination is warranted, and advises the EA of the decision. When the division approves
termination, the EA sends a written notice to the consultant, in accordance with the provisions in
the contract.
52. The flowchart for recruiting individual consultants is shown below.

36
RECRUITING INDIVIDUAL CONSULTANTS FOR LOAN/GRANT PROJECT ASSIGNMENTS
CONSULTANT EXECUTING AGENCY ADB
Fact-finding mission assesses

Prepares a procurement plan EA and helps prepare a
procurment plan
User division lists project in

Advertises project in newspapers, etc.
ADBBO
User division provides list of

Receives EOIs; if desired, asks ADB list of qualified
Submits EOI qualified candidates from DICON,
candidates from DICON
if requested
Prepares short lilst (at least 3) and ranks candidtates on the

list
Checks availability of first-ranked candidate on a

Confirms availability
noncommittal inquiry
If stated in procurement plan, submits candidates' names, User division approves EA's
qualifications, and draft contract to ADB documents
User division checks to ensure

Negotiates and signs Negotiates with first-ranked candidate, finalizes, and signs
that candidate is not sanctioned
contract contract
by ADB
User division retains copy of

Sends copy of signed contract to ADB
contract
Sends copy of signed contract and notice to proceed to

Starts work
consultant
37
G. Consultant Recruitment Activity Monitoring (CRAM)
53. The EA and the user division use CRAM frames for loans/grants to monitor the activities
in recruiting the consultant and to avoid delays. An example of a CRAM frame and a flow chart
of the CRAM process is provided at the end of this Section.
54. CRAM identifies the main activities in the recruitment process, the time normally
required for each activity, and target dates for completing each activity. The EA and user
division staff responsible for completing each activity and for monitoring the recruitment process
use CRAM to identify delays and to take prompt action to get the recruitment process back on
schedule.
55. When the EA schedules and advises ADB of the date of its CSC meeting to short-list
consulting firms for an assignment, the user division creates a CRAM frame for the
assignment. The system automatically generates a recruitment schedule, including the planned
dates for each activity and the cumulative number of days since short-listing. The number of
calendar days required for each activity is based on “norms” for each selection method and type
of technical proposal.
56. The user division sends a copy of the CRAM frame for the assignment to the EA. The
EA’s CSC short-listing meeting then discusses and confirms the CRAM schedule. If the EA is
required to submit its CSC meeting documents to ADB for approval, the EA includes the CRAM
frame.
57. If ADB approves the EA’s technical evaluation and financial evaluation/overall ranking (if
the EA uses QCBS), the user division sends the EA an updated CRAM frame. The responsible
EA staff member monitors the recruitment process and reports to the ADB user division officer
the date when each activity is completed and the reason for any delays. The ADB user division
officer enters the completion dates in column 6. Planned dates cannot be changed.
58. Columns 8 and 9 in the CRAM frame show the difference in days between the planned
and actual dates for completing each activity, and the difference between the planned and
actual days since short-listing. When an activity is completed later than the planned date, the
ADB user division officer enters in column 11 an explanation and the action the EA and ADB
need to take to get the recruitment back on schedule. The upper right corner of the CRAM
frame shows the date the frame was last edited.
38
USING CRAM FOR LOAN PROJECTS
COSO USER DIVISION EXECUTING AGENCY
Develops a standard CRAM Creates a CRAM frame by

Receives the CRAM frame
template inputting loan data
During fact-finding/appraisal mission, ADB user division officer discusses

w ith the EA the consultant recuitment schedule based on CRAM targets
Inputs scheduled sho rt-listing

date in the system to generate Receives the CRAM frame w ith
Receives a CRAM frame for
recuitment schedule; recruitment schedule for
logging in the system sends the CRA M frame with confirmation at CSC-SL
recruitment schedule to EA
Sends the confirmed CRAM

frame to ADB together w ith short
list and RFP documents
Assigns a staff to be responsible

for monitoring recruiment
process, if not already done
Inputs actual date of each

Checks planned activity on
activity; takes appropriate Assigned staff reports to ADB
daily basis and sends
action w here actual date the actual date of each activity
reminder to the user division
exceeds planned date; under EA's supervision and
for action if planned activity
inputs explanation/reason explains any delays
is not achieved on schedule
and action taken
Receives monthly CRAM

Sends email on a monthly
frames and forw ards copies Receives monthly CRAM frames
basis to directors of user
to the EA. Takes action and takes action w hen needed
divisions
w hen needed
When the recruitment

process is completed,
stores completed CRAM
frames in database
When the recruitment

Evaluates CRAM frames
process is completed,
annually and, if requred, Receives a completed CRAM
makes a hard copy of CRAM
proposes recommendation frame and inserts it into the
frame and places it in the
for streamlining recruitment project file
project file and sends a
process
copy to EA
39
Consultant Recruitment Activity Monitoring (CRAM)
A. Loan No., Name and Title

B. Contract Budget (US$) 1,700,000 Package Naumber
C. Selection Method QCBS Financing:
D. Type of Technical Proposal Full
E. Executing Agency (EA)
F. EA Contact Person
G. Loan Supervising Unit(LSU)/Dept.
H. ADB Project Officer Initials: Project Assistant:
I. ADB COSO Officer Initials: Last edited by:
J. Actual Date of EA CSC Short-Listing (SL) Meeting
Norm Planned Actual Deviation

Responsible
Activity Work Cal. Cum. Achieved Cum. Cum. Explanation and Action
Staff Dates Days Days
Days Days Days Date Days Days
1 2 3 4 5 6 7 8 9 10 11 12
1 EA submitting to ADB LSU 10

2 COSO receipt of SL 4
3 COSO approval of SL 4
4 ADB sending approval of SL to EA 2
5 EA issuing RFP 7
6 Proposal Submission 45
7 EA CSC-EV meeting 21
8 EA submitting technical evaluation report to ADB 10
9 COSO receipt of evaluation report 4
10 COSO approval of evaluation report 4
11 ADB sending approval of technical evaluation to EA 2
12 EA issuing invitation for public opening 7
13 Public Opening 14
14 EA signing of overall ranking minutes and submitting to ADB 21
15 COSO receipt of overall ranking 3
16 COSO approval of overall ranking 3
17 ADB sending approval of overall ranking to EA 2
18 EA issuing invitation for contract negotiations 3
19 Commencement of negotiations 14
20 Completion of negotiations 14
21 EA submitting negotiated contract to ADB 21
22 ADB approval of the negotiated contract 5
23 EA signing of the contract 14
24 Consultant's mobilization 14
Total number of calendar days 248
Notes:
a. Activity Norms [column 3] are based on working days with the exception of activities 6 and 19 which are based on calendar days.
b. The base date for planning and monitoring is the date of CSC-SL meeting.
c. Planned dates, days and cumulative days (columns 5 and 6, respectively) are derived from the Norms and are computed as calendar days.
d. Actual achieved dtaes (column 7) are input by the responsible project officer from the concerned user division, and Actual days and cumulative days (columns 8 and 9 respectively) are computed as calendar days.
e. Deviations are computed in calendar days and cumulative calendar days (columns 10 and 11).
f. For simplified technical proposal, norm is 35 days (238 total); for biodata technical proposal, norm is 21 days (224 total).
40
8. PROCUREMENT
A. General
1. Except as ADB may otherwise agree, all goods and services and other items of
expenditure to be financed out of the proceeds of the Loan and the Grant, and the JBIC Loan
and the Government of Australia Grant, shall be subject to and governed by the ADB’s
Guidelines for Procurement (2007, as amended from time to time), copies of which have been
furnished to the Executing Agency and Implementing Agency.
B. Basic Principles
2. The five basic principles of the Guidelines include: (i) for Loans or grants from Special
Funds resources, the proceeds of ADB financing can be used only for procurement of goods
and works supplied form, and produced in, member countries of ADB; (ii) economy and
efficiency in the implementation of the project, including the procurement of the goods and
works involved; (iii) giving all eligible bidders from developed and developing countries the same
information and equal opportunity to compete in providing goods and works financed by ADB;
(iv) encourage the development of domestic contracting and manufacturing industries in the
country of the Borrower; and (v) transparency in the procurement process. The list of ADB
member countries is at the end of this Section.
3. The ADB Standard Bidding Documents (SBDs) for the Procurement of Goods and
Related Services including a User’s Guide to the SBDs can be downloaded from the ADB’s web
site at the following URL: http://www.adb.org/Procurement/bidding.asp. The use of the new
SBDs for the procurement of Goods and Related Services is mandatory. ADB’s Guidelines for
Procurement require that Borrowers must use the appropriate SBDs issued by the ADB for
International Competitive Bidding. ADB’s bid documents will be used for procuring ADB, JBIC,
and Government of Australia financed goods and services.
C. Procurement Plan
4. EAs are required to prepare a procurement plan covering the first 18 months of
procurement activity. The agreed procurement plan is attached as Appendix 9 to the RRP (copy
at the end of this Section). Within one year after the date of loan effectiveness the EA shall
submit a revised procurement plan to ADB for approval that captures all ongoing procurement
and that planned for the following 18 months. The plan shall be updated annually on the same
basis for the duration of the Project.
5. The purpose of the procurement plan is to:
 Provide a single point of reference for the procurement oversight and supervision
 To create a tool that allows for process and review thresholds to be changed if
necessary over the lifetime of a project
 Focus the EA on the need to plan and manage procurement
 To provide a synopsis of the procurement opportunities to providers of goods,
works and consultants service.
 Increase levels of transparency
41
D. Procurement of Goods and Works
6. Except as ADB may otherwise agree, Goods and Services shall only be procured on the
basis of the methods of procurement set forth below:
International Competitive Bidding

Shopping
The methods of procurement are subject to, among other things, the detailed arrangements and
threshold values set forth in the Procurement Plan. The Beneficiary may only modify the
methods of procurement or threshold values with the prior agreement of ADB, and modifications
must be set out in updates to the Procurement Plan.
7. The procurement thresholds for goods and related services, and works and supply install
contracts are provided below.
Procurement Method Threshold

ICB Works $100,000 (minimum)a
ICB Goods $500,000 (upper limit)
Shopping $100,000 (upper limit)
ICB = international competitive bidding.
a
National competitive bidding is not feasible due to the lack of local contractors and suppliers, and the small size of
Samoa.
a. Procurement Procedures (Relevant to the Project)
(a) International Competitive Bidding (ICB)
8. The EA must follow ADB’s Procurement Guidelines and procedures in preparing

prequalification, bidding, and contract documents; advertising bid invitations; and accepting,
opening, and evaluating bids. Draft prequalification and bidding documents, bid evaluation
reports, and proposed awards of contract are subject to prior review and approval by ADB. A
flowchart of ICB procedures, (both with and without prequalification) is provided at the end of
this section.
9. Advertisement and Notification – All eligible member countries of the ADB (list is
provided at the end of this Section) shall be appropriately notified of opportunities to bid.
Invitations to bid shall be advertised in the ADB’s website as well as in a newspaper of general
circulation in the borrower’s country (at least in one English language newspaper).
10. The EA is required to prepare and submit to ADB a draft General Procurement Notice
(GPN). 1 The notice contains information concerning the borrower, amount and purpose of the
Loan/Grant, scope of procurement under ICB, and the name, telephone number, email address
(or fax number) and address of the Borrower’s agency responsible for procurement and the
address of the website where specific procurement notices will be posted. If known, the
scheduled date for availability of prequalification or bidding documents should be indicated. The
GPN appears in adb.org for at least one month, but preferably three months, before the first
prequalification (where prequalification is to be carried out) or bidding documents are made
1
The GPN for the Project was published in adb.org on 11 October 2007.
42
available for issue. A Specific Notice (SN) refers to the advertisement for prequalification
(where prequalification is to be carried out) or bidding for an individual contract. Publication of
the SN for an individual contract follows immediately after the publication of the invitation for
prequalification or bids in a local English newspaper of general circulation or on a well-known
website.
11. Prequalification of Bidders -Prequalification of bidders is required for large or complex

works, such as turnkey contracts, and contracts for the supply of expensive and technically
complex equipment, to ensure that only technically and financially capable firms will be invited
to submit bids. Prequalification shall be based entirely upon the capability and resources of
prospective bidders to perform the particular work satisfactorily, taking into account: (i) relevant
experience and past performance; (ii) capabilities with respect to personnel, equipment, and
plant; and (iii) financial position.
12. Invitations to prequalify shall be advertised and notified in accordance with the
procedures described above. The scope of the contract and a clear statement of the
requirements for qualification shall be sent to those who responded to the invitation. A minimum
period of six weeks shall be allowed for the submission of prequalification applications. There
shall be no limits on the number of bidders to be prequalified, and all firms found capable of
performing the work satisfactorily in accordance with the approved prequalification criteria shall
be prequalified and invited to submit bids. As soon as prequalification is completed, the bidding
documents shall be made available to the prequalified prospective bidders.
13. Bidding Procedures – ADB has adopted four bidding procedures from which the EA
may select to suit the procurement: single-stage, one-envelope; single-stage, two-envelope;
two-stage, two-envelope; and two-stage biddings. Choosing the appropriate bidding procedure
will depend on the complexity of the contract and the circumstances surrounding procurement.
1. Single-Stage, One-Envelope Bidding Procedure

(this is the main bidding procedure and is used in most procurement financed by ADB)
14. For this procedure, bidders submit the price proposal and the technical proposal in one
envelope. These envelopes are opened in public on the date and at the time designated in the
bidding documents. The bids are evaluated, and following ADB approval, the contract is
awarded to the bidder who submitted the lowest evaluated substantially responsive bid.
2. Single-Stage, Two-Envelope Bidding Procedure

(allows the bids to be evaluated initially on purely technical and commercial grounds without reference to
price)
15. Bidders submit two sealed envelopes simultaneously, one containing the technical
proposal and the other the price proposal.
Initially, only the technical proposals are opened on the date and at the time
advised in the bidding documents. The price proposals remain sealed and are
held in custody by the EA. The technical proposals are evaluated by the EA and
cannot be amended or changed. The objective is to allow the EA to evaluate the
technical proposals without referring to price. Bids that do not conform to the
specified requirements may be rejected, with ADB’s approval, as deficient bids.
Following ADB’s approval of the technical evaluation, and on the date and at the
time advised by the EA, the price proposals of the technically responsive bidders
43
are opened in public. The price proposals of the technically responsive bidders
are evaluated, and following approval by ADB, the contract is awarded to the
bidder who submitted the lowest evaluated substantially responsive bid.
2. Two-Stage, Two-Envelope Bidding Procedure

( for large and complex contracts and for procurement where alternative technical proposals are possible,
such as for certain types of machinery, equipment or manufacturing plant)
16. Bidders submit two sealed envelopes simultaneously, one containing the technical
proposal and the other the price proposal
Initially, only the technical proposals are opened on the date and at the time
advised in the bidding documents. The price proposals remain sealed and are
held in custody by the EA. The technical proposals are evaluated, and if the EA
requires any amendments or changes they are discussed with the bidders, and
all bidders are advised in writing by the EA of the changes required. The
objective is to ensure that all technical proposals conform to the same acceptable
technical standard and meet the EA's technical requirements. Bids of bidders
who are unable or not prepared to amend their technical bids to conform to the
final technical standard required by the EA may be rejected, with ADB approval,
as deficient bids
Following ADB’s approval of the evaluation of technical proposals (where prior

review and approval is applied), the bidders who meet the qualifying criteria are
invited to submit revised technical proposals and supplementary price proposals.
The supplementary price proposals must only contain changes in price resulting
from changes in the technical proposals. Supplementary price proposals that
contain changes other than those discussed during technical evaluation may
result in rejection of the bids.
The original and supplementary price proposals, and the revised technical
proposals, are opened in public on the date and at the time advised by the EA.
They are evaluated, and following ADB approval, the contract is awarded to the
bidder who submitted the lowest evaluated substantially responsive bid.
3. Two-Stage Bidding Procedure
(for large and complex contracts where technically unequal proposals are likely to be
encountered)
17. Bidders first submit their technical proposals, in accordance with the specifications, but
without prices:
The technical proposals are opened on the date and at the time advised in the
bidding documents. The EA evaluates the technical proposals and discusses
them with the bidders. Any deficiencies, extraneous provisions, and
unsatisfactory technical features are discussed with the bidders, and all bidders
are advised in writing by the EA of the changes required. The bidders who meet
the qualification criteria are invited to revise or adjust their technical proposals to
meet the EA's technical requirements. The objective is to ensure that all technical
proposals conform to the same acceptable technical standard and meet the EA's
technical requirements. Bids of bidders who are unable or not prepared to amend
44
their technical bids to conform to the technical standard required by the EA may
be rejected, with ADB approval, as deficient bids.
After ADB approves the evaluation of technical proposals, the second stage is to
invite bidders who meet the qualification criteria to submit revised technical
proposals and price proposals that are opened in public on a date and time
designated by the EA. In setting the date, the EA is to allow time for bidders to
prepare revised technical proposals and price proposals. The revised technical
proposals and price proposals are evaluated and, following ADB’s approval, the
contract is awarded to the lowest evaluated substantially responsive bidder.
18. Invitation for Bids and Bidding Documents - Three copies of the Invitation for Bids
(IFB) and all related bidding documents for ICB (including instruction to bidders, conditions of
contract, specifications and bid forms) must be submitted to ADB for approval. The documents
much reach ADB at least 21 days prior to the proposed date for issuing bidding
documents to allow sufficient time for review and approval, and to allow time for a specific
notice to be published on adb.org.
19. Issuing the Invitations for Bids – As soon as the IFB is advertised in accordance with
the Procurement Guidelines, ADB is to be provided a report on such advertisement. The report
must include: the name of the web site or newspaper in which the IFB was advertised, date of
advertisement, and copy of the published advertisement.
20. For ICB, IFBs require a minimum bidding period of 6 weeks. This period is counted
from the publication date of the relevant invitation in the Business Opportunities section of
adb.org, or locally in English, or the date when documents are available for issue, whichever is
the latest, up to the date for submission of bids. The date, hour, and place for the latest delivery
of the bids are to be clearly stipulated in the IFB, as well as the manner for submitting such bids.
Besides allowing for submission in person, delivery of bids by registered mail or electronically
will similarly be acceptable and stated in the IFB.
21. Opening of Bids – Bids delivered after the deadline for submission are to be returned
unopened. Bids must be opened in public on the date and at the time and place stipulated in
the documents. The name of each bidder and the total amount of its bid, discounts, bid security
(if required), and other important information are to be read aloud and recorded. All these
information are to be included in the record of the opening of bids, together with the names of
the representatives present.
22. Examination and Evaluation of Bids - Must be consistent with the method, terms and
conditions of the bid documents and follow the procedures set out in the Procurement
Guidelines.
23. Conditions of Contract – General conditions of contract are provided in the Standard
Bidding Documents (SBD). Terms and conditions specific to the bidding are specified in the
bidding documents. The Procurement Guidelines include provisions related to currency of
payment, terms and method of payment, price adjustment, performance security, liquidated
damages, language, transportation and insurance and dispute resolution, force majeure,
applicable law and settlement of disputes. These provisions should be reviewed when
developing specific conditions of contract.
24. The EA may also note the following for guidance:

45
 Performance security is required for works contracts and, in some

circumstances, for supply of goods. Requirements for performance security and
are to be described in the bidding documents. Its form shall be either cash, or a
bank guarantee. It must be issued by a reputable bank or financial institution. If
the issuer is located outside the borrower’s country, it must have a correspondent
in the borrower’s country to insure enforceability. Performance security would
normally be about 10% of the contract value.
 Liquidated damages are to be specified in the bidding documents. Normally,
liquidated damages will be limited to about 10% of the contract value.
 Price adjustment provisions must be provided in contracts with delivery or

completion periods that exceed 18 months. They are not required for simple
supply contracts with short delivery periods. The method and formula for price
adjustment is specified by the EA and provided in the bidding documents. The
formula indices will be given by the EA and the bidder, depending on the source
(for example, some indices might reflect costs in the bidder’s home country, in
which case they would be specified by the bidder as provided for in the bidding
documents).
25. Proposal for Award – Where prior review is applied, as soon as the bids are evaluated
and the EA has determined the lowest evaluated bid, the evaluation results and the proposal for
award of contract are to be submitted to ADB for review and approval. The recommendation
must be approved by ADB before a contract is awarded or a letter of intent is issued. For this,
promptly after the bid evaluation but at least 30 days prior to expiration of bid validity, ADB
must be given three copies of:
 an account of the public opening of the bids (together with the minutes of bid
opening),
 a summary and detailed evaluation of the bids,
 the proposal for award (together with the consultants' recommendations, where
applicable),
 a draft contract if such a draft differs from the draft previously approved by ADB, and
 an appropriate certificate of eligibility for the proposed contract.
26. For single-stage (two-envelope), two-stage (two-envelope), and two-stage bidding

procedures, ADB's approval of the evaluation results of each envelope are to be obtained
before the results are communicated to the bidders and prior to opening the second envelope or
proceeding to the second stage.
27. Award of Contract - Where prior review is used, if the contract proposed to be executed
differs substantially from the draft approved by ADB or if any substantial amendment to the
contract is proposed, the proposed changes are to be submitted to ADB for prior approval.
Promptly after each contract is awarded, ADB is to be given three copies of the contract as
executed. Where post review is used, ADB will check the contract as executed for substantive
amendments to the recommendation of the evaluation and award process.
28. Modifications to contracts, will require ADB prior approval. Change orders that increase
the original contract amount by more than 15% in aggregate require prior approval. Material
extensions in time, and modifications or waivers of conditions of contract similarly require prior
approval of ADB. In all cases, contract amendments must be submitted to ADB for its records.
46
(b) Shopping
29. Shopping is a procurement method based on comparing price quotations obtained from
several suppliers (in the case of goods) or from several contractors (in the case of civil works),
with a minimum of three, to assure competitive prices, and is an appropriate method for
procuring readily available off-the-shelf goods or standard specification commodities of small
value, or simple civil works of small value.
30. Requests for quotations shall indicate the description and quantity of the goods or
specification of works, as well as desired delivery (or completion) time and place. Quotations
may be submitted by letter, facsimile or by electronic means. The evaluation of quotations shall
follow the same principles as of open bidding. The terms of the accepted offer shall be
incorporated in a purchase order or brief contract.
47
RRP, Appendix 9
PROCUREMENT PLAN AND CONTRACT PACKAGES

Table A9.1: Procurement Plan
Project Information A. Core Subprojects

1. Hospital Feeder Upgrading Project – Stage 1
2. Single- and Three-phase Prepayment Metering Project
B. Candidate Subprojects
1. Upolu
a. Generation
(i) Tanugamanono Power Station noise and emission control
program
(ii) Refurbishment of Alaoa hydropower station
(iii) Upolu diesel power station project
b. Transmission
(i) Upgrade of the Alaoa 6.6 kV transmission line to 22 kV
project
(ii) Upolu diesel power station to Fuluasou Substation 22 kV
underground cable project
(iii) Hospital Feeder upgrading project - Stage 2
(iv) 22 kV Fuluasou Substation project
(v) Low voltage network expansion program
(vi) Fuluasou Substation to Apia Wharf area 22 kV
(vii) Fuluasou Substation to Laulumauga via Vaigaga 22 kV
(viii) 22 kV overhead conductor upgrading program
2. Savai'i
a. Generation
(i) Hydropower scheme
b. Transmission
(i) Puapua–Asau transmission line 22 kV reconductoring
project
(ii) Power factor improvement program
(iii) Low voltage network expansion program
3. Measurement Equipment
Supply of high voltage/current and stream-flow gauging
equipment
4. System Control and Data Acquisition (SCADA)
Supply, installation, and operation of SCADA system
Country Independent State of Samoa
Name of Borrower Government of Samoa
Project Name Samoa Power Sector Expansion Project
Loan Reference
Date of Effectiveness
Amount $ $80 million
Of which Committed, $
Executing Agency Electric Power Corporation
Approval Date of Original Procurement Plan
Approval of most recent Procurement Plan
Publication for Local Advertisements
Period Covered by this Plan January 2008 to December 2015
kV = kilovolt, MW = megawatt, SCADA = system control and data acquisition.
Sources: Asian Development Bank and Electric Power Corporation.
48
Table A9.2: Procurement Thresholds, Goods and Related Services,

Works, and Supply and Install
ICB Works $100,000 (minimum)a
ICB Goods $500,000 (upper limit)
Shopping $100,000 (upper limit)
ICB = international competitive bidding.
a
National competitive bidding is not feasible due to the lack of local contractors and suppliers, and the small size of
Samoa.
Table A9.3: Procurement Thresholds, Consultants Services

Quality- and Cost-Based Selection (QCBS), Full Technical Proposal, $1,000,000 or greater
quality-cost ratio for evaluation of proposals to be 80:20.
Table A9.4: Indicative List of Contract Packages

Goods, Works, and Consulting Services
Estimated Procurement Expected Date Prior

Location Contract Description Costa Method of Review
($ million) Advertisement (Y/N)
Core Subprojects
Upolu Hospital Feeder Upgrading 1.09 ICB Oct 2007 Y
Project – Stage 1 (W-DSI)b
Upolu / Single- and Three-phase 6.07 ICB Oct 2007 Y
Savai'i Prepayment Metering (W-SIM)c
Upolu Project manager 0.75 Individual Jun 2007 Y
Selection
Upolu Project implementation 2.86 QCBS Aug 2007 Y
consultants
Candidate Subprojects
Upolu Tanugamanono Power Station 0.87 ICB May 2008 Y
noise and emission control
program (W-DSI)b
Upolu Refurbishment of Alaoa 1.40 ICB Sep 2008 Y
hydropower station (W-SI)
Upolu Upolu diesel power station 31.77 ICB Oct 2009 Y
inclusive of plant and control
equipment (W-DSI)c
Upolu Upgrade of the Alaoa 6.6 kV 1.14 ICB Jul 2009 Y
transmission line to 22 kV project
(W-SI)
Upolu Upolu diesel power station to 1.49 ICB Apr 2009 Y
Fuluasou Substation 22 kV
(W-DSI)b
Upolu Hospital Feeder upgrading 6.35 ICB Oct 2009 Y
project – Stage 2 (W-DSI)b
Upolu 22 kV Fuluasou Substation 1.40 ICB Nov 2009 Y
project inclusive of equipment
(W-DSI)b
49
Estimated Procurement Expected Date Prior

Location Contract Description Costa Method of Review
($ million) Advertisement (Y/N)
Upolu Low voltage network expansion 0.29 ICB Goods Oct 2008 Y
program (G)
Upolu Fuluasou Substation to Apia 1.97 ICB Jan 2012 Y
Wharf area 22 kV underground
cable project (W-DSI)b
Upolu Fuluasou Substation to 4.20 ICB Jan 2012 Y
Laulumauga via Vaigaga 22 kV
(W-DSI)b
Upolu 22 kV overhead conductor 3.17 ICB Goods Mar 2008 Y
upgrading program (G)
Savai'i Hydropower scheme (DSI)b 11.21 ICB Jan 2013 Y
Savai'i Puapua–Asau transmission line 1.24 ICB Aug 2008 Y
22 kV reconductoring project (G)
Savai'i Power factor improvement 0.25 ICB Goods Aug 2008 Y
program (G)
Savai'i Low voltage network expansion 2.56 ICB Goods Sep 2008 Y
program (G)
Upolu / Measurement equipment - 0.06 Shopping Mar 2008 N
Savai'i electric high voltage/current (G)
Measurement equipment - 0.05 Shopping Mar 2008 N
stream-flow gauging (G)
Upolu / SCADA (DSIO)e 2.48 ICB Sep 2008 Y
Savai'i
DSI = design, supply, install, and operate; DSIO = works - design, supply, install, and operate; EPC = Electric Power
Corporation, G = goods supply; ICB = international competitive bidding; kV = kilovolt; QCBS = quality- and cost-based
system, SCADA = system control and data acquisition; W-DSI = works contract, design; W-SIM = supply, install, and
maintain; W-SI = supply and install.
a
Exclusive of taxes, duties, and price contingencies.
b
A single-stage, two-envelope procedure will be used. Separate envelopes for technical and financial proposals will be
submitted simultaneously. Bids will be evaluated using an 80:20 technical/financial weighting.
c
EPC will prequalify bidders in accordance with ADB’s Procurement Guidelines (2007, as amended from time to time).
Bidding for the Upolu diesel power station, inclusive of plant and control equipment, will be limited to prequalified
bidders.
d
Contract to cover supply, installation, and maintenance of prepayment meters until 31 December 2014.
e
Contract to cover operation, maintenance, and upgrading of SCADA system until 31 December 2015.
Sources: Asian Development Bank and Electric Power Corporation.
50
Procurement under International Competitive Bidding
(with no prequalification)
Suppliers/
Executing Agency ADB Contractors
Loan/advance contracting
approved
Finalize list of goods/
works to bid (from
procurement plan)
ADB review and
a
Approval
Prepare draft invitation
for bids and bidding
documents
a
ADB review and approval
Advertise invitation for
Advertise invitation for bids bids in www.adb
Locally in English
and issue bidding
documents; inform ADB
of the advertisement; Purchase bidding
(minimum bidding period documents from EA
6 weeks) and submit bid
Public opening of bids

Prepare record of public
opening of bids
Evaluate bids and ADB review and

a
recommend contract Approval
award
Prepare contract Sign contract agreement

agreement and send and return to EA
to supplier Provide performance
Security (if required)
Send 3 copies of signed
contract to ADB
Signed contract received Deliver the goods and
Prepare PCSS for payment related services and
purposes works to the EA
Goods inspected and
received
Payment received (from
supplier’s bank under
L/C procedures)
a
Approval not required under post review
51
Procurement under International Competitive Bidding

(with prequalification)
Suppliers/
Executing Agency ADB Contractors
Review list of goods or Loan or advance contracting

works to bid (from procurement plan) approved
a
ADB review and approval
Prepare draft PQ documents
a
and draft bidding documents b ADB review and approval
Advertise the invitation for PQ in
www.adb
Advertise in locally in English
and issue the PQ documents; submit
to ADB a report on advertising
(minimum 6 week period given for Purchase PQ documents from EA
submission of PQ applications) and submit PQ application
PQ applications received
Evaluate PQ applications
ADB review and approval a
Recommend prequalified firms
EA Notifies prequalified and

ADB approval received
disqualified firms
Issue bidding documents to

Purchase bidding documents
prequalified firms
from EA and submit bid
(minimum bidding period 6 weeks)
Public bid opening

Prepare record of public bid
Opening
Evaluate bids and recommend

ADB review and approval a
contract award
Sign contract agreement and
Prepare contract agreement return to EA,
and send to supplier Provide performance security
Send 3 copies of signed contract

to ADB
Review signed contract;
Contract implementation
Prepare PCSS for payment purposes
a
Approval not required under post review
b
The draft bidding documents can be prepared at a later stage provided that ADB approval is obtained before issuance o
bidding documents to prequalified firms.
52
LIST OF ADB MEMBER COUNTRIES
1 AFG Afghanistan 36 MYA Myanmar

2 ARM Armenia, 37 NAU Nauru, Republic of
3 AUS Australia 38 NEP Nepal
4 AUT Austria 39 NET Netherlands
5 AZE Azerbaijan 40 NZL New Zealand
6 BAN Bangladesh 41 NOR Norway
7 BEL Belgium 42 PAK Pakistan
8 BHU Bhutan 43 PAL Palau
9 BND Brunei Darussalam 44 PNG Papua New Guinea
10 CAM Cambodia 45 PHI Philippines
11 CAN Canada 46 POR Portugal
12 PRC China, People’s Republic of 47 SAM Samoa
13 COO Cook Islands 48 SIN Singapore
14 DEN Denmark 49 SOL Solomon Islands
15 FIJ Fiji Islands, Republic of 50 SPA Spain
16 FIN Finland 51 SRI Sri Lanka
17 FRA France 52 SWE Sweden
18 GER Germany 53 SWI Switzerland
19 HKG Hong Kong, China 54 TAP Taipei,China
20 IND India 55 TAJ Tajikistan, Republic of
21 INO Indonesia 56 THA Thailand
22 IEP Ireland 57 TIM Timor-Leste, Democratic
Republic of
23 ITA Italy 58 TON Tonga
24 JPN Japan 59 TUR Turkey
25 KAZ Kazakhstan 60 TKM Turkmenistan, Republic of
26 KIR Kiribati 61 TUV Tuvalu
27 KOR Korea, Republic of 62 UKG United Kingdom
28 KGZ Kyrgyz Republic 63 USA United States of America
29 LAO Lao People’s Democratic 64 UZB Uzbekistan
Republic
30 LUX Luxembourg 65 VAN Vanuatu
31 MAL Malaysia 66 VIE Viet Nam
32 MLD Maldives
33 RMI Marshall Islands
34 FSM Micronesia, Federated
States of
35 MON Mongolia
53
Revised Investment Plan – 6 July 2009
Estimated
Cost Procurement
Location Contract Description ($ million) Method
1. Upolu Hospital Feeder Upgrading Project – Stage 1 0.25 ICB Goods
0.35 NCB Works
2. Upolu and Savaii Single- and three-phase Prepayment Metering 6.07 ICB
3. Upolu Project Manager 0.75 Individual Selection
4. Upolu Project Implementation Consultants 2.67 QCBS
5. Upolu Tanugamanono Power Station noise and emission 0.17 ICB Goods
control program
6. Upolu Refurbishment of Alaoa hydropower station 1.34 ICB
7. Upolu Fiaga diesel power station 19.00 ICB
8. Upolu Upgrade of the Alaoa 6.6kV distribution line 0.65 ICB Goods
0.49 NCB Works
9. Upolu Fiaga diesel power station to Tanugamanono 33kV 8.83 ICB
underground project and Fuluasou Substation
10. Upolu Hospital Feeder upgrading project – Stage 2 0.96 ICB Goods
0.67 Works
11. Upolu and Savaii Low voltage network improvement program 1.29 ICB Goods
12. Upolu 22kV overhead conductor upgrading program 6.03 ICB Goods
NCB Works
13. Savaii Hydropower scheme 10.65 ICB
14. Savaii Puapua-Asau transmission line 22kV reconductoring 0.44 ICB Goods
project
0.80 NCB Works
15. Upolu and Savaii Measurement equipment electric high voltage/current 0.06 Shopping
16. Upolu and Savaii Measurement equipment stream-flow gauging 0.05 Shopping
17. Upolu and Savaii SCADA 3.48 ICB
18. Savaii Refurbishment of Salelolonga Diesel Power Station 5.90 ICB
19. Upolu Vending System 0.25 Direct Contract
20. Upolu Public Dissemination 0.10 Single Source
21. Upolu Taelefaga and Samasoni Switchgears 1.60 ICB
22. Upolu Power System Planning Software 0.06 Shopping

23. Upolu Refurbishment of Tanugamanono Diesel Generators 0.75 ICB
24. Upolu Vaipu Pump Scheme 0.50 ICB
25. Upolu Upolu Hydro 3.51 ICB
54
9. DISBURSEMENT
A. Basic Principles
1. All disbursements of loan funds will be made in accordance with the ADB’s Loan
Disbursement Handbook (January 2007 as amended from time to time), a copy of which was
provided to the Grant Recipient and EA. The Handbook is also available electronically in the
Loan and Grant Financial Information Web Services (http://lfis.adb.org). Users are advised to
visit the site regularly to ensure they have the latest version of the Handbook.
2. The three main principles of disbursement for development projects are as follows:
(i) proceeds of loans or any other financing provided by ADB shall be used only for
the procurement in member countries of goods and services produced in
member countries unless specifically permitted by its Board of Directors;
(ii) the Grant Recipient shall be permitted by the ADB to draw its funds only to meet
expenditures in connection with the project as they are actually incurred; and
(iii) the proceeds of any loan made, guaranteed, or participated by the ADB are used
only for the purposes for which the loan was granted, and with due attention to
consideration of economy and efficiency.
3. The goods and services and other items of expenditures to be financed out of the
proceeds of the Loan and the Grant and the respective allocation of amounts of the Loan and
the Grant among different categories of such goods and services and other items of
expenditures shall be in accordance with the provisions of Schedule 3A below (Loan) and
Schedule 3B (Grant) of the Financing Agreement. Such Schedules may be amended from time
to time by agreement between the Beneficiary and ADB.
Table 3A: Allocation and Withdrawal of LOAN Proceeds

55
Table 3B: Allocation and Withdrawal of GRANT Proceeds
4. Withdrawals from the Loan Account and the Grant account in respect of goods and
services shall be made only on account of expenditures relating to:
(a) goods which are produced in and supplied from and services which are supplied
from such member countries of ADB as shall have been specified by ADB from time to time as
eligible sources for procurement, and
(b) goods and services which meet such other eligibility requirements as shall have
been specified by ADB from time to time.
B. Conditions for Withdrawal from Grant Account
5. As stipulated in the Grant Agreement, no withdrawals shall be made from the Grant
Account until:
(i) The Government of Australia Grant shall have been transferred to an account at
ADB and be available for the Project;
(ii) Prior to the commencement of civil works for any Subproject facility: (i) the
Planning and Urban Management Agency of the Ministry of Natural Resources
and Environment shall have approved the application for development consent of
the preliminary environmental assessment report (PEAR) for any Subproject
facility; and (ii) ADB shall have approved the initial environmental examination
(IEE) for any such Subproject facility; and
(iii) Notwithstanding any other provision of the Financing Agreement, no withdrawals
shall be made from the Loan Account for the Vaita’i Hydropower Subproject until
the Beneficiary shall have entered into a legally binding agreement, or obtained a
court order, for the compensation of the relevant customary landowners for the
acquisition of the requisite land for the Subproject, in the event where the Vaita’i
Hydropower Subproject is selected as a Subproject. Such agreement shall
9Disbursement
56
include terms and conditions with respect to the 20 meter-wide road reserve
required to accommodate the existing access road from Sili Village to the Vaita’i
Hydropower Subproject site, inclusive of shoulders and table drains.
C. Retroactive Financing
6. Withdrawals from the Loan/Grant account may be made for reimbursement of

reasonable expenditures incurred under the Project before the Effective Date, but not earlier
than twelve (12) months before the date of the Financing Agreement in connection with items to
be retroactively financed, subject to a maximum amount equivalent to 20 per cent of the
Loan/Grant.
D. Disbursement Procedures
7. The proceeds from the ADF loan, the ADF grant, the JBIC loan, and the grant provided
by the Government of Australia for the proposed Project will be disbursed in accordance with
ADB’s Loan Disbursement Handbook (2007, as amended from time to time). The Government
will submit separate withdrawal applications for the ADF loan, ADF grant, JBIC loan, and the
Government of Australia grant. To promote efficiency in processing disbursements from four
different sources under the Project, a minimum value per withdrawal application is set at
$100,000 equivalent or an amount determined to be a reasonable minimum. 1 Reimbursement
and direct payment procedures will apply for consulting services, civil works, and equipment
supply and installation. Reimbursement procedures will apply to land acquisition and
resettlement. The disbursement and funding arrangements is in RRP, Appendix 10, appended
at the end of this Section.
E. Withdrawal Applications (W/A)
(Samples of WA forms are at the end of this Section; editable worksheets are being
provided separately to the EA/IA)
8. For all withdrawals, ADB must receive a original W/A in the prescribed format. A W/A is
a written request from the Grant Recipient to ADB to pay funds against the Grant Recipient’s
grant account. A W/A consists of: (i) an application itself, in letter form; (ii) summary sheets for
each category claimed or relevant original SOE form, where applicable; and (iii) supporting
documents, if required 2 . The Grant Recipient’s duly authorized representative signs each W/A.
9. W/As, summary sheets and items listed on every summary sheet should be
consecutively numbered. A sample “Master List of Withdrawal Application” form is provided at
the end of this Section. The complete name, address and account number of the beneficiary
bank should be indicated. In case the beneficiary bank is not located in the country of the
requested currency of payment, the complete name and address of its correspondent bank
operating in that country must be indicated.
10. Currency of Payment. In principle, payment is made in the currency in which the cost of
goods and services has been paid or is payable. For expenditures incurred in the Grant
Recipient’s currency (local currency), the amount requested in the W/A must be in local
currency. A separate W/A is required for each currency. However, the monitoring of the
expenditures will continue to be in US dollars, which is the currency of the Grant.
1
The minimum value per withdrawal for consulting services is set at $30,000 equivalent or an amount determined to
be a reasonable minimum.
2
For the SOE form, the supporting documents are retained in EA office for audit review and should not be submitted
to ADB. If payment is exceeding SOE ceiling of US$50,000, the supporting documents should be submitted.
57
11. Other Instructions. The signed original copy of the WA is submitted to ADB. The
accompanying summary sheet should be signed by the Grant Recipient’s authorized
representative and/or project official. Supporting documents may be submitted as photocopies.
Alterations on the application forms are initialed by the Grant Recipient’s authorized
representative. The minimum value per withdrawal application is US$50,000 unless otherwise
approved by ADB. The Grant Recipient is to consolidate claims to meet this limit for
reimbursement and imprest fund.
12. Procurement Contract Summary Sheets (PCSS). The PCSS number is assigned by
ADB for identifying a particular contract approved by the Grant Recipient and submitted to ADB.
It is advisable for the EA to provide a contract number for each approved contract to facilitate
monitoring of payments. The PCSS includes: (i) ADB contract number; (ii) date of contract
approval; (iii) mode of procurement; (iv) name of contractor or supplier; (v) terms of payment
and currency of contract; and (vi) percentage of ADB financing. The PCSS number is shown
on the summary sheet. To obtain the number, refer to ADB’s monthly report named List of
Contract by Executing Agency, which is available in the LFIS website.
13. On receipt of the W/A, the Bank’s Controller’s Department reviews the adequacy of
documentation in consultation, where necessary, with the department responsible for project
administration (in this case the ADB’s Pacific Operations Division). On approval of disbursement
by the Controller’s Department, the payment is made by the Treasurer’s Department. The Grant
Recipient and EA can monitor status of individual WA, total disbursements under loan and
individual contracts, capitalization and other loan information in the regular report of Controller’s
Department posted on LFIS/GFIS website (htpp://lfis.adb.org). To obtain the access to the
website, a request form (Appendix 47 of the Loan Disbursement Handbook) must be filled out
and signed by authorized representative of the Grant Recipient (same person, who is authorized
to sign WAs) and submitted to ADB. Upon receipt of the application, ADB will email the
confidential user id and password to the requested user.
F. Modes of Loan Disbursement
14. As mentioned earlier, under the project, only the following disbursement procedures will
be used: Reimbursement and direct payment procedures will apply for consulting services, civil
works, and equipment supply and installation. Reimbursement procedures will apply to land
acquisition and resettlement.
1. Direct Payment Procedure
15. Under the direct payment procedure, the Bank makes payment directly to the supplier,
contractor, or consultant, on the basis of a withdrawal application submitted by the Loan/Grant
Recipient.
16. Basic Requirements. A signed W/A must be submitted to ADB together with a
summary sheet (form ADB-DRP-SS, Appendix 8 of LDH) and the required supporting
documents. A separate W/A is required for each different currency.
17. Supporting Documents. The following supporting documents must be submitted to

ADB together with the W/A. All cases require a contract or confirmed purchase order (PO),
if not submitted earlier to ADB, indicating the amount and due date.
9Disbursement
58
(i) For payment of consultant’s services, the supporting documents are: (i) signed contract,
consultant’s claim or invoice, and (iii) summary for out-of-pocket expenses claimed.
(ii) Payment for civil works requires the claim or invoice from the contractor and a summary
of work progress certified by the project engineer and approved by the Grant Recipient’s
authorized representative.
(iii) Payment for goods and equipment requires the supplier’s invoice specifying the goods,
quantities, and prices as well as, transport documents, i.e., airway bill, bill of lading, or other
similar documents.
For complete details, see Section 7 of the Handbook.
2. Reimbursement Procedure
18. The reimbursement procedure is one whereby ADB pays from the loan/grant account to
the Grant Recipient’s account, or in some cases, to the Project account for eligible expenditures
which have been incurred and paid for by the Grant Recipient or EA out of its budget allocation
or its own resources.
19. Under this procedure, ADB’s payments are made only to the Grant Recipient or EA and
not to a third party (e.g., supplier, contractor, etc.)
20. This procedure normally requires submission of full supporting documentation or if

approved in the Grant agreement, the SOE procedure could be used for the reimbursement of
the expenditures, which are within SOE ceiling, as specified in para.8 above.
21. Basic Requirements. A signed W/A must be submitted to ADB together with a
summary sheet (Appendix 8 of LDH), and the required supporting documents .
22. A separate WA must be submitted for each currency. A separate summary sheet must
also be submitted for each loan category or subcategory grouping items claimed by contract
number.
23. The expenditures should have been incurred and paid for by the Grant Recipient out of
its own fund sources.
24. Supporting Documents. The supporting documents are the same as in direct payment
procedure, but the evidence of payment by the Grant Recipient or EA showing the amount paid,
date of receipt and payee should be attached. If supporting documents are written in local
language, there should be an English translation of important words/items in the documents
(e.g. the title of the document, name of supplier/contractor, description of goods and services,
amounts and dates).
25. Reimbursement Process for Land Acquisition and Resettlement. In addition to the
WA, a copy of the relevant inventory of losses identifying: (i) the affected persons, and where
applicable, the matai representing the affected person; (ii) the nature of the losses incurred by
the affected person; and (iii) evidence of the agreed compensation to the affected person in the
form of cancelled check, or a receipt signed by the affected person or, by the matai representing
the affected persons as identified in the inventory.
Complete details are at Section 9 of the Handbook.

59
G. Common Causes of Delays in Loan Disbursement
26. The most common causes of delays in processing withdrawal applications are:
 Lack of authorization for signatories

 Incomplete/incorrect payment instructions
 Incomplete supporting documents
 Non-compliance with procurement procedures
 Inconsistencies in terms and/or currencies of payment
 Inclusion of ineligible items
 Non-submission of sign contract documents and subsequent variations
 Withdrawal Application and Summary Sheet are not original.
H. Contract Awards and Disbursement Projections
27. In order to effectively monitor project implementation, EA/IAs are requested to prepare
accurate projections of contract awards, commitments and disbursements. Projections are to be
compared with actual achievements which will help identify impediments to implementation
progress and provide remedial measures. Accurate projections help ADB in planning its own
cash flow and portfolio management. Projections worksheet QP-10 (copy attached) are given to
EAs to complete and return to ADB at the start of each year.
I. Disbursement Reports
28. Grant Recipients and EAs are given loan information in the following regular reports.
These reports and other information are available online at the LFIS/GFIS website at
http://lfis.adb.org.
(i). Semi-Monthly Listing of Grant Disbursements (GRP 967). This

chronological listing provides information on grant disbursement
transactions and status of withdrawal applications under a given
loan/grant every 15 days. The listing is available only if there are
disbursements during the reporting period.
(ii) Disbursement Ratio
J. Loan/Grant Closing Date
29. The loan/grant closing date is the last date for the Recipient to make withdrawals from
the loan/grant account. Action is taken by the Bank to close the account in consultation with the
Recipient when the Bank is satisfied that no further disbursements are likely to occur.
Expenditures incurred after the closing date will not be financed under the Loan/Grant.
30. The loan/grant account is closed after the Bank notifies the Recipient of the closure of
the account, cancels the unutilized loan balance and adjusts any unliquidated advances. For
purposes of this grant, the closing date for withdrawals from the grant Account shall be 31
December 2016 or such other dates as may from time to time be agreed between the Grant
Recipient and the Bank.
1. Extension of Grant Closing Date
9Disbursement
60
31. Closing dates may be extended in justifiable cases and after ensuring that adequate
arrangements exist for completing the project within the extended timeframe. When extension of
the grant closing date is necessary, the Recipient submits a request to ADB, or in the absence
of such a request, the projects division, in this case, Pacific Operations Division (PAHQ),
proposes a revised closing date to the Recipient and ask the Recipient to confirm the proposal.
Upon receipt of confirmation from the Grant Recipient, the proposal is submitted for approval of
appropriate authority in the ADB.
32. When extension of the grant closing date is not justified or considered not necessary,
ADB may allow up to three months after the grant closing date for the Grant Recipient’s W/A to
reach ADB or for the Grant Recipient to liquidate fully all expenditures incurred before the grant
closing date, or refund any outstanding imprest account balances.
K. Reallocation of Loan Proceeds
33. The proceeds of the Loan will be used only for the purposes for which the Loan was
approved. The ADB allows a reallocation of proceeds if: (a) the amount of the Loan allocated to
any Category appears to be insufficient to finance all agreed expenditures in that Category. The
Bank may, by notice to the Recipient, (i) reallocate to such Category, to the extent required to
meet the estimated shortfall, amounts of the Grant which have been allocated to another
Category but, in the opinion of the ADB, are not needed to meet other expenditures, and (ii) if
such reallocation cannot fully meet the estimated shortfall, reduce the withdrawal percentage
applicable to such expenditures in order that further withdrawals under such Category may
continue until all expenditures shall have been made; and (b) the amount of the Loan then
allocated to any Category appears to exceed all agreed expenditures in that Category.
61
RRP, Appendix 10
DISBURSEMENT AND FUNDING ARRANGEMENTS
Introduction
1. The proceeds from the Asian Development Bank (ADB) loan and grant, the Japan Bank
for International Cooperation (JBIC) loan, and the grant provided by the Government of
Australia for the proposed Project will be disbursed in accordance with ADB’s Loan
Disbursement Handbook (2007, as amended from time to time). The Government will submit
separate withdrawal applications for the Asian Development Fund (ADF) loan, the ADF grant,
the JBIC loan, and the Government of Australia grant. To promote efficiency in processing
disbursements from four different sources under the Project, a minimum value per withdrawal
application is set at $100,000 equivalent or an amount determined to be a reasonable
minimum. 3 Reimbursement and direct payment procedures will apply for consulting services,
civil works, and equipment supply and installation. Reimbursement procedures will apply to land
acquisition and resettlement.
ADB Loan and Grant
2. ADB loan proceeds will be utilized to finance civil works (48% of financing) and
equipment supply and installation (31% of financing). ADB grant proceeds will be utilized for
consulting services and equipment supply and installation. For consulting services, the financing
percentage of 95% will be applied to individual claims. The total financing of ADB grant
proceeds under the category of equipment supply and installation represents 13.7%. The
financing percentages that provide the basis for withdrawal for the ADB grant for equipment
supply and installation will apply on an annual basis in accordance with Table A10.1. 4
Reallocation of the ADB loan and grant proceeds among categories can be made in accordance
with ADB established procedures.
Table A10.1: Annual Financing Percentages for the ADB Granta
Year Equipment Supply and Installation Consulting Services

(% of Base Cost) (% of Base Cost)
FY2008 7 95
FY2009 7 95
FY2010 7 95
FY2011 7 95
FY2012 7 95
FY2013 22 95
FY2014 22 95
FY2015 22 95
ADB = Asian Development Bank, FY = fiscal year.
a
For disbursement purposes, the financing percentages have been rounded as compared to Appendix 6,
Table A6.2: Detailed Cost Estimates by Financier.
Source: ADB estimates.
3
The minimum value per withdrawal application for consulting services is set at $30,000 equivalent or an amount
determined to be a reasonable minimum.
4
For FY2008–FY2012, financing percentage will be 7% and 22% thereafter due to front loading of the Government
of Australia grant proceeds for this specific category.
9Disbursement
62
Japan Bank for International Cooperation Loan
3. The JBIC loan will be utilized for civil works (42% of financing) and equipment supply
and installation (47% of financing), as detailed in Appendix 6 (Table A6.2). Disbursements for
the JBIC loan will be administered by ADB. Two withdrawal applications, signed by the
authorized signatory of the Government, together with relevant supporting documents, will be
submitted to ADB and JBIC simultaneously. Direct payment and reimbursement procedures will
be applied in accordance with the Loan Disbursement Handbook. ADB and JBIC may
reasonably request additional information or documentation related to disbursements under the
Project. Reallocation of the JBIC loan proceeds can be done among cost categories in
accordance with ADB established procedures, subject to prior approval of JBIC.
Government of Australia Grant
4. The Government of Australia will provide a grant for the purpose of counterpart financing
requirements of the Government of Samoa. The grant will be administered by ADB and will be
utilized to finance land acquisition and resettlement and equipment supply and installation. The
financing percentage of 35% will be applied to individual payment requests for land acquisition
and resettlement. The financing percentages for equipment supply and installation will be
applied in accordance with Table A10.2, which will provide the basis for withdrawal for the
Government of Australia grant. The total financing of the Government of Australia grant
proceeds for equipment supply and installation represents 8.5%.
Table A10.2: Annual Financing Percentages for the Government of Australia Granta
Year Land Acquisition and Resettlement Equipment Supply and Installation

(% of Base Cost) (% of Base Cost)
FY2008 35 15
FY2009 35 15
FY2010 35 15
FY2011 35 15
FY2012 35 15
FY2013 35 0
FY2014 35 0
FY2015 35 0
FY = fiscal year.
a
For disbursement purposes, the financing percentages have been rounded as compared to Appendix 6,
Table A6.2: Detailed Cost Estimates by Financier.
5. Disbursements of the Government of Australia grant for the purpose of financing eligible
project expenditures will be in accordance with the Loan Disbursement Handbook and other
arrangements as stipulated below. Requests for disbursements will be submitted to ADB.
6. Reimbursement procedures will apply to eligible expenditures for land acquisition and
resettlement. Land acquisition and resettlement will be carried out in accordance with the
Taking of Land Act (1964) and ADB’s Involuntary Resettlement Policy (1995). The expenditures
will be reimbursed based on submission of the following supporting documentation, or as
otherwise could be reasonably requested by ADB.
(i) Withdrawal applications for eligible land acquisition and resettlement

compensation payments.
63
(ii) A copy of the relevant inventory of losses identifying (a) the affected person(s),
and, where applicable, the matai (footnote 1, Appendix 7) representing the
affected person; (b) the nature of the losses incurred by the affected person(s);
and (c) the agreed compensation payable to the affected person(s).
(iii) Evidence of the agreed compensation to the affected person(s) in the form of (a)
copy of the cancelled check (check that has been paid), which shows the check
number, the payee, the payment date, and the amount; or (b) a receipt signed by
the affected person(s) or, where applicable, by the matai representing the
affected person(s) as identified in the inventory of losses
7. The equipment supply and installation will be mostly paid through direct payment
procedure.
8. Reallocation of the Government of Australia grant proceeds can be done among cost
categories in accordance with ADB established procedures, subject to prior approval of the
Government of Australia.
9Disbursement
64
10. PROJECT PERFORMANCE MONITORING AND EVALUATION
A. Project Performance Monitoring System (PPMS)
1. EPC will establish a PPMS to facilitate the reporting requirements. The PPMS will
assess progress and implementation of the Project, including (i) resettlement activities, (ii)
compliance with the EARF and subproject EMMPs, and (iii) compliance with ADB’s loan
covenants. The PPMS will also monitor the operational efficiency and financial position and
projections of EPC to enable benchmarking against other utilities.
B. Project Benefits, Impacts, Assumptions, and Risks
2. The Power Sector Expansion Project will help provide sustainable and reliable electricity
services to all consumers in Samoa. The unreliable and poor quality electricity supply is
affecting all consumers and is becoming an increasing constraint to the expansion of the
tourism industry and economic growth. Once the benefits of the investment plan have been
realized, improvements in power supply cost effectiveness will reduce the need for tariff
increases.
3. EPC’s investment plan for 2008–2015 comprises a series of individual subproject

investments in generation and transmission which will improve the quality and reliability of
electricity supply and meet forecast demand on Upolu and Savai’i. The investment plan is
accompanied by institutional and power sector reform measures to ensure that project benefits
will reach all electricity consumers in Samoa.
1. Economic and Financial Analyses
4. As subprojects included under the investment plan are not stand-alone investments that
yield benefits in isolation from other investments in the power sector, the economic and financial
analyses were undertaken using a time-slice approach for EPC’s two power systems on Upolu
and Savai’i. The analyses are conducted for 23 years, including the investment period of 8
years. Oil prices were assumed to be constant at $60 per barrel (bbl) throughout the period of
analysis. Estimated annual CDM credits of $45,000 for the Savai’i hydropower project were
included in the analyses. The economic and financial analysis is in RRP, Appendix 12,
appended at the end of this Section.
5. Least-cost analyses were undertaken for the underground cabling program on Upolu
and for the hydropower project on Savai’i. Under conservative assumptions on the cost of
cyclone damage to the transmission lines, it would take about two cyclones for the underground
cabling program to become least-cost. During the first year of full operation, the hydropower
project on Savai’i would replace 96% of generation by the existing diesel power station at
Salelologa. With demand growth, this percentage will drop to 75% by 2020. The results show
that the hydropower project is least-cost if the average oil price over the period of analysis
exceeds $53.50 per bbl.
6. In the absence of an investment plan on Upolu, the economic analysis assumes that
EPC would serve demand from its existing generation capacity. Unserved demand initially
represents deficits in peak capacity. The transmission system will increasingly become a
65
bottleneck for power supply to consumers and system losses will increase. The economic
internal rate of return (EIRR) for the investments on Upolu is estimated at 13.6%. Benefits which
are difficult to quantify, such as those associated with the noise and emission control program at
the Tanugamanono power station and the protection of transmission lines against climate
change, have not been included in the analysis. The result is most sensitive to the estimated
capital costs. Capital cost increases of more than 14% would make the EIRR fall below 12%.
7. In the absence of investments on Savai’i, it is assumed that EPC would meet demand
with its existing diesel power station. No improvements in the power factor or system upgrades
would take place. The without-investment scenario is associated with increased system losses
and higher operations and maintenance costs. Under the base-case fuel price assumption of
$60 per bbl, the economic analysis yields an EIRR of 10.7%. As the hydropower project is a
major component of the investments on Savai’i, the economic results are most sensitive to
operations and maintenance costs, and in particular to assumptions on international fuel prices.
An international fuel price of $67 per bbl will increase the EIRR to 12%.
8. The financial analyses assume that all project capital and operations and maintenance
costs are borne by EPC. The financial benefits comprise projected sales based on tariff
projections, demand forecasts, and estimated carbon credits of $45,000 per year. The
incremental financial costs comprise capital, operations and maintenance, and system losses.
Financial benefits and costs were discounted by the weighted average cost of capital (WACC),
calculated at 4.5. The financial net present values discounted at the WACC for the investment
plan are ST44.1 million ($17.3 million) for the investments on Upolu and ST27.9 million ($10.9
million) for Savai’i. The financial rates of returns are 7.0% for the investments on Upolu and
12.1% for Savai’i. The financial result for Upolu is most sensitive to an increase in capital costs,
followed by a reduction in sales. The investment plan would remain financially viable if
investment cost increases do not exceed 31%. The financial result for Savai’i is most sensitive
to changes in fuel prices, but the international oil price would need to drop to below $27 per bbl
to undermine financial viability.
C. Impacts
9. To ensure that social, land acquisition, resettlement, and environment impacts are
mitigated under the Project, EPC will establish an environment and social unit (ESU) to plan,
implement, and coordinate land acquisition, resettlement, and environmental activities prior to
loan effectiveness. The ESU will initially be an integral part of the PMU but will eventually
become a permanent unit within EPC. The ESU will be responsible for establishing a register to
record and monitor temporary and permanent land acquisition and record consultations and
grievances relating to land acquisition and resettlement.
1. Land Acquisition and Resettlement
10. A LARF (Supplementary Appendix C) has been prepared in accordance with the Taking
of Lands Act (1964) and ADB’s Involuntary Resettlement Policy (1995), Handbook on
Resettlement (1998), Operations Manual F2 on Involuntary Resettlement (2006), Handbook on
Poverty and Social Analysis (2001), and Handbook for Incorporation of Social Dimensions in
Projects (1994). 1 The LARF will guide the preparation and procedures for land acquisition and
1
ADB. 1994. Handbook for Incorporation of Social Dimensions in Projects. Manila; ADB. 1998. Handbook
on Resettlement. Manila; ADB. 2001. Handbook on Poverty and Social Analysis. Manila; and ADB.
2006. Operations Manual. Section F2: Involuntary Resettlement. Manila.
66
resettlement plans (LARPs) for candidate subprojects under EPC’s investment plan.
Subprojects classified category A will require a LARP, category B subprojects will require a
short LARP, and category C subprojects will not require any LARP. Candidate subproject
LARPs will be prepared in full consultation with affected people and disclosed to them in draft
form and included in the feasibility studies for candidate subprojects. Compensation and
entitlements will be consistent with those in the entitlement matrix outlined in the LARF. All
affected people will be provided with compensation if (i) land is permanently or temporarily
acquired, (ii) their crops and trees are damaged or destroyed, or (iii) access to their traditional
lands is limited or blocked as a result of the subproject. Lack of legal documents pertaining to
their customary rights of occupancy, or lack of titles, will not affect affected people’s eligibility for
compensation.
11. The two core subprojects (the Hospital Feeder upgrading project – stage 1, and the
supply and installation of prepayment meters) will not have land acquisition and resettlement
impacts, are classified category C, and do not require LARPs.
2. Social and Gender
12. A summary poverty reduction and social strategy was developed based on the findings
of an initial poverty reduction and social assessment and social surveys. During development of
EPC's investment plan, consultations with representatives of communities, government
ministries, and other stakeholders were undertaken. Focus-group consultations were held with
women. No specific impacts to women are envisaged. If land acquisition is required, women will
be incorporated into the consultation and decision-making process. A summary poverty
reduction and social strategy is presented in RRP, Appendix 13, also found at the end of this
Section.
3. Environment
13. An EARF (Supplementary Appendix D) has been prepared in accordance with the
Government’s environmental requirements as set out in the Planning and Urban Management
Act (2004), the Draft Planning and Urban Management (Environmental Impact Assessment)
Regulations (2007), and ADB’s Environment Policy (2002) and Environmental Assessment
Guidelines (2003). 2 The EARF will guide the preparation and approval procedures of
environmental assessments of candidate subprojects under EPC’s investment plan. Subprojects
with environmental category A are not envisaged and will not be eligible for ADB financing
under the Project.
14. Candidate subproject IEEs will be included in the feasibility studies for submission to
ADB. An EMMP will be required for subprojects classified as environmental category B or B-
sensitive. Subproject feasibility reports will identify adequate funding for EMMPs. Subproject
EMMPs will be reflected in the bid documents, incorporated into project design, and included in
civil works contracts for subprojects. The PMU and contractors will be guided by the EMMPs in
managing, monitoring, and reporting environmental impacts and compliance. Civil works may
only commence once the IEE report of subprojects are approved by ADB and the development
concept approval of the PEAR is issued by PUMA.
15. The Hospital Feeder upgrading project – stage 1 is classified environmental category B,
and the supply and installation of prepayment meters project is classified category C. An IEE
2
ADB. 2003. Environmental Assessment Guidelines. Manila.
67
has been prepared for the Hospital Feeder upgrading project – stage 1 (Supplementary
Appendix E). The summary initial environmental examination is in Supplementary Appendix F.
An IEE is not required for the prepayment metering project.
D. Risks and Assumptions
16. Debt Sustainability. EPC’s investment plan and financing arrangements have been
prepared considering Samoa’s debt sustainability. To ease the macroeconomic impact of the
large financing requirements in the power sector, ADB will provide an ADF IX grant of $15.39
million. The ADB and JBIC concessional loans are projected to increase Samoa’s external debt
burden from 37% of GDP in 2007 to about 39% in 2011.
17. Political Commitment to Power Sector Reform and Good Governance. Power
sector reform, including cabinet and parliamentary approval of an electricity act to govern all
stakeholders and the establishment of a regulatory agency, is critical to improving the
performance of the power sector and ensuring that investments translate into benefits for
electricity consumers. The TA cluster for Implementing the Samoa National Energy Policy will
assist the Government (i) in the consultation process, (ii) to draft and amend legislation, and (iii)
establish the regulatory agency. Assurances under the Project reflect the key milestones for
regulatory reform.
18. EPC’s Affordability. EPC’s affordability of the investment plan and debt repayment
capacity has been carefully considered in the selection and timing of subprojects. To ensure
that timely adjustments to tariffs can be made in response to increases in EPC costs, a formal
mechanism for determining tariffs within the context of an overall regulatory framework needs to
be established. Until a tariff mechanism can be established, the Government has introduced a
fuel surcharge which is subject to review by cabinet every 6 months. 3 Ongoing policy dialogue
and annual updates of EPC’s financial projections will help assess tariff requirements. To
address EPC’s poor collection performance, the Government will clear all arrears by
government ministries and state-owned entities prior to loan effectiveness, and prepayment
metering will be installed for EPC consumers. The assurances under the Project include that
75% of all consumers are on prepayment meters by the end of 2012. In the case of certain
basic social services where suspending electricity services may not be possible, budgetary
allocations for electricity consumption will be paid directly to EPC.
19. Counterpart Financing. EPC’s ability to provide counterpart financing is expected to be

limited before the major financial benefits of the investment plan are realized. It is estimated that
EPC will be able to provide $12 million of the total counterpart financing requirement over the
2008–2015 investment period, leaving a residual amount of $8 million. The Government of
Australia will finance the portion beyond the capacity of EPC, and this will be reflected as the
Government’s equity in EPC.
20. EPC’s Implementation Capacity and Cost Overruns. To manage the risk of delays,
consultations with the attorney general have been held to ensure that Government requirements
for loan effectiveness are addressed in a timely manner and draft bid documents have been
prepared to help ensure timely implementation of core subprojects. Approval of advance
procurement action will help ensure that construction activities can commence in accordance
with the implementation schedule. Advance recruitment of the project manager and
implementation consultants will help mitigate EPC’s capacity constraints in project preparation
3
More frequent reviews are being considered by cabinet.
68
and procurement activities. To the extent possible, EPC will apply plant design, supply, and
install contracts to reduce the burden of coordination of construction activities.
E. Project Review
21. ADB will undertake an inception mission 1 month after loan effectiveness or 1 month
after fielding of project implementation consultants, whichever is later. Review missions will be
undertaken at 6-monthly intervals (starting 6 months after the inception mission) for the initial 3
years of the Project. The review missions will include an evaluation of (i) project scope and
costs; (ii) implementation arrangements; (iii) progress in implementing the LARF, EARF, and
subproject IEEs and EMMPs as applicable; and (iv) achievement of scheduled targets and
identification of project risks. The review missions will also undertake ongoing policy dialogue on
(i) EPC’s operational efficiency and financial performance, (ii) the Government’s progress on
power sector reforms, and (iii) compliance with loan covenants. ADB will field a midterm review
4 years after loan effectiveness.
69
RRP, Appendix 12
ECONOMIC AND FINANCIAL ANALYSES
1. Samoa is a small and highly import-dependent country that relies largely on official
transfers and remittances for foreign currency revenues. Despite vulnerability to external
shocks, the Independent State of Samoa has experienced stable economic growth over the last
5 years. Real gross domestic product (GDP) grew at around 4% per annum, well above the
average growth rate of the Pacific region economies. The annual long-term growth rate is
expected to be around 3.5%. Economic growth is mainly driven by agriculture, construction,
finance, and business services. Samoa is also benefiting from an increase in tourism. Further
broadening of economic activity and private sector development are key strategies for
sustaining economic growth rates and reducing poverty.
2. The Government’s Strategy for the Development of Samoa 2005–2007 lays the
foundation for sustainable and broad-based economic growth supported by continued reforms
and private sector development to improve the quality of life for all people in Samoa. Ensuring
that sufficient power is available to meet growing demand is essential to achieving a broader
economic base and reducing the country’s vulnerability to external shocks.
Power Demand and Supply Balances
3. The power sector in Samoa has undergone a rapid transformation over the last decade
towards an energy supply based on imported petroleum and hydropower-generated electricity.
This transformation has been driven by economic growth that has resulted in increasing
demand for electricity and transportation. Energy demand in Samoa is met by three main
sources: biomass (47%), fossil fuel (45%), and hydropower (8%). Biomass is mainly used for
cooking whereas imported petroleum is used for transportation and power generation. Imports
of petroleum products account for 15% of Samoa’s total import expenditure. Power generation
accounts for about 20% of total imported petroleum.
4. More than 90% of the country’s electricity demand is on Upolu, which is also the main
source of growth in Samoa. Peak electricity demand reached 17.6 megawatts (MW) in 2007.
Annual peak demand is expected to grow by 7% in the short term and by 4% beyond 2009
(Table A12.1). By 2008, the Electric Power Corporation (EPC) will not be able to reliably meet
demand. 4 In the short term, EPC will utilize existing self-generation by large consumers to meet
peak demand. 5 By 2010, the existing run-of-the-river hydropower station at Alaoa will be
refurbished and by 2011 EPC will need to commission additional generation capacity to meet
both energy and peak demands.
4
Assumes a reliability criteria of the available capacity minus the capacity of the largest generator.
5
The capacity of existing self-generation is estimated to be about 8 MW.
70
Table A12.1: Power Balance - Upolu System

(Without-Investment Plan)
Year Peak Total Firm Firm Power Reserve Firm

Demand Generation Capacity at Balance Generation
(MW) Capacity N-1 Reserve at N-1 Capacity
(MW) (MW) (MW) (MW)
2002 15.8 24.6 20.5 4.7 8.8
2003 15.9 24.6 20.5 4.6 8.7
2004 16.2 24.6 20.5 4.3 8.4
2005 17.0 24.6 20.5 3.6 7.7
2006 17.6 24.6 20.5 3.0 7.1
2007 19.7 24.6 20.5 0.9 5.0
2008 20.8 24.6 20.5 (0.3) 3.8
2009 21.7 24.6 20.3 (1.4) 2.9
2010 22.6 22.8 18.5 (4.1) 0.2
2011 23.5 22.8 18.5 (5.0) (0.7)
MW = megawatt, N-1 = total generation capacity minus the largest generator.
Sources: Asian Development Bank (ADB) and EPC.
5. Peak demand on Savai’i is expected to grow by 4% annually to 2009. With a longer-term

growth in peak demand of 3%, the existing diesel power station at Salalologa is estimated to
meet capacity and annual energy requirements until 2015, when a 0.4 MW generator is
scheduled for retirement. A power factor improvement project has been scheduled for 2010 to
improve operational efficiency. A hydropower development, scheduled for commissioning in
2015, is a key priority to reduce diesel consumption on Savai’i. If the proposed hydropower
development project can be commissioned, 81% of energy requirements on Savai’i can be met
from renewable resources in 2015. The Project will also reduce noise and pollution from the
power station.
Investment Plan
6. The investment plan covers the two power systems on Upolu and Savai’i. EPC’s
investment plan will meet forecast demand requirements up until 2019, when new capacity will
be required on Upolu, and help EPC improve its collection performance through the installation
of prepayment meters. The investment plan comprises three generation and nine transmission
projects on Upolu, and one generation and three transmission projects on Savai’i. Investment in
single- and three-phase prepayment meters, system control and data acquisition (SCADA), and
portable equipment for measuring voltage and current and for stream-flow gauging are included
for both the Upolu and Savai’i power systems.
7. Identified generation projects are based on analysis of the power and energy balances
for each of the power systems. Investments in the transmission networks are driven by the need
to improve reliability, reduce losses, and meet peak requirements, and have been identified
based on detailed load-flow analysis of the performance of individual transmission lines, and the
system as a whole. The timing of investments in generation on Upolu is initially driven by peak
capacity requirements. The existing generation capacity can meet energy requirements to 2013
71
when a 1.3 gigawatt-hour (GWh) shortfall is expected. 6 Investment in hydropower generation on

Savai’i aims to replace fuel costs of the existing power station at Salalologa. The timing of
commissioning of the hydropower project is determined based on the need for adequate time to
address community concerns, and the financial and implementation capacity of EPC.
8. Projects under the investment plan are prioritized to improve reliability and security of
power supply to the main load center in Apia and to improve EPC’s revenue collection. EPC
plans to improve utilization of the existing transmission system, and reliability of supply, by
replacing the existing 6.6 kilovolt (kV) overhead transmission lines with a 22 kV underground
cable. This is the first phase of a three-phase underground program that aims to secure
electricity supply to the main load centers and the hospital, and protect the key transmission
lines against cyclone damage. The underground program is expected to be fully completed by
2013. EPC’s revenue collection will be improved through the installation of prepayment meters
to all consumers on Upolu and Savai’i. The supply, installation, and operation of the SCADA
system will enhance the control systems and improve operational system efficiency on both
Savai’i and Upolu. Transmission upgrades and expansion of the low voltage distribution network
will take place throughout the investment plan, commencing in 2008. EPC’s investment plan is
detailed in Appendix 3 and Supplementary Appendix G.
Least-Cost Analysis
9. Projects under the investment plan were included and sequenced to account for EPC’s
financial and implementation capacity. Feasible alternatives for the proposed generation
projects are limited. The generation projects included for expansion on Upolu include the
refurbishment of the existing 1 MW Alaoa hydropower station by 2010 and a new 12.9 MW
diesel power station for which commissioning of three 4.3 MW diesel generators would be
sequenced between 2011 and 2014. Up until 2011, EPC may face capacity shortages in reliably
meeting peak demand during the dry season. Utilization of existing stand-by self-generation
capacity enables EPC to manage the risk of capacity shortages until adequate transmission
capacity has been commissioned. Two possible hydropower sites at Lotofagauta and Tia'vea
were identified on Upolu. However, given technical, capacity, cost, and social uncertainties with
these projects, they were not included in EPC’s investment plan for 2008–2015.
10. A least-cost analysis for generation options on Savai’i was undertaken to ascertain
whether the proposed 1 MW firm capacity run-of-the-river hydropower scheme would represent
the least economic cost option for meeting demand to 2030. The capital costs include cost for
resettlement and land acquisition. Taxes, duties, and value-added government sales tax were
excluded for all capital, insurance, and operations and maintenance costs.
11. Average annual output is estimated at 11.8 GWh, which would provide 96% of
generation requirements on Savai’i in 2015. With demand growth, the share of hydropower
would reduce to 75% by 2020. The balance of generation requirements would be met by the
existing diesel power station, which would mostly be used to meet peak demand. The hydro-
diesel mix option was compared to a diesel-only option, where the existing power station would
be maintained to meet demand growth to 2030. Commencing in 2015, 3,355 tons (t) of diesel
fuel would be saved annually; by 2017, savings would increase to 3,446 t annually. The result of
the least-cost analysis is presented in Table A12.2. The results of the sensitivity analysis
6
This energy balance deficit assumes that transmission investments are undertaken as per the
investment plan to reduce system losses.
72
suggest that the hydro-diesel mix option would become unviable at an international oil price
about $53.5 per barrel (bbl), equivalent of an economic cost of ST1.316 per liter (l).
Table A12.2: Least-Cost Analysis
Fuel Price Hydro-Diesel Mix (NPV) Diesel Only (NPV)

International Price Economic Cost of Diesel
$ ST per $ ST
of Crude Oil in Samoa
per kWh kWh per kWh per kWh
($ per bbl) (ST per liter)
45 1.113 0.176 0.449 0.167 0.425
60 1.470 0.209 0.532 0.215 0.549
75 1.835 0.242 0.618 0.267 0.680
Bbl = barrel, kWh = kilowatt-hour, NPV = net present value, ST = Samoan tala.
12. The underground cabling program on Upolu aims at enhancing transmission capacity
and improving reliability to the main load centers in Apia, the industrial area at Vailima, and the
hospital. The program will commence in 2008 and be fully completed by the end of 2014. It
includes (i) two stages of upgrading and underground cabling of the existing 6.9 kilometers (km)
of the Hospital Feeder (1.1 km of which is currently underground), (ii) upgrading the capacity
and underground cabling of the Vaitele Feeder, and (iii) underground cabling of a new 22 kV
transmission line from the proposed Vaitele Substation to the wharf area and through the
industrial area at Vailima to the airport.
13. The first stage of the Hospital Feeder upgrade will improve utilization of the Vaitele
Feeder and reduce the load on the Hospital Feeder. Load-flow analysis show that the Hospital
Feeder is currently experiencing overloads and voltage drops, and is increasingly becoming a
bottleneck to reliable electricity supply both to Apia’s main commercial and government district
and to the hospital. By 2011, overloading on this transmission line will be 30% and the voltage
drops will have increased from 11% in 2006 to 20% by 2016, when the overloading will be about
70%. Losses are estimated to increase from 6% in 2006 to 11% by 2016.
14. Since the early 1990s, Samoa has experienced four serious cyclones. The two cyclones
in the early 1990s caused damage estimated at $120 million (26% of GDP) and $200 million
(46% of GDP). With global warming, the incidence and severity of cyclones can be expected to
increase in the future. The 2004 cyclone caused damage to key infrastructure assets alone
estimated at $25 million, excluding the cost to the power sector and impacts on economic
activity. EPC estimated the cost of damage to power sector assets at $2.8 million in addition to
a loss of 2.73% of total sales for 2004.
15. The difference in economic net present value costs for the underground cabling program
versus overhead transmission lines is $4.04 million. Assuming that the costs of damage from a
cyclone would amount to 25% of the investment cost in overhead transmission lines, it would
take about two cyclone events for the underground program to become least cost. Cost saving
associated with the longer economic life of underground cables, reduced operation and
maintenance costs, and loss of economic production and activity, including the opportunity cost
of self-generation caused by disruptions in power supply associated with cyclone damage, have
been excluded from the analysis. Underground cabling of key transmission lines forms part of
the Government’s national risk management strategy to improve resilience against natural
hazards and climate change.
73
Economic Analysis
16. As subprojects included under the investment plan are not stand-alone investments that
yield benefits in isolation from other investments, the economic analysis was undertaken for
EPC’s two power systems on Upolu and Savai’i using a time-slice approach. The analysis is
conducted from 2008 to 2030 with an investment period from 2008 to 2015. The economic
capital costs include investment costs and costs for project management and implementation,
environment management and mitigation, and resettlement and land acquisition. It was
assumed that the economic opportunity cost of land is 25% of the financial compensation.
17. The net economic benefits for the two power systems on Upolu and Savai’i were derived
by comparing the performance of the power systems on Upolu and Savai’i under a with-
investment plan scenario and a without-investment plan scenario. On Upolu, 97% of the capital
cost for prepayment meters and 78% of the SCADA costs and project management and
implementation were allocated to the system, with the remaining 3% of the capital cost for
prepayment meters and 12% of SCADA costs and project management and implementation
allocated to Savai’i. It was assumed that EPC staff costs (the second largest operation and
maintenance cost after fuel) would remain the same under both the with-investment and
without-investment scenarios.
18. In the absence of an investment plan on Upolu, the economic analysis assumes that
EPC would serve demand from its existing generation capacity. Unserved demand initially
represents deficits in peak capacity. The transmission system will become an increasing
hindrance to power supply to consumers and system losses will increase until generation
capacity reached its maximum output in 2017. 7 With increased system losses and growing
demand, energy deficits will commence in 2013. Incremental benefits were valued at the
willingness to pay, estimated at ST0.99 per kWh. 8 The economic internal rate of return (EIRR)
for the investments on Upolu is estimated at 13.6%. Benefits which are difficult to quantify, such
as those associated with the noise and emission control program at the Tanugamanono power
station and with protection of transmission lines against climate change, have not been included
in the analysis. The result is most sensitive to the estimated capital costs, followed by the
assumptions of benefits. Capital cost increases of more than 14% would make the EIRR fall
below 12%. A 20% reduction in benefits would reduce the EIRR to just below 12%.
19. The with-investment scenario on Savai’i would yield benefits associated with reduced
fuel and operation and maintenance costs and an annual economic benefit of $45,000 in
carbon-market credits associated with the reduced diesel usage resulting from the hydropower
project. The without-investment scenario assumes that no new investments will take place on
Savai’i. Demand would be met by the existing diesel power station at increased fuel and
operation and maintenance costs. The calculations do not include benefits associated with
reduction of noise and fumes from the existing power station at Salalologa. The analysis under
the base-case fuel price (the equivalent of $60 per bbl) yields an EIRR of 10.7%. The result is
most sensitive to changes in operation and maintenance costs followed by capital costs. If the
international oil price over the period averaged $67 per bbl, the EIRR increases to 12%. A
7
The existing overhead lines to main load centers in Apia would also remain vulnerable to cyclones.
8
The methodology for calculating the willingness to pay followed the approach outlined in ADB’s
Economics and Research Department Technical Note No.3, Measuring Willingness to Pay for
Electricity. The estimated weighted average willingness to pay for domestic and nondomestic
consumers is ST0.99 ($0.388) per kWh.
74
capital cost increase of more than 4% would reduce the EIRR to below 10%. The details of the
economic analysis are in Supplementary Appendix I.
Financial Analysis
20. The financial analysis was undertaken based on a comparison of the financial costs and
benefits associated with the investment plan for the two separate power systems on Upolu and
Savai’i. Financial benefits comprise (i) projected revenue based on tariff projections, (ii) load
forecasts, and (iii) estimated carbon credits of $45,000 per year. The incremental financial costs
comprise capital, operation and maintenance (including fuel), and system losses. Financial
benefits and costs were discounted by the weighted average cost of capital (WACC), calculated
at 4.5% (Table A12.3). The WACC is calculated in real terms for EPC’s investments for 2008–
2015. The financing sources comprise EPC’s equity contributions (financed through retained
earnings), the Government’s equity contributions (financed by the Government of Australia), and
foreign exchange loans from the Asian Development Bank (ADB) and the Japan Bank for
International Cooperation (JBIC) relent to EPC in local currency at an interest rate of 6.5%. The
cost of EPC’s equity is estimated at 15.2% on the basis of a risk-free rate of 9.6% of New
Zealand dollar denominated bonds issued by the Government of New Zealand, and adjusted for
Samoa. Assumptions underlying the WACC computations include that EPC will not be required
to pay tax, and an average domestic inflation of 3.6%.
Table A12.3: Weighted Average Cost of Capital
Government
Government and
Item Relending of Loans Total
EPC Equity
ADB JBIC
Amount ($ million) 42 38 20 100
Weighting (%) 42.00 38.00 20.00 100
Nominal Cost (%) 6.50 6.50 15.20
Tax Rate (%) 0.00 0.00 0.00
Tax Adjusted Nominal Cost (%) 6.50 6.50 15.15
Inflation Rate (%) 3.58 3.58 3.58
Real Cost (%) 2.82 2.82 11.16
Weighted Average Cost of Capital (%) 1.18 1.07 2.23 4.48
ADB = Asian Development Bank, EPC = Electric Power Corporation, JBIC = Japan Bank for International
Cooperation.
Source: ADB estimates.
21. The financial net present values discounted at the WACC for the investment plan is
ST44.1 million ($17.3 million) for the investments on Upolu and ST27.9 million ($10.9 million) for
Savai’i. The financial rates of returns are 7.0% for Upolu and 12.1% for Savai’i. The financial
result for Upolu is most sensitive to an increase in capital costs, followed by a reduction in
benefits (sales). The investment plan would remain financially viable if capital cost increases do
not exceed 31%. The financial result for Savai’i is most sensitive to changes in fuel prices, but
the international oil price would need to drop to below $27 per bbl to undermine financial
viability. The details of the financial analysis are in Supplementary Appendix J.
75
RRP, APPENDIX 13
SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY
A. Linkages to the Country Poverty Analysis
Is the sector identified as a national Yes Is the sector identified as a national Yes
priority in country poverty analysis? priority in country poverty partnership
No agreement? No
Contribution of the sector or subsector to reduce poverty in Samoa:
Despite vulnerability to external shocks, the Independent State of Samoa has experienced stable economic growth
over the last 5 years. Real gross domestic product grew at around 4% per annum, well above the average growth rate
of the Pacific region economies. Economic growth is mainly driven by agriculture, construction, finance, and business
services. Samoa is also benefiting from an increase in tourism. Further broadening of economic activity and private
sector development are key strategies for sustaining economic growth rates and reducing poverty. The Government’s
Strategy for the Development of Samoa 2005–2007 lays the foundation for sustainable and broad-based economic
growth supported by continued reforms and private sector development to improve the quality of life for all people in
Samoa. Ensuring that sufficient power is available to meet growing demand is essential to achieving a broader
economic base and reducing the country’s vulnerability to external shocks.
With the rural electrification program nearing completion, 95% of the population has access to electricity. Good
performance of the power sector and reliable electricity services are vital for promoting private sector investments to
diversify the economy and achieve sustainable economic growth. Electricity is also an intermediate input to the
provision of basic social services, including health, education, and water supply. Inadequate and unreliable power
supply is an increasing hindrance to economic growth and is affecting all consumers in Samoa. Poor people are
disproportionately affected by poor reliability and quality of power supply, and by inefficiencies in the power sector.
B. Poverty Analysis Targeting Classification: General intervention

What type of poverty analysis is needed?
The 2002 Household Income Expenditure Survey shows that a high proportion of households use electricity as a main
source of lighting. The average household consumption is 76 kilowatt-hours (kWh) per month and electricity
expenditure accounts for about 4% of average household expenditure in Samoa. Affordability of appliances is the
major determinant of electricity demand, and electricity consumption is strongly correlated with income. Poor people
typically spend comparatively more on electricity but generally consume small amounts of electricity for basic lighting
and an electric fan. Access to the electricity grid has had significant expenditure-reducing effects for poor households,
and this has allowed them to become more energy efficient. However, with deteriorating quality and reliability of
supply, the impact on poor households is disproportional as appliances need to be replaced more often.
The Electric Power Corporation’s (EPC) investment plan includes prepayment meters for all consumers on Savai’i and
Upolu. Prepayment meters allow households to be more aware of their electricity consumption and better manage
their consumption to match income streams. EPC has so far installed 1,200 prepayment meters on Upolu and social
acceptance is high.
A rapid social assessment (RSA) was conducted within the Sili area on the south coast of Savai'i. Community
participation through key respondent interviews and focus-group discussions in the project areas highlighted several
major perceived sector issues.
(i) Electricity is a major cost to most households in Savai'i. RSA survey data analysis showed that households on
Savai'i allocate on average 10% of monthly income to purchase electricity. Of the residential households surveyed,
32% stated that they are unable to pay electricity bills on time due to household cash flow constraints, and 14% had
had their electricity supply disconnected due to late payment. A number of households (16%) stated that their
neighbors had opted not to reconnect the electricity supply as they are unable to pay their monthly electricity bills.
(ii) The majority of residential and commercial consumers (67%) rated the quality of EPC’s services as good, 31%
rated EPC's service as average, and 2% were dissatisfied. Survey respondents expressed concern over the growing
frequency of electricity supply interruptions and 84% stated that the quality of electricity services on Savai'i needs to
improve. During the second half of 2006, there were 32 power supply interruptions which lasted for an average of 40
minutes each.
(iii) About 97.3% of the RSA respondents agreed that electricity is important to households and businesses because of
the benefits provided by electricity and its contribution to the maintenance of peace and order in the villages through
the provision of street lighting. Most households surveyed (74%) stated that they were unwilling to pay high electricity
tariffs for improved electricity services.
(iv) Perceived benefits of the electrical services include (a) prolonging the study time of school children, (b) savings on
76
expenses and making household chores convenient, (c) enjoyment in watching television programs or listening to
radio programs, and (d) enhancement of skills which are dependent on electricity, such as refrigeration and electronic
repairs and steel fabrication.
C. Participation Process
Is there a stakeholder analysis? Yes No
A stakeholder analysis was prepared as part of the community and household consultations for the Vaita'i Hydropower
Subproject. A physical scale model was displayed to the communities and used to explain the impacts of the Vaita'i
hydropower project during a series of community meetings undertaken in March 2007. A project information booklet
was provided in the Samoan language to ensure that the impacts of the project could be clearly understood. Separate
consultations were also undertaken with women. In general, affected people responded positively to the project but
consensus has not been reached. Therefore, the project is postponed until 2013 or until such time as the communities
accept the project. Until acceptable renewable generation sources can be developed on Savai’i, the people of Savai’i
will have access to electricity supplied from the existing diesel power station at Salalologa. EPC’s investment plan
includes a control system and a power factor improvement project for the power system on Savai’i. This is expected to
lead to improvements in quality and reliability of electricity supply provided that existing diesel generators are operated
and maintained adequately.
Candidate subprojects will require community acceptance prior to implementation. An environmental and social unit
will be formed within EPC and will operate within the project management unit. The environmental and social unit will
be responsible for stakeholder consultations and manage project environmental, land acquisition, and resettlement
activities. Project information booklets will be prepared for each candidate subproject and disclosed to affected people
in the wider community.
Further stakeholder analysis will be undertaken as part of the power sector reform in order to fully understand and
take into account the views, interests, and impacts on all stakeholder groups. This analysis will be supported through
the technical assistance (TA) cluster for Implementing the Samoa National Energy Policy.
Is there a participation strategy? Yes No
The participation strategy outlining the community consultation and participation framework for the Power Sector
Expansion Project is included in the land acquisition and resettlement framework. EPC consults with landowners prior
to land acquisition. Representatives from EPC inform the affected parties, in advance, of EPC’s intention to acquire
land and compensation matters. Further consultations take place during and after detailed design and prior to the
preparation of a full census of affected people and inventory of losses. The subproject land acquisition and
resettlement plans will be made available to affected people. The objectives of the subproject, the amount of land
required, compensation entitlements, and grievance redress mechanisms will be disclosed to affected people in the
local language.
The TA cluster for Implementing the Samoa National Energy Policy incorporates the preparation and implementation
of stakeholder participation and consultations into the reform process and awareness-building for development of
renewables.
D. Gender Development
Strategy to maximize impacts on women:

Currently, no specific adverse impacts to women are foreseen. The development of subprojects involves community
consultations and EPC will actively encourage representation by women at all public meetings to ensure that women
(i) fully understand the subproject and its benefits, (ii) become involved in collective decision making, and (iii) raise the
issues and concerns affecting them in respect to the subproject and identify suitable mitigation measures to address
concerns.
Social investigations show that poor and vulnerable groups are adequately catered for within traditional Samoan
society and will receive an equitable share of any compensation. No specific remedial actions are thought necessary.
Has an output been prepared? Yes No: No Adverse gender impacts are foreseen.
77
E. Social Safeguards and Other Social Risks
Item Significant/ Plan Required

Not Significant/ Strategy to Address Issues
None
Significant Land acquisition for the Project will generally involve Full
fallow agricultural lands. For the core subprojects, no land
Resettlement Not significant acquisition or resettlement effects are anticipated. Future Short
subprojects may have resettlement impacts. Procedures
None for land acquisition are included in the land acquisition None
and resettlement framework prepared for the Project.
Significant The Project will contribute to the Government’s objective Yes

of providing a reliable and secure electricity supply at
Affordability Not significant cost-effective prices. More frequent and timely tariff No
adjustments will be required to ensure that project
None benefits are sustainable.
Significant Short-term employment opportunities may be generated

during the construction phase of the Project. Longer-term Yes
Labor Not significant employment opportunities, particularly in the service
sector, could also be generated by commercial and No
None industrial development resulting from more reliable power
supply.
Significant The project is not envisaged to have any impacts on

indigenous people. Yes
Indigenous Not significant
Peoples No
None
Significant No other social project risks beyond land acquisition were
Other Risks identified. Community acceptance will be required for all Yes
and/or Not significant subprojects financed by ADB grant and loan, JBIC loan,
Vulnerabilities and Government of Australia grant. No
None
The stakeholder communication strategy will identify and
propose remedies to social risks related to power sector
reforms.
78
11. PROGRESS REPORTS
A. Introduction
1. Loan regulations and financing and project agreements require the borrower and
executing agency (EA) to provide ADB with reports and information it reasonably requests.
These include the EA’s periodic progress reports that enable the borrower, EA, and ADB to
monitor project progress, become aware of problems during implementation, and assess
whether the immediate project objectives will be met.
2. Generally, the borrower or EA submits the progress reports quarterly, regardless of

progress achieved during the period. When little or no progress is achieved, the progress
reports inform ADB of the reasons and problems delaying implementation or that may result in
the immediate objectives not being met.
B. Content and Format
3. The content of the progress report includes sufficient information in summary form to be
useful to ADB as a funding agency. The purpose of the report is to enable the borrower, EA,
and ADB to monitor the latest progress, become aware of current problems, and assess
whether the project’s immediate objectives will be met. More detailed reports are prepared by
consultants or contractors for the project management unit (PMU) or for the EA’s management.
These reports are held at the PMU and are made available for ADB review, midterm review, and
project completion review missions.
4. The progress report sent to ADB is an executive summary of the detailed reports; with
format and content permitting ADB staff to readily capture key information for inputting into the
project performance report (PPR). When ADB requires detailed information (such as
background to a particular problem), this is included as an appendix. Simple charts such as a
bar or milestone charts to illustrate implementation progress, a chart showing actual versus
planned expenditures, and the relationship between physical and financial performance are
included. A framework and guidelines for calculating project progress and a sample
implementation schedule are also provided at the end of this Section.
C. Project’s Quarterly Progress Reports (QPR)
5. EPC will submit QPRs for individual subprojects to ADB. These reports will include a
description of (i) the physical progress of the subproject; (ii) any difficulties encountered and or
anticipated along with corrective actions; (iii) the implementation progress on the land
acquisition and resettlement framework (LARF), environmental assessment and review
framework (EARF), and subproject IEE’s and EMMPs as applicable; (iv) the reasons for any
delays in project implementation and recommendations for corrective actions; and (v) the
summary of financial accounts comprising project expenditures during the previous quarter,
year to date, and total to date. The quarterly progress reports will also include key performance
and benchmark indicators as identified in the approved subproject feasibility studies. As
needed, the progress reports will include updates of the procurement plan. EPC will submit
subproject completion reports within 3 months of subproject completion. The subproject
completion report will (i) provide an assessment of the execution and operation of the
subproject, (ii) provide the status of compliance with loan covenants, and (iii) include results on
79
subproject outcomes and performance. A sample format of a QPR is attached at the end of
this section.
D. Interest Payment Reports
6. In addition to the QPR, MOF will provide annual reports to ADB on the interest payment
from the relent grant to EPC directed to the CEF and CDM subfund. MOF will report to ADB
when EPC has met conditions for the grant incentive scheme and advise as to the amount of
the loan principal to be converted into grants to EPC.
11ProgRpts
80
Annex 1
SAMPLE
Pro Forma of the Executing Agency’s Project Progress Report
A. Introduction and Basic Data
Provide the following:
 ADB/JBIC/GOA loan/grant number, project title, borrower, executing agency,

implementing agency;
 total estimated project cost and financing plan;
 status of project financing including availability of counterpart funds and
cofinancing;
 dates of approval, signing, and effectiveness of ADB loan;
 original and revised (if applicable) ADB loan closing date and elapsed loan period
based on original and revised (if applicable) loan closing dates; and
 date of last ADB review mission.
B. Utilization of Funds (ADB Loan/Grant, GOA Grant, JBIC Loan, and Counterpart Funds)
 cumulative contract awards financed by the ADB loan, cofinancing, and

counterpart funds (commitment of funds to date), and comparison with time-
bound projections (targets);
 cumulative disbursements from the ADB loan, cofinancing, and counterpart funds
(expenditure to date), and comparison with time-bound projections (targets); and
 reestimated costs to completion, need for reallocation within ADB loan
categories, and whether an overall project cost overrun is likely.
C. Project Purpose
 status of project scope/implementation arrangements compared with those in the

report and recommendation of the President (RRP), and whether major changes
have occurred or will need to be made;
 an assessment of the likelihood that the immediate development objectives
(project purpose) will be met in part or in full, and whether remedial measures are
required based on the current project scope and implementation arrangements;
 an assessment of changes to the key assumptions and risks that affect
attainment of the development objectives; and
 other project developments, including monitoring and reporting on environmental
and social requirements that might adversely affect the project's viability or
accomplishment of immediate objectives.
81
D. Implementation Progress
 assessment of project implementation arrangements such as establishment,

staffing, and funding of the PMU;
 information relating to other aspects of the EA’s internal operations that may
impact on the implementation arrangements or project progress;
 progress or achievements in implementation since the last progress report;
 assessment of the progress of each project component, such as,

- recruitment of consultants and their performance;
- procurement of goods and works (from preparation of detailed designs and
bidding documents to contract awards); and
- the performance of suppliers, manufacturers, and contractors for goods and
works contracts;
 assessment of progress in implementing the overall project to date in comparison

with the original implementation schedule—quantifiable and monitorable target,
(include simple charts such as bar or milestone to illustrate progress, a chart
showing actual versus planned expenditure, S-curve graph showing the
relationship between physical and financial performance, and actual progress in
comparison with the original schedules and budgets, the reference framework or
guidelines in calculating the project progress including examples are shown in
Appendix 2); and
 an assessment of the validity of key assumptions and risks in achieving the

quantifiable implementation targets.
E. Compliance with Covenants
 the borrower's compliance with policy loan covenants such as sector reform
initiatives and EA reforms, and the reasons for any noncompliance or delay in
compliance;
 the borrower’s and EA’s compliance with financial loan covenants including the
EA’s financial management, and the provision of audited project accounts or
audited agency financial statements; and
 the borrower’s and EA’s compliance with project-specific loan covenants
associated with implementation, environment, and social dimensions.
F. Major Project Issues and Problems
Summarize the major problems and issues affecting or likely to affect implementation progress,
compliance with covenants, and achievement of immediate development objectives.
Recommend actions to overcome these problems and issues (e.g., changes in scope, changes
in implementation arrangements, and reallocation of loan proceeds).
11ProgRpts
82
Annex 2
Framework and Guidelines in Calculating Project Progress
A. Introduction
1. All implementation activities are reflected in measuring implementation progress against

the project implementation schedule and referred to as "project progress.”
2. Physical and pre-commencement activities are considered in calculating project

implementation progress. These activities, which may include recruitment of consultants,
capacity building, detailed design, preparation of bid and prequalification documents, etc., could
constitute a significant proportion of overall implementation and therefore should be counted.
3. Each activity in the implementation schedule will be weighted according to its overall
contribution (using time as a reference) to progress of project implementation. These weights
will then be used to calculate the percentage of project progress along the entire time span of
the project. This is to provide a holistic view of the pace of implementation.
B. Framework for Compiling Activity List and Assigning Weights
4. As implementation activities and their corresponding weights will vary according to the
type of project, sector, and country, sector divisions or RMs will be responsible for determining
and including them in the project administration memorandum. The actual project
implementation progress of these activities should be reported regularly through the EA’s
quarterly project progress report. To ensure ADB-wide consistency, the following framework has
been established; its application will be monitored through the PPR.
1. Compilation of Activity List
5. Sector divisions or RMs concerned should identify major implementation activities and
include them in the implementation schedule, which is attached as an appendix in the report
and recommendation of the President (RRP). The implementation schedule should follow the
critical path of the project’s major activities in project implementation taking account of various
country, sector, and project constraints.
2. Assignment of Weights
6. Corresponding weights for each activity should be assigned to ensure that “project
progress" measures the percentage of achievement (non-financial except when the project has
credit components) for all events during the entire duration of the implementation schedule. To
avoid disproportionate assignment of weights, to the extent possible these should be evenly
distributed along the implementation schedule. When activities are concurrent, avoid “double
counting.”
3. Computation of Project Progress
7. Once all activities are identified and corresponding weights assigned, project progress
should be calculated using the following steps:
(i) Determine the actual percentage progress (non-financial) of each activity.

83
(ii) Multiply these percentages by the assigned weight of each activity to arrive at the
weighted progress.
(iii) Add up the resulting weighted progress of all activities to determine the project
progress.
An illustration of the calculation is shown below using a generic sample implementation

schedule.
Implementation Schedule with Activities and Weights
Yr1 Yr2 Yr3 Yr4 Yr5
a
ACTIVITIES
C
d
c
D
e f
1. Sum of all weights should equal 100 percent (a+b+c+d+e+f+g = 100%)

2. When calculating the percentage of “project progress,” all completed activities should be counted as accomplished, regardless of when they
were scheduled to be completed. For example, when calculating the percentage of “project progress” after year 3, if activity D is completed in
year 3 rather than in year 2, it should still be included in the computation.
3. Total weight of each activity is as follows: Activity A–a; Activity B–b; Activity C–c; Activity D–d; and Activity E–e + f +g
4. Project progress of a project is the summation of the actual percentage of progress for each activity multiplied by the total weight of each
activity.
11ProgRpts
84
Sample Implementation Schedule
(a) (b) (a) x (b)

Activities Year 1 Year 2 Year 3 Year 4 Assigned Actual Weighted
Weight Progress Progress
Establish PIU 5% 100% 6%
Establish Accreditation Board, etc. 5% 0% 0%
Appoint Staff and Budget 4% 75% 3%
Adopt Architecture Plans 2% 100% 2%
Shortlist Consulting Firms 6% 100% 6%
Prepare Fellowship Program 6% 76% 4%
Prepare Civil Works Tendering 30% 0% 0%
Civil Works: Classrooms, Dorms, etc. 6% 0% 0%
Procurement of Furniture and Equipment 16% 10% 2%
Field Work of Consultants 7% 0% 0%
Provide Fellowships 6% 0% 0%
Conduct Study Tours 6% 0% 0%
Provide Curriculum Standards 6% 0% 0%
Total Weight 100%
Imp. Progress 24%
(a) Assigned weight for each activity

(b) Actual progress of each activity
(a) x (b) weighted progress for each activity
Project progress = sum of all weighted progress for each activity
85
12. AUDIT REQUIREMENTS
A. General Principles
1. Article 14 (xi) of ADB's Articles of Agreement (the Charter) provides that ADB loan
proceeds be used only for the purposes for which the loan was approved with due attention to
economy and efficiency. To meet these requirements, executing agencies (EAs) are to submit
audited project accounts (APA) regularly during project implementation, and, in some cases,
until the loan has been fully repaid. In addition, EAs of revenue-earning entities are to submit
audited agency financial statements (AFS). This enables ADB to monitor loan use and satisfy
itself of the project entity's financial viability.
2. A management letter, by reporting entity, is also required. The management letter is a

report on the internal controls and operating procedures of the entity covering all aspects
included during the normal course of the audit.
3. ADB’s financial reporting and auditing requirements were reviewed in 2004 and adjusted
to reflect the ongoing Harmonization Agenda. ADB’s revised audit requirements as defined in
the Guidelines for the Financial Governance and Management of Investment Projects financed
by Asian Development Bank (the Financial Guidelines), are consistent with both the OECD-DAC
Good Practices Paper on Financial Reporting and Auditing (Dec 2002) and the Framework for
Collaboration Among Participating Multilateral Development Banks on Financial Reporting and
Auditing (Feb 2003).
B. Monitoring EA/IA’s Compliance with Submission
4. ADB will strictly monitor compliance with APA/AFS submissions and apply sanctions, as
follows:
(a) Three Months before the Due Date. A reminder will be sent to the EA/IA before
APA/AFS becomes due.
(b) On the Due Date. When the APA or AFS is not received by the due date, ADB
writes to the EA/IA stating that the APA or AFS is overdue and, if it is not
received within six months, requests for new contract awards and disbursement,
processing of new reimbursement, and issuance of new commitment letters will
not be processed.
(c) Six Months after Due Date. When the APA or AFS is not received within six
months after the due date, the sector division will hold processing of requests for
new contract awards and disbursement such as processing of new
reimbursement, and issuance of new commitment letters. The sector division will
inform the EA/IA of ADB’s actions and advises that if the situation is not
remedied within next six months, the loan may be suspended. The Operations
Coordination Division/Unit (OCD/U), Central Operations Services Office (COSO),
Loan Administration Division (CTLA), Office of the General Counsel (OGC) and
Office of Cofinancing Operation (OCO) if the project is co-financed should
likewise be informed.
(d) Twelve Months after the Due Date. When the APA/AFS is not received within
12 months after the due dates, the sector division determines whether the loan is
12AuditReqts
86
to be suspended and advises the OCD/U accordingly. With joint reference to the
Regulations,2 the regional department recommends loan suspension to the vice-
president for the region concerned and advises COSO, CTLA, OCO if the project
is co-financed, and OGC of the vice-president’s decision..
C. Accounting and Auditing
4. EPC will engage independent auditors acceptable to ADB to audit its annual financial
statements and annual project accounts. The scope of work for the auditors will be extended to
include audit of EPC’s compliance with ADB’s financial loan covenants. Audit reports will be
submitted to ADB together with the respective financial reports and the memorandum of issues
identified during the audit process. Annual financial reports will be prepared using international
financial reporting standards, and audits will be conducted using international standards on
auditing. EPC will maintain separate accounts for the Project. Within 6 months of the end of the
financial year, EPC will submit annual audited project accounts and annual audited financial
statements to ADB. The annual financial statements, which will be consolidated for all of EPC’s
operations, will record equity contributions by the Government of Samoa. 1
5. By 28 February each year (commencing 28 February 2008), EPC will also prepare and
provide ADB 5-year financial projections in a form agreed with ADB. The financial projections
will reflect updates in EPC’s investment plan.
1
Recorded equity contributions will include annual disbursed amounts of the $8 million grant from the Government
of Australia.
87
Power Sector Expansion Project

DETAILED STATUS OF COMPLIANCE WITH COVENANTS
(as of 4 June 2008)
Reference Description Timing Status

Particular Covenants
Financing Agreement (FA) (a) The Beneficiary/EPC shall carry out the
Art IV, Sec. 4.01; Project with due diligence and efficiency
and in conforming with sound
Project Agreement (PA) administrative, financial, engineering,
Art. II, Sec. 2.01 environmental and public utilities
practices.
(b) In the carrying out of the Project and
operation of the Project facilities, the
Beneficiary/EPC shall perform, or cause
to be performed, all obligations set forth
in schedule 5 to this Financing
Agreement.
FA Art. IV, Sec. 4.02; The Beneficiary/EPC shall make available

PA, Art. II, Section 2.02 promptly, as needed, the funds, facilities,
services, land and other resources which are
required, in addition to the proceeds of the
Loan and the Grant, and the JBIC Loan and
the Government of Australia Grant, for the
carrying out of the Project and for the
operation and maintenance of the Project
facilities.
PA, Art II, Section 2.03 (a) In the carrying out of the Project, EPC shall
employ competent and qualified consultants
and contractors, acceptable to ADB, to an
extent and upon terms and conditions
satisfactory to ADB.
PA, Art II, Section 2.03 (b) Except as ADB may otherwise agree, all
goods and services and other items of
expenditures to be financed out of the
proceeds of the Loan and the Grant, and the
JBIC Loan and the Government of Australia
Grant, shall be procured in accordance with
provisions of Sch 4 to the Financing
Agreement. ADB may refuse to finance a
contract where goods and services and other
items of expenditures have not been
procured under procedures substantially in
accordance with those agreed between the
Beneficiary and ADB or where the terms and
conditions of the contract are not satisfactory
to ADB.
FA, Art IV, Sec. 4.03 The Beneficiary shall enable ADB’s
PA, Section 2.10 representatives to inspect the Project, the
goods financed out of the proceeds of the
Loan and the Grant, and the JBIC Loan and
the Government of Australia Grant, and any
relevant records and documents.
FA, Art IV, Sec. 4.04 The Beneficiary shall take all action which
shall be necessary on its part to enable the
EPC to perform its obligations under the
13.Covenants
88

Project Agreement and shall not take or
permit any action which would interfere with
the performance of such obligations.
PA, Art II, Sec. 2.04 The EPC shall carry out the Project in
accordance with plans, design standards,
specifications, work schedules and
construction methods acceptable to ADB.
The EPC shall furnish, or cause to be
furnished, to ADB, promptly after their
preparation, such plans, design standards,
specifications and work schedules, and any
material modifications subsequently made
therein, in such detail as ADB shall
reasonably request.
FA, Art IV, Sec. 4.05 (a) The Beneficiary shall exercise its rights
under the Subsidiary Financing
Agreement in such a manner as to
protect the interests of the Beneficiary
and ADB and to accomplish the purposes
of the Loan and the Grant, and the JBIC
Loan and the Government of Australia
Grant.
(b) No rights or obligations under the
Subsidiary Financing Agreement shall be
assigned, amended, or waived without
the prior concurrence of ADB.
PA, Art II, Sec. 2.05 (a) The EPC shall take out and maintain
responsible insurers, or make other
arrangements satisfactory to ADB, for
insurance of the Project facilities to such
extent and against such risks and in
such amounts as shall be consistent
with sound practice;
(b) Without limiting the generality of the
foregoing, the EPC undertakes to
insure, or cause to be insured, the
goods to be imported for the Project and
to be financed out of the proceeds of
the Loan or the Grant against hazards
incident to the acquisition, transportation
and delivery thereof to the place and
use or installation, and for such
insurance any indemnity shall be
payable in a currency freely usable to
replace or repair such goods.
PA, Art II, Sec. 2.06 The EPC shall maintain, or cause to be
maintained, records and accounts adequate
to identify the goods and services and other
items of expenditures financed out of the
proceeds of the Loan and the Grant, to
disclose the use thereof in the Project, to
record the progress of the Project and to
reflect, in accordance with consistently
maintained sound accounting principles, its
operations and financial condition.
PA, Art II, Sec. 2.07 (a) ADB and EPC shall cooperate fully to
ensure that the purposes of the Loan
and the Grant, and the JBIC Loan and
89

the Government of Australia Grant, will
be accomplished.
(b) The EPC shall promptly inform ADB of
any condition which interferes with, or
threatens to interfere with, the progress
of the Project, the performance of its
obligations under this Project
Agreement, the Financing Agreement or
the Subsidiary Financing Agreement, or
the accomplishment of the purposes of
the Loan and the Grant, or the JBIC
Grant.
(c) ADB and the EPC shall from time to
time, at the request of either party,
exchange views through their
representatives with regard to any
matters relating to the Project, the EPC
and the Loan and the Grant, the JBIC
Grant.
PA, Art II, Sec. 2.08 (a) The EPC shall furnish to ADB all such
reports and information as ADB shall
reasonably request concerning: (i) the
Loan and the Grant, and the JBIC Loan
and the government of Australia Grant,
and the expenditure of the proceeds
thereof; (ii) the goods and services and
other items of expenditures financed out
of such proceeds; (iii) the Project; (iv)
the administration, operations and
financial condition of the EPC; and (v)
any other matters relating to the
purposes of the Loan and the Grant,
and the JBIC Loan and the Government
of Australia Grant;
(b) Without limiting the generality of the
foregoing, the EPC shall furnish to ADB
quarterly reports on the implementation
of the Project and on the operation and
management of the Project facilities, as
set forth in the Financing Agreement;
(c) Promptly after physical completion of
the Project, but in any event not later
than three (3) months thereafter or such
later date as ADB may agree for this
purpose, the EPC shall prepare and
furnish to ADB a report, in such form
and in such detail as ADB shall
reasonably request, on the execution
and initial operation of the Project,
including its cost, the performance by
the EPC of its obligations under this
project Agreement and the
accomplishment of the purposes of the
Loan and the Grant, and the JBIC Loan
and the Government of Australia Grant.
PA, Art II, Section 2.09 (a) The EPC shall: (i) maintain separate
accounts for the Project, including separate
accounts for the Loan and the Grant, and
13.Covenants
90

the JBIC Loan and the Government of
Australia Grant; (ii) have such accounts and
related financial statements (balance sheet,
statement of income and expenses, and
related statements) audited annually, in
accordance with appropriate auditing
standards consistently applied, by
independent auditors whose qualifications,
experience and terms of reference are
acceptable to ADB; and (iii) furnish to ADB,
promptly after their preparation but in any
event not later than six (6) months after the
close of the Fiscal Year to which they relate,
certified copies of such audited accounts
and financial statements and the report of
the auditors relating thereto (including the
auditors’ opinion on the use of the Loan and
the Grant proceeds and compliance with the
financial covenants of the Financing
Agreement, The EPC shall furnish to ADB
such information concerning such accounts
and financial statements and the audit
thereof as ADB shall from time to time
reasonably request.
PA, Art II, Section 2.09 (b) The EPC shall enable ADB, upon ADB’s
request, to discuss the EPC’s financial
statements and its financial affairs from time
to time with the auditors appointed by the
EPC pursuant to Section 2.09(a) hereabove,
and shall authorize and require any
representative of such auditors to participate
in any such discussions requested by ADB,
provided that any such discussion shall be
conducted only in the presence of an
authorized officer of the EPC unless the
EPC shall otherwise agree.
PA, Art II, Section 2.11 (a) The EPC shall, promptly as required,
take all action within its powers to
maintain its corporate existence, to
carry on its operations, and to acquire,
maintain and renew all rights,
properties, powers, privileges and
franchises which are necessary in the
carrying out of the Project or in the
conduct of its business.
(b) The EPC shall at all times conduct its
business in accordance with sound
administrative, financial, environmental
and public utilities practices, and under
the supervision of competent and
experienced management and
personnel;
(c) The EPC shall at all times operate and
maintain its plants, equipment and other
property, and from time to time,
promptly as needed make the
necessary repairs and renewals thereof,
all in accordance with sound
administrative, financial, engineering,
environmental, public utilities and
91

maintenance and operational practices.
PA, Art II, Section 2.12 Except as ADB may otherwise agree, the
EPC shall not sell, lease or otherwise
dispose of any of its assets which shall be
required for the efficient carrying on of its
operations or the disposal of which may
prejudice its ability to perform satisfactorily
any of its obligations under this Project
Agreement.
EPC shall apply the proceeds of the Loan
and the Grant, and the JBIC Loan and the
Government of Australia Grant, to the
financing of expenditures on the Project in
accordance with the provisions of the
Financing Agreement and this Project
Agreement, and shall ensure that all goods
and services and other items of expenditures
financed out of such proceeds are used
exclusively in the carrying out of the Project.
EPC shall duly perform all its obligations
under the Subsidiary Financing Agreement,
and shall not take, or concur in, any action
which would have the effect of assigning,
amending, abrogating or waiving any rights
or obligations of the parties under the
Subsidiary Financing Agrement.
Suspension; Cancellation; Acceleration of
Maturity
FA, Art. V, Sec. 5.01 The following are specified as additional

events for suspension of the right of the
Beneficiary to make withdrawals from (a) the
Loan Account for the purposes of Section
8.01 (m) of the Loan Regulations, and (b) the
Grant Account for the purposes of Section
8.01 (k) of the Grant Regulations:
(a) either the Beneficiary or the EPC shall

have failed to perform any of its
respective obligations under the
Subsidiary Financing Agreement;
(b) the governing law or any provision in

the Subsidiary Financing Agreement
shall have been repealed, suspended
or amended in any manner which in
the reasonable opinion of ADB upon
consultation with the Beneficiary will or
may adversely affect the carrying out
of the Project or the operation of the
Project facilities;
(c) the JBIC Loan shall have become

liable for suspension or cancellation
or shall have become repayable prior
to its agreed maturity date; and
(d) The Government of Australia Grant
13.Covenants
92

shall have become liable for
suspension or cancellation or shall
have become repayable prior to its
agreed maturity date.
FA, Art V, Sec. 5.02. The following are specified as additional

events for acceleration of maturity of the Loan
for the purposes of Section 8.07(d) of the
Loan Regulations: the events specified in
Section 5.01 of this Financing Agreement
shall have occurred.
Effectiveness Conditions -
FA, Art. VI, Sec 6.01. The following are specified as additional
conditions to the effectiveness of this
Financing Agreement for the purposes of
Section 9.01(f) of the Loan Regulations and
Section 9.01 (e) of the Grant Regulations,
respectively:
(a) the Beneficiary shall have settled all

electricity Arrears of Government agencies
and Government – owned entities as of 30
September 2007;
(b) the Beneficiary shall have entered into

the Subsidiary Financing Agreement with
the EPC, in form and substance
satisfactory to ADB and providing inter
alia:
(i) for the re-lending of the of the

proceeds of the Loan, the Grant
and the JBIC loan to the EPC in
two tranches; the first tranche
having a 25 year term (including a
grace period of 5 years), an interest
rate of 6.5% and a principal amount
equal to the relending to EPC for
the financing of subprojects
completed prior to June 30,2012;
the second tranche having a 28
year term (including a grace period
of 8 years) interest rate of 6.5% and
a principal amount equal to the
remainder of the Loan, the Grant
and the JBIC Loan less the
principal amount of the first tranche;
(ii) for the transfer of the interest on the
proceeds of the Grant to the Clean
Energy Fund ( and of which the
Clean Development Mechanism
Sub-Fund is part of the Clean
Energy Fund);
(iii) that the annual aggregate
disbursements from the
Government of Australia Grant is
treated as an equity in the EPC’s
annual financial statements and
93

audited accounts and that this
equity shall be reflected as part of
the EPC’s share capital when the
EPC is registered as a limited
company; and
(iv) that the Beneficiary shall establish
an incentive scheme for cancelling
repayment by the EPC of the Grant
relent by the Beneficiary, through
treating such portion of the relent
Grant as a grant from the
Beneficiary to the EPC (up to 7% of
Project costs or a ceiling of $10
million) on the timely and to-budget
implementation of the Subproject
by the EPC;
(c) the Beneficiary shall have established the

PSC;
(d) the Beneficiary shall, and shall have

cause the EPC to, have established the
PMC;
(e) the Beneficiary shall, and shall have

cause the EPC to, have established the
PMU and the EPC shall have, by the
Effective Date, communicated to the
Beneficiary and ADB; (i) confirmation of
the formal establishment of the PMU; and
(ii) appointment on a full-time basis in the
PMU of a project manager, a project
accountant, a generation engineer, a
transmission engineer, a power systems
planner, and a public relations and
community liaison specialist;
(f) the Beneficiary shall, and shall have

cause the EPC, to have established the
ESU;
(g) the agreement between the Beneficiary

and JBIC for the JBIC Loan shall have
been duly executed and delivered on
behalf of the Beneficiary and JBIC and is
fully effective and binding upon the
parties thereto in accordance with its
terms, subject only to the effectiveness of
this Financing Agreement; and
(h) the Beneficiary shall have obtained a

commitment from the Government of
Australia with respect to the availability of
the Government of Australia Grant for the
Project.
FA, Art. VI, Sec. 6.02. The following is specified as an additional

matter, for the purposes of Section 9.02 (d) of
the Loan Regulations and Section 9.02 of the
Grant Regulations, to be included in the
13.Covenants
94

opinion or opinions to be furnished to ADB:
that the Subsidiary Financing Agreement has
been duly authorized or ratified by, and
executed and delivered on behalf of, the
Beneficiary and the EPC and is legally
binding upon the Beneficiary and the EPC in
accordance with its terms, subject only to the
effectiveness of this Financing Agreement.
FA, Art. VI, Sec. 6.03. A date ninety (90) days after the date of this First extension –
Financing Agreement is specified for the Second extension -
effectiveness of the Financing Agreement for
the purposes of Section 9.04 of the Loan
Regulations and Section 9.04 of the Grant
Regulations.
FA, Sch. 3A, Para 6 Retroactive Financing – Withdrawals from

the Loan Account may be made for
reimbursement of reasonable expenditures
incurred under the Project before the
Effective Date, but not earlier than twelve (12)
months before the date of this Financing
Agreement in connection with items to be
retroactively financed, subject to a maximum
amount equivalent to 20 percent of the Loan.
FA, Sch. 3A, Para. 7 Condition of Withdrawals from Loan

Account –
(a) The Government of Australia Grant shall
have been transferred to an account at
ADB and be available for the Project;
(b) Prior to the commencement of civil
works for any subproject facility: (i) the
Planning and Urban Management
agency of the Ministry of Natural
Resources and Environment shall have
approved the application for
development consent of the PEAR for
any such Subproject facility; and (ii)
ADB shall have approved the IEE for
any such Subproject facility;
(c) Notwithstanding any other provision of
this Financing Agreement, no
withdrawals shall be made from the
Loan Account for the Vaita’i Hydropower
Subproject until the Beneficiary shall
have entered into a legally binding
agreement, or obtained a court order,
for the compensation of the relevant
customary landowners for the
acquisition of the requisite land for the
Subproject, in the event where the
Vaita’i Hydropower subproject is
selected as a Subproject. Such
agreement shall include terms and
conditions with respect to the 20 meter-
wide road reserve required to
accommodate the existing access road
from Sili Village to the Vaita’i
Hydropower Subproject site, inclusive of
95

shoulders and table drains.
Project Execution and Implementation
Arrangements -
FA, Schedule 5 The MOF shall, as the Project Executing
Para 1. Agency, establish the PSC to provide overall
direction for the project. The Chief Executive
Officer of the MOF shall chair the PSC.
Other PSC members are the Chief Executive
Officer of the Ministry of Commerce, Industry
and Labour, the Chief Executive Officer of the
Ministry of Natural Resources and
Environment, the Chief Executive Officer of
the Ministry of Women, Community and
Social Development, the Chief Executive
Officer of Samoa Water Authority, the
Attorney General and the General Manager
of the EPC. The PSC shall be convened at
least on a quarterly basis, commencing within
3 months from the Effective Date, until
Project completion.
FA, Schedule 5 The EPC shall, as the Project Implementing

Para 2. Agency, establish:
PA, Schedule, Para. 1
a) The PMC to provide coordination
between the Project and non-Project activities
within the EPC. The General Manager of
EPC shall chair the PMC. Other PMC
members are the managers of each of the
departments of the EPC and the project
manager for the Project. The PMC shall be
convened on a weekly basis, commencing
the Effective Date, until 31 December 2009
and thereafter on a bimonthly basis until
completion of the Project;
b) The PMU for the day-to-day

management and implementation of the
Project. The PMU shall be responsible for
project planning, monitoring and reporting,
and cost and quality control, including: (i)
project management and administration; (ii)
planning and implementing cost-effective
and sustainable infrastructure investments to
meet consumer demand; (iii) maintaining
Project accounts; (iv) overseeing
procurement procedures to ensure
compliance with the Beneficiary’s and ADB’s
policies and procedures; (v) liaising with ADB
for quarterly Project updates and other
reporting; and (vi) preparing the Project
completion report of the Beneficiary; and
c) The ESU in the PMU to be responsible for

all environmental and social matters relating
to the Project. This includes preparation of
the IEE, the PEAR, the EIA, the EMMP, the
EARF and the LARP, in each case, as
required for any Subproject. The ESU shall
be staffed with an environment officer and a
13.Covenants
96

land acquisition and resettlement officer, in
each case, with qualifications and experience
acceptable to ADB.
FA, Schedule 5 The Beneficiary shall, and shall cause the

Para 3. EPC to, ensure that the PMU is adequately
PA, Schedule, Para. 2 staffed and resourced throughout the Project
implementation period for the timely and
effective implementation of the Project,
including the appointment of a project
manager for the PMU for the duration of the
Project.
FA, Schedule 5 Subproject Selection and Implementation -
Para 4(a)
PA, Schedule, Para. 3 The Beneficiary shall, and shall cause the
EPC to, ensure that all candidate Subprojects
are selected and approved in accordance
with the eligibility criteria and procedures
agreed between the Beneficiary and ADB and
as set out below:
(i) the Subproject contributes to the

objectives of the power sector
development plan of the Government, is
identified as a high priority project in
EPC’s annual business plan and is
included in the EPC’s investment plan;
(ii) the Subproject is technically feasible

and meets the Government’s technical
standards and requirements;
(iii) the Subproject is justified as the most

feasible Subproject to achieve the
stated objectives and is shown to be
least cost among feasible alternatives;
(iv) the LARP shall have been prepared for

the Subproject in accordance with the
LARF, if required, and EPC shall have
submitted written confirmation to ADB
that the landowner and/or lessee in the
case of freehold and state-owned land,
or in the case customary land, the
matai, acting on behalf of Affected
Persons under the Subproject, is
agreeable to the land acquisition and
resettlement plan terms and conditions;
(v) an environmental screening shall have

been conducted for the Subproject and
the IEE, the PEAR, and the EMMP shall
have been prepared for the Subproject,
in each case, in accordance with the
provisions of the EARF. No category A
projects shall be financed under the
Project;
(vi) ADB determines that the EPC has the

necessary staffing, implementation, and
97

financial management capacity to
implement the Subproject or, in the
alternative, the EPC can provide
specific assurances that assessed
shortcomings can be rectified, such as
by adding qualified staff or providing
timely in-service training;
(vii) The Subproject’s implementation

timeframe is reasonable, and surveys
and design can be prepared, reviewed,
safeguard process and procedures
followed, and implemented within the
Project implementation period;
(viii) the financing plan clearly identifies

confirmed sources of financing,
including counterpart financing, and
includes the provision of budgetary
resources to meet counterpart funding
requirements for capital expenditures
during the construction phase,
resettlement costs, as applicable,
environmental management costs, loan
repayment requirements and routine
operations and maintenance costs;
(ix) the Subproject will not adversely impact

on the EPC’s ability to meet its financial
covenants under the loan; and
(x) all required Governmental approvals

shall have been obtained.

Para 4(b) EPC to, ensure that the Subprojects selected
PA, Schedule, Para 3(b) in accordance with the criteria referred to
above are approved and processed in
accordance with the arrangements set out
below:
(i) the PMU will identify candidate

Subprojects meeting the criteria set
forth in paragraph 4 above and will
obtain approval from the EPC board to
assess the feasibility of the candidate
Subprojects and inform the PSC of the
pending Subprojects feasibility study;
(ii) the PMU will then prepare a feasibility

study for each candidate Subprojects.
The candidate Subproject feasibility
report will, among others, provide
technical analysis and description,
subproject rationale, scope and
components, cost estimates and
financing plan, implementation
arrangements, an environmental
13.Covenants
98

assessment, and a land acquisition and
resettlement assessment. The
feasibility report will also contain an
update of the EPC’s investment plan
and an analysis of the candidate
Subproject’s impacts on the EPC’s 5-
year financial projections, key financial
ratios, and compliance with this
Financing Agreement;
(iii) each feasibility report will submitted to

ADB for review and approval and shall
contain sufficient evidence of the
candidate Subproject’s eligibility under
the agreed criteria and shall be
prepared in accordance with the detail
and quality required to enable ADB to
assess the viability and sustainability of
the candidate Subproject. The
feasibility reports will be include a set of
relevant benchmark and performance
indicators for the Subproject which will
be monitored though progress reports;
and
(iv) after ADB has endorsed the feasibility

study, the PMU will submit the feasibility
study to the EPC board and the PSC for
review and approval. Implementation of
a candidate Subproject may only
proceed following the endorsement of
the candidate Subproject feasibility
report by the PSC, the EPC board and
ADB.

Para 4(c) EPC to. Ensure that all documentation
PA, Schedule, Para 3© relating to the Subprojects are kept for a
minimum of five years from the date of the
project completion report for each such
Subproject and made available to ADB upon
request.
FA, Schedule 5 The Beneficiary shall establish an incentive

Para 5. scheme for canceling repayment by the EPC
of the Grant relent by the Beneficiary, through
treating such portion of the relent Grant as a
grant from the Beneficiary to the EPC (up to
7% of Project costs or a ceiling of $10 million)
on the timely and to-budget implementation of
the Subprojects by the EPC, in accordance
with the provisions of the Subsidiary
Financing Agreement referred to in Section
6.01 of this Financing Agreement.
FA, Schedule 5 Counterpart Financing -

Para 6.
PA, Schedule, Para. 4 Without limiting the generally of Section 4.02
of the Financing Agreement, the Beneficiary
shall, and shall cause the EPC to, take all
99

necessary measures to ensure that sufficient
counterpart funds are made available for and
provided to the Project in a timely manner to
support effective Project implementation. In
this regard, the Beneficiary shall, and shall
cause EPC to, make adequate budgetary
allocations for each Fiscal year as required
to: (a) implement the mitigation measures
and monitoring requirements of each IEE and
EMMP for the Project in each case, in
compliance with the EARF; and (b)
implement each LARP for all Subprojects in
compliance with the LARF, including
providing requisite counterpart funds for land
acquisition, resettlement and monitoring
activities under any such LARP. The
Beneficiary shall, and shall cause the EPC to,
meet any unforeseen obligations in excess of
the LARP budget in order to satisfy land
acquisition and resettlement objectives.
FA, Schedule 5 Regulatory Reform and Measures -

Para 7.
The Beneficiary shall establish a regulatory
framework for the power sector under its
reform program for the sector. This includes:
(a) the Government submitting a draft

Electricity act and draft amendments to the
Electric Power Corporation Act 1980 for
Cabinet and Parliamentary consideration by
31 December 2009;
(b) following approval by Cabinet and
Parliamentary of the draft legislation,
approving provision of resource allocations
for a power sector regulator for the relevant
Fiscal Year; and
(c) appointing the power sector regulator for
the power sector by 31 December 2010.
FA, Schedule 5 The Beneficiary shall have settled all

Para 8. electricity Arrears of Government agencies
and Government-owned entities as of 30 April
2008 by 31 July 2008.

Para 9 EPC to, ensure that pre-payment meters are
PA, Schedule, Para. 5 installed on;
(a) all new electricity connections by 30 June

2008; and
(b) a minimum of 75% of all electricity
connections by 31 December 2012.
Where the Beneficiary has determined that

pre-payment meters shall not be installed on
certain Government agencies and
Government-owned entities providing basic
government services, the Beneficiary shall
make a budgetary allocation in each Fiscal
13.Covenants
100

Year for the cost of providing power for these
services and pay such cost directly to the
EPC.

Para 10. EPC to, implement the Disconnection Policy,
PA, Schedule, Para 6 the Prepayment Policy and the Write-Off
Policy in accordance with their terms.
FA, Schedule 5 Financial Ratios, Audits and Financial

Para 11 (a) Projections -
PA, Schedule, Para 7
The Beneficiary shall, and shall cause the
EPC to, produce:
(i) for each of its fiscal years from Fiscal

Year 2008 to Fiscal Year 2015, cash
from internal sources equivalent to
not less than 12% of the annual
average of the EPC’s capital
expenditures incurred, or expected to
be incurred, for that Fiscal Year, the
previous Fiscal Year and the next
following Fiscal Year; and
(ii) for each Fiscal Year after Fiscal Year
2015, cash from internal sources
equivalent to not less than 20% of the
annual average of the EPC’s capital
expenditures incurred, or expected to
be incurred, for that Fiscal Year, the
previous Fiscal Year, and the next
following Fiscal Year.
FA, Schedule 5 Before 28 February in each of EPC’s Fiscal

Para 11 (b) Years, the Beneficiary shall, and shall cause
PA, schedule, Para 7(b) the EPC to, on the basis of forecasts
prepared by the EPC and satisfactory to
ADB: (i) review whether it will meet the
requirements set forth in subparagraph (a)
above in respect of such Fiscal Year and the
next following Fiscal Year; and (ii) provide
ADB a copy of such review upon its
completion.
FA, Schedule 5 If any such review pursuant to subparagraph

Para 11 (c) (b) above shows that the EPC would not
PA, Schedule, Para 7© meet the requirements set forth in paragraph
(a) for those EPC’s Fiscal Years covered by
such review, the Beneficiary shall promptly
take or cause the EPC to take all necessary
measures (including without limitation,
adjustments of the structure or levels of the
EPC’s electricity tariffs and other charges) in
order to meet such requirements.
FA, Schedule 5 The Beneficiary shall cause the EPC not to

Para 11 (d) incur any debt unless a reasonable forecast
101

PA, Schedule, Para 7(d) of the revenues and expenditures of the EPC
shows that the estimated free cash flows of
the EPC for each Fiscal Year during the term
of the debt to be incurred shall be at least 1.3
times the estimated debt service
requirements of the EPC in such Fiscal Year
on all debts of the EPC, including the debt to
be incurred, and no event has occurred since
the date of the forecast that has, or may
reasonably be expected in the future to have,
a material adverse effect on the financial
condition of future operating results of the
EPC.
FA, Schedule 5 For the purposes of this paragraph:

Para 11 (e)
PA, Schedule, Para 7(e) i. The term “capital expenditures” means
all expenditures incurred on account of
fixed assets, including interest charged
to construction financed under any
contract, but excludes (I) interest
charged to construction subject to cash
settlement in the Fiscal Year in which
such interest is charged; and (ii) capital
expenditures funded entirely by the
Government under a community
service obligation;
ii. The term “cash from internal sources”

means the difference between: (A) the
sum of cash flows from all sources
related to operations, plus cash
generated from consumer deposits and
consumer advances of any kind, sale
of assets, cash yield of interest on
investments, payments received by the
EPC from the Beneficiary for the
refund of all or part of the EPC’s Value
added Goods and Services Tax
(VAGST) expense, and net non-
operating income; and (B) the sum of
all expenses related to operations,
including administration, adequate
maintenance, selling expense, and
taxes and payments in lieu of taxes
(excluding provision for depreciation
and other non-cash operating
charges), debt service requirements,
all cash dividends paid and other cash
distributions of surplus, and other cash
outflows other than capital
expenditures;
iii. The term “community service

obligation” means an obligation under
Section 9 of the Public Bodies
(Performance and Accountability) Act
2001 of the Beneficiary;
iv. The term “debt” means any
13.Covenants
102

indebtedness of the EPC maturing by
its terms more than one year after the
date on which it is originally incurred,
and debt shall be deemed to be
incurred: (a) under a contract or
agreement or other instrument
providing for such debt or for the
modification of its terms of payment on
the date of such contract, agreement
or instrument; and (b) under a
guarantee agreement, on the date the
agreement providing for such
guarantee has been entered into;
v. The term “debt service requirements”

means the aggregate amount of
repayments (including sinking fund
payments, if any) of, and interest and
other charges on, debt, excluding
interest charged to construction and
financed from loans;
vi. The term “free cash flows” means the

difference between: (A) the sum of
cash flows from all sources related to
operations, plus cash generated from
consumer deposits and consumer
advances of any kind, sale of assets,
cash yield of interest on investments,
and net non-operating income; and (B)
the sum of all expenses related to
operations, including administration,
adequate maintenance, selling
expenses, and taxes and payments in
lieu of taxes (excluding provision for
depreciation and other non-cash
operating charges), but excluding
interest and other charges on debt;
and
vii. The term “net non-operating income”

means the difference between: (A)
revenues from all sources other than
those related to operations after
making adequate provisions for
uncollectible debts, and excluding
payments made to the EPC by the
Beneficiary under its community
service obligation for the acquisition of
fixed assets; and (B) expenses,
including taxes and payments in lieu of
taxes, incurred in the generation of
revenues in (A) above; and
(viii) The term “reasonable forecast” means

a forecast prepared by the EPC not
earlier than nine months prior to the
incurrence of the debt in question,
which ADB, the Beneficiary and the
EPC accept as reasonable, and to
103

which ADB has notified the Borrower
of its acceptability.
Para 12. EPC to, maintain, from the Effective Date,
PA, Schedule, Para 8 accounts receivables equivalent to no more
than two months’ equivalent of annual billing
for power generation and supply and for all
other services provided by EPC.

Para 13. EPC to, engage independent auditors
PA, Schedule, Para 9 acceptable ADB to audit its annual financial
statements and annual Projects accounts (the
EPC shall maintain separate accounts for the
Project), including assessing EPC’s
compliance during the previous Fiscal year
with the financial covenants set forth in
paragraph 11 above. The terms of reference
for the independent auditors shall provide to
ADB for review prior to their engagement.
Annual financial statements shall be
prepared, and audits shall be conducted,
based on international standards. Audited
financial statements of EPC and audited
Project accounts shall be submitted to ADB
within six months of the end of a Fiscal Year.
The annual financial statements of EPC shall
be consolidated for all of EPC’s operations.
FA, Schedule 5 Change in Ownership/Operation and

Para 14. Maintenance -
In the event that the Beneficiary wishes to

change the ownership structure of the EPC or
its business, or the control of the operation
and maintenance of the Project facilities,
where such change may have an adverse
effect on the EPC’s ability to perform its
obligations in respect of the Project, the
Financing Agreement or the Project
Agreement, the Beneficiary shall obtain the
prior written consent of ADB. Where any
such change is approved by ADB the
Beneficiary shall ensure that the change is
carried out in a transparent manner and does
not affect repayment of the Loan. Depending
on the nature of the change, ADB shall have
the right to modify the repayment terms of the
Loan.
FA, Schedule 5 Land Acquisition and Resettlement -

Para 15.
PA, Schedule, Para 11 The Beneficiary shall, prior to the
commencement of civil works for any Project
facility, acquire all land and property, together
with all rights, easements, privileges and
approvals pertaining to such land and
property at any Subproject site as shall be
necessary or appropriate to implement the
Project and in accordance with the LARP, the
13.Covenants
104

LARP, all applicable laws and regulations in
Samoa (including the Taking of Land Act
(1964), and ADB’s Policy on Involuntary
Resettlement (1995). In case of
discrepancies between the applicable laws
and regulations and ADB’s Policy on
Involuntary Resettlement, ADB’s Policy on
Involuntary Resettlement shall apply to the
Subprojects financed by ADB, the
Government of Australia and /or JBIC.

Para 16. EPC to, ensure that, prior to the
PA, Schedule, Para. 10 commencement of any civil works for any
Project facility; (a) all land acquisition,
compensation, resettlement and rehabilitation
activities, in each case, as specified in the
relevant LARP have been completed; and (b)
the Subproject site is free and clear of all
obstructions; and (c) ADB shall have issued
its “no-objection” prior to the award of civil
works contracts.

Para 17. EPC to: (a) ensure that any land acquisition,
compensation, relocation, resettlement and
rehabilitation, as applicable, with respect to
the Project is carried out in accordance with
the LARP, the LARF, all applicable laws and
regulations in Samoa (including the Taking of
Land Act (1964), and ADB’s Policy on
Involuntary Resettlement; and (b) be
responsible for the compensation of Affected
People. In case of discrepancies between
the applicable laws and regulations and
ADB’s Policy on Involuntary Resettlement,
ADB’s Policy on Involuntary Resettlement
shall apply to the Subprojects financed by
ADB, the Government of Australia and/or
JBIC.

Para 18 EPC to, ensure that: (a) in the event there is
PA, Schedule, Para 12 any significant change in the design of any
Subproject covered by a LARP or any
substantial changes in resettlement impacts,
the relevant LARP is: (i) updated based on a
detailed measurement survey, (ii) disclosed
to Affected People, and (iii) subsequently
provided to ADB for its approval prior to
commencement of related civil works; (b)
there are requirements in the civil works
contracts with the EPC for the contractors to
comply with each LARP, as applicable; and
(c) the ESU supervises and monitors closely
civil works contractors to ensure compliance
with the requirements of each LARP and their
respective terms. Upon the completion of
resettlement activities for any LARP, the EPC
shall prepare and provide to ADB a
105

resettlement completion report for each such
Subproject covered by a LARP.

Para 19 EPC to, through the ESU: (a) establish a
PA, Schedule, Para 13 register to record and monitor land acquired
for the Project on both a temporary and
permanent basis: and (b) keep complete
records on consultations and grievances
relating to land acquisition and resettlement.
The EPC shall make the register and records
available to ADB upon request.
FA, Schedule 5 Environment -

Para 20. The Beneficiary shall, and shall cause the
PA, Schedule, Para 14 EPC to: (a) design, construct, operate,
maintain and monitor the Project facilities in
accordance with: (i) all applicable laws and
regulations in Samoa (including the Planning
and Urban Management Act (2004), (ii)
ADB’s Environment Policy (2002), and (ii) the
EARF and each EMMP; (b) minimize any
adverse environmental impacts arising from
the Project by implementing the mitigation
measures prescribed in each IEE, PEAR and
EIA, as applicable; and (c) ensure that the
EMMP prepared for any Subproject is: (i)
incorporated into the design of each
Subproject, (ii) implemented in accordance
with its terms during the construction,
operation and maintenance of each
Subproject, and (iii) updated at such time
when the detailed engineering design
becomes available. The EPC shall also
make available to the public and other
interested parties any IEE and/or LARP for a
Subproject. In case of discrepancies
between the applicable laws and regulations
and ADB’s Environment Policy, ADB’s
Environment Policy shall apply to the
Subprojects financed by ADB, the
Government of Australia and/ or JBIC.

Para 21 EPC to, ensure that: (a) civil works
PA, Schedule, Para 15 contractors: (i) comply with all environmental
impact mitigation requirements set out in
each EMMP, and (ii) prepare, on a quarterly
basis, mitigation progress and monitoring
checklists showing the progress made on
mitigation measures contained in the relevant
EMMP; and (b) the ESU monitors closely civil
works contractors to ensure compliance with
the environmental impact mitigation
requirements identified in the IEE and EMMP,
as applicable.

Para 22 EPC to, ensure that, prior to the
PA, Schedule, Para 16 commencement of civil works for any
13.Covenants
106

Subproject facility: (a) the Planning and
Urban Management Agency of the Ministry of
Natural Resources and Environment shall
have approved the application for
development consent of the PEAR for any
such Subproject facility; and (b) ADB shall
have approved the IEE for any such
Subproject facility.
FA, Schedule 5 Employment, Gender and Health -

Para 23. The Beneficiary shall, and shall cause the
PA, Schedule, Para 17 EPC to, advise the contractors to maximize
their employment of local persons who meet
the job requirements for the construction of
the Project facilities. The contractors shall be
required to give due consideration to the
manner in which women in the communities
of the Project area can contribute to the
construction, operation and maintenance of
the Project facilities.

Para 24 EPC to, ensure that: (a) there is no
PA, Schedule, Para. 18 differential payment between men and
women fro work of equal value; and (b) civil
works contractors do not employ child labor in
Project construction activities.

Para 25 EPC to, ensure that the civil works contracts
PA Schedule, Para 19 include mandatory provisions on health,
sanitation and appropriate working
conditions, including provisions on health and
safety and accommodation for construction
workers at campsites during the construction
period. This includes ensuring that: (a) the
contractors disseminate information to its
employees on the risks of socially and
sexually transmitted diseases, including
HIV/AIDS; and (b) the appropriate entities
disseminate information and education to
members of the local community, particularly
women, living in the areas surrounding the
Project facilities during Project
implementation and operation of the Project
facilities.
FA, Schedule 5 Anti-Corruption -

Para 26 The Beneficiary shall, and shall cause the
PA, Schedule, Para 20 EPC to, comply with ADB’s Anticorruption
Policy (1998). The Beneficiary and the EPC
agree: (a) that ADB reserves the right to
investigate, directly or though its agents, any
alleged corrupt, fraudulent, collusive or
coercive practices relating to the Project; and
(b) to cooperate fully with any such
investigation and extend all necessary
assistance, including providing access to all
relevant information and records, for the
satisfactory completion of any such
107

investigation. The EPC shall also; (a)
conduct periodic inspections on the
contractors’ activities relating to fund
withdrawals and settlements; and (b) ensure
that all contracts financed by ADB in
connection with the Project include provisions
specifying the right of ADB to audit and
examine the records and accounts of all
contractors, suppliers, consultants and other
service providers of the Project.
FA, Schedule 5 Project Review; Monitoring and Reporting-

Para 27 Within one month of the later of: (a) the
PA, Schedule, Para 21 Effective Date; or (b) the fielding of Project
implementation consultants, the Beneficiary,
the EPC and ADB shall jointly undertake a
Project inception mission for the purpose of
identifying potential Project-related risks and
determining compliance with environmental
and social requirements for the Project.
FA, Schedule 5 Project Reviews Dec 2008

Para 28 Within six months of the Project inception
PA, Schedule, Para 22 mission and for the initial three years of the
Project implementation period, the
Beneficiary, the EPC and ADB shall jointly
undertake a semi-annual review of the
Project. Each semi-annual review shall
assess the Project’s achievements are
progress in implementing the Project in order
to identify any difficulties or constraints
encountered in implementing the Project and
to make adjustments, if necessary for the
remaining Project implementation period.
Specifically, the semi-annual reviews shall:
(a) evaluate the Project scope and costs,
implementation arrangements, resettlements
matters, and status of achieving scheduled
targets; (b) identify additional Project-related
risks; and (c) review progress in
implementing the EMMP of core Subprojects
and the EARF. The Beneficiary, the EPC and
ADB shall also discuss the EPC’s progress in
achieving operational efficiencies as well as
EPC’s financial performance. Within four
years of the Effective Date, the Beneficiary,
EPC and ADB shall jointly undertake a mid-
term review for reviewing the Project
implementation progress.
FA, Schedule 5 Project Performance Monitoring System Dec 2008

Para 29 (PPMS)
PA, Schedule, Para 23 Within six months of the Effective Date, the
Beneficiary shall, and shall cause the EPC to,
establish a PPMS, acceptable to ADB. The
PPMS shall include for the Project and as
applicable for each Subproject indicators as
set forth in the design and monitoring
framework for the Project and other indicators
as required for monitoring compliance with
13.Covenants
108

each of the EARF (including each EMMP),
the LARF, and the operational efficiency,
financial position and financial projections of
the EPC. The EPC shall monitor the PPMS
indicators on a quarterly basis to determine
the efficiency and effectiveness of the Project
and its impacts.
FA, Schedule 5 Quarterly Reports -

Para 30 The Beneficiary shall, and shall cause the
PA Section 2.08(b) EPC to, provide to ADB quarterly reports,
PA, Schedule, Para 24 which shall indicate, among other things,
progress made and problems encountered
during the quarter under review, steps taken
or proposed to be taken to remedy these
problems, and proposed program of activities
and expected progress during the following
quarter. The quarterly reports shall also
provide: (a) on individual Subprojects, in
form and substance satisfactory to ADB, a
detailed description of: (i) the progress of the
Subproject, (ii) any difficulties encountered
and/or anticipated, together with proposed
corrective actions, (iii) the progress in
implementing the LARP, if applicable, and the
EMMP for the core Subproject and the EARF,
and (iv) a summary of financial accounts,
including Subproject expenditures during the
previous quarter, year to date, and total
Subproject expenditures to date; (b) the key
indicators set forth in the PMMS; (c) updates
to the Procurement Plan, as appropriate ; and
(d) the amounts of the interest on the
proceeds of the Grant to be transferred to the
Clean Energy Fund (and of which the Clean
Development Mechanism Sub-Fund is part of
the Clean Energy Fund). Within three
months of completing any Subproject, EPC
shall submit to ADB a Subproject completion
report, together with an assessment of the
execution and operation of the Subproject,
status of compliance with loan covenants and
the results of project outcomes and
performance. The Beneficiary shall, and shall
cause the MOF to, provide to ADB annual
statements on the amounts that have been
transferred to the Clean Energy Fund
pursuant to (d) above.
109
14. ANTI-CORRUPTION GUIDELINES
A. Anticorruption Policy
1. ADB defines corruption as the abuse of public or private office for personal gain.
This means any behavior in which people in the public or private sectors improperly and
unlawfully enrich themselves or those close to them, or induce others to do so, by
misusing their position. The purpose of ADB’s Anticorruption Policy, approved in July
1998, is to reduce the burden corruption exacts from the governments and economies of
the region. The policy has three objectives:
 support competitive markets and effective public administration,
 support explicit anticorruption efforts, and
 ensure ADB-financed projects and its staff adhere to the highest ethical
standards.
2. ADB’s anticorruption policy (ref: http://www.adb.org/Documents/Policies/

Anticorruption) requires Borrowers (including beneficiaries of Bank loans), as well as
bidders/suppliers/contractors under ADB-financed contracts observe the highest
standards of ethics during the procurement and execution of such contracts.
1. In pursuance of the Policy, in the context of the guidelines, ADB:
(a) defines the terms set forth below as follows:
(i) “corrupt practice” means the offering, giving, receiving, or

soliciting, directly or indirectly, anything of value to influence improperly
the actions of another party;
(ii) “fraudulent practice” means any act or omission, including a

misrepresentation, that knowingly or recklessly misleads, or attempts to
mislead, a party to obtain a financial or other benefit or to avoid an
obligation;
(iii) “coercive practice” means impairing or harming, or threatening to

impair or harm, directly or indirectly, any party or the property of the party
to influence improperly the actions of a party;
(iv) “collusive practice” means an arrangement between two or more

parties designed to achieve an improper purpose, including influencing
improperly the actions of another party.
(b) will reject a proposal for award if it determines that the bidder
recommended for award has, directly or through an agent, engaged in
corrupt, fraudulent, collusive, or coercive practices in competing for a
contract;
110
(c) will cancel the portion of the financing allocated to a contract if it

determines at any time that representatives of the borrower or of a
beneficiary of ADB-financing engaged in corrupt, fraudulent, collusive or
coercive practices during the procurement or the execution of that
contract, without the borrower having taken timely and appropriate action
satisfactory to ADB to remedy the situation;
(d) will sanction a party or its successor, including declaring ineligible, either
indefinitely or for a stated period of time, to participate in ADB-financed
activities if it at any time determines that the firm has, directly or through
an agent, engaged in corrupt, fraudulent, collusive or coercive practices in
competing for, or in executing an ADB-financed contract; and
(e) will have the right to require that a provision be included in bidding
documents and in contracts financed by ADB requiring bidders, suppliers
and contractors to permit ADB or its representatives to inspect their
accounts and records and other documents relating to the bid submission
and contract performance and to have them audited by auditors
appointed by ADB.
B. How to Report Fraud or Corruption to ADB
2. To report allegations of fraud and corruption, please contact the Integrity Division
of the Office of the General auditor (OGAI). You should provide the names of persons
involved, as well as any corroborating evidence. Correspondence should be marked
“Strictly Confidential”. OGAI will screen any documentation or allegation or evidence of
fraud or corruption to determine whether it warrants further investigation. OGAI will treat
sources of allegations of fraud or corruption with the utmost confidentiality and
discretion. OGAI may be reached by email, telephone or facsimile at:
Email: anticorruption@adb.org
Telephone: (632) 632-5004
Facsimile: (632) 636-2152
Information concerning the identity of a complainant is strictly controlled and will not be
released to other ADB staff or to anyone outside ADB without the consent of the
complainant.
C. Anticorruption Measures to be Taken by the Borrower
4. The Government will take a number of measures to improve governance and

transparency in the power sector. Strengthening the regulatory framework for the sector
will provide segregation between EPC and regulatory functions. Accountability to sector
stakeholders will be strengthened through public consultations and information,
particularly with regards to tariffs and the cost of electricity supply. The consistent
application of disconnections will improve EPC’s ability to provide reliable electricity
supply to all consumers. Benchmarking will improve awareness and transparency of
EPC’s technical and operational performance. Strengthening EPC’s financial
111
management capabilities and reporting through the provision of RFMAs 1 will improve the
Government’s oversight of EPC.
5. ADB’s Anticorruption Policy was explained to and discussed with EPC and the
Government. Consistent with its commitment to good governance, accountability, and
transparency, ADB reserves the right to investigate, directly or through its agents, any
alleged corrupt, fraudulent, collusive, or coercive practices relating to the Project. To
support these efforts, relevant provisions of the Anticorruption Policy are included in the
loan and grant regulations and the bidding documents for the Project. In particular, all
contracts financed by ADB in connection with the Project shall include provisions
specifying the right of ADB to audit and examine the records and accounts of EPC and
all contractors, suppliers, consultants, and other service providers as they relate to the
Project.
1
The RFMAs will be provided through the TA cluster for Implementing the Samoa National
Energy Policy.
112
14. DESIGN CHANGES

113
16. IMPLEMENTATION OF THE ASSOCIATED

TECHNICAL ASSISTANCE PROJECT
(TA No. 4994-SAM: Implementing the Samoa National Energy Policy)
1. A TA cluster for Implementing the Samoa National Energy Policy forms part of the
Government’s power sector development plan to improve access to sustainable and reliable
electricity services to all consumers in Samoa. The TA cluster supports the Government’s
priorities for the power sector through the following four components:
(1) Component 1. Comprises the establishment of a Clean Energy Fund (CEF) and
a clean development mechanism (CDM) subfund;
(2) Component 2. Establish and build capacity of a Designated National Authority
(DNA) to enable Samoa to benefit from the CDM;
(3) Component 3. Regulatory and Policy Reform in the Power Sector comprises
support for the development of (i) demand-side management and energy
conservation strategy; (ii) a legal framework to govern all stakeholders in the
power sector, and (iii) establishment of a regulator; and
(4) Component 4. Resident Financial Management Advisors to EPC
The TA cluster is described in RRP, Appendix 11 and detailed in Supplementary Appendix B,

copies are provided at the end of this Section. The TA cost estimates per component are as
follows:
Table 1: Component 1: Establishment of a Clean Energy Fund

($'000)
Total
Item
Cost
A. Government of Finland Financinga
1. Consultants
a. Remuneration and Per Diem
i. International Consultants 170.00
ii. National Consultants 40.00
b. International and Local Travel 39.00
c. Reports and Communications 2.00
2. Publications and Printed Materials 5.00
3. Workshops 12.00
4. Miscellaneous Administration and Support Costs 5.00
5. Contingencies 77.00
Subtotal (A) 350.00
B. Government Financing
1. Office Accommodation 35.00
2. Remuneration and Per Diem of Counterpart Staff 30.00
Subtotal (B) 65.00
Total 415.00
a
Administered by the Asian Development Bank.
114
Table 2: Component 2: Establishment and Capacity Building

for the Designated National Authority
($'000)
Total
Item
Cost
A. Asian Development Bank Financinga
1. Consultants
b. International Travel 24.00
2. Public Awareness 3.00
3. Workshops and Training 5.00
5. Representative for Contract Negotiations 6.00
Subtotal (A) 150.00
Subtotal (B) 30.00
Total 180.00
a
Financed by the Japan Special Fund, funded by the Government of Japan.
Table 3: Component 3: Regulatory and Policy Reform in the Power Sector

($'000)
Total
Item
Cost
A. Government of Australia Financinga
1. Consultants
b. International and Local Travel 168.00
2. Public Awareness Campaign 10.00
3. Workshops and Presentations
a. Facilitators/Invited Experts 50.00
b. Workshops 7.00
5. Representative for Contract Negotiations 6.00
Subtotal (A) 900.00
3. Others 20.00
Subtotal (B) 160.00
Total 1,060.00
a
Administered by the Asian Development Bank.
115
Table 4: Component 4: Resident Financial Management Advisors

to the Electric Power Corporation
($'000)
Total
Item
Cost
A. Asian Development Bank Financinga
1. Consultants
b. International Travel 120.00
2. Training Workshops 2.00
Subtotal (A) 450.00
Subtotal (B) 80.00
Total 530.00
a
Financed by the Japan Special Fund, funded by the Government of Japan.
116
COST ESTIMATES AND FINANCING PLAN
Table 5: Summary Cost Estimates and Financing Plan by Financier

($ ‘000)
Item ADB Government of Government of Government of Total

Australia Finland Samoa Amount
Amount % Amount % Amount % Amount %
A. Technical Assistance Financing
Categorya
1. Consultants
i) International Consultants 388.00 35.2 545.00 49.41 170.00 15.41 0.00 0.0 1,103.00
ii) National Consultants 0.00 0.0 0.00 0.00 40.00 100.00 0.00 0.0 40.00
b. International and Local Travel 144.00 41.0 168.00 47.86 39.00 11.11 0.00 0.0 351.00
c. Reports and Communications 5.00 31.3 9.00 56.25 2.00 12.50 0.00 0.0 16.00
2. Publications and Printed Materials 0.00 0.0 0.00 0.00 5.00 100.00 0.00 0.0 5.00
3. Public Awareness Campaign 3.00 23.1 10.00 76.92 0.00 0.00 0.00 0.0 13.00
4. Workshops 7.00 9.2 57.00 75.00 12.00 15.79 0.00 0.0 76.00
Miscellaneous Administration and
5. Support Costs 4.00 28.6 5.00 35.71 5.00 35.71 0.00 0.0 14.00
Representative for Contract
6. Negotiations 6.00 50.0 6.00 50.00 0.00 0.00 0.00 0.0 12.00
7. Contingencies 43.00 19.5 100.00 45.45 77.00 35.00 0.00 0.0 220.00
Subtotal (A) 600.00 900.00 350.00 0.00 0.0 1,850.00
B. Counterpart Contribution Category
1 Office Accommodation 0.00 0.0 0.00 0.0 0.00 0.0 175.00 100.0 175.00
Remuneration and Per Diem of
2 Counterpart Staff 0.00 0.0 0.00 0.0 0.00 0.0 140.00 100.0 140.00
3 Other 0.00 0.0 0.00 0.0 0.00 0.0 20.00 100.0 20.00
Subtotal (B) 0.00 0.00 0.00 335.00 335.00
Total 600.00 900.00 350.00 335.00 2,185.00
a
Component 1 and component 2 will comprise one consulting services contract; component 3 will comprise one consulting services contract; and Component 4 will
comprise of two individual consulting services contracts
ADB = Asian Development Bank.
117
RRP, Appendix 11
TECHNICAL ASSISTANCE CLUSTER
1. During the Asian Development Bank (ADB) loan Fact-Finding Mission for the proposed
Power Sector Expansion Project in May 2007, the Government of the Independent State of
Samoa (the Government) confirmed its request for a technical assistance (TA) cluster for the
development of sustainable and reliable electricity services to support economic growth.
Following the Government’s request, an understanding was reached on the TA cluster impact,
outcome, outputs, implementation arrangements, cost, financing arrangements, and terms of
reference. 1 The TA cluster is included in the country operations business plan (2007–2009) for
Samoa. 2
2. The TA cluster forms part of the Government’s power sector development program and
is included in the proposed Power Sector Expansion Project. The objective is to improve access
to sustainable and reliable electricity services for all consumers in Samoa by improving the
quality, reliability, and cost-effectiveness of power supply. The TA cluster will (i) promote the
development of clean energy resources in Samoa through the establishment of a clean energy
fund (CEF); (ii) enable Samoa to participate in, and benefit from, carbon-market trading through
the establishment of, and capacity building for, a designated national authority (DNA); (iii)
develop effective regulation of the power sector and promote demand-side management and
energy conservation through support for regulatory and policy reform in the power sector; and
(iv) help improve EPC’s financial performance through resident financial management advisors
(RFMAs). The technical assistance report is in Supplementary Appendix B.
3. The TA cluster supports the Government’s priorities for the power sector through four
components: Component 1 comprises the establishment of a CEF and a clean development
mechanism (CDM) subfund; Component 2 will establish and build capacity of a DNA;
Component 3 will support the Government in undertaking regulatory and policy reform in the
power sector; Component 4 will provide RFMAs to EPC. Capacity building and stakeholder
consultations are integral parts of all components.
4. Component 1: Establishment of the CEF. The CEF will help improve the coordination
of financing sources for clean energy resources in Samoa and is envisaged as a revolving fund.
Component 1 will (i) help establish the governance and operational structure, human resources,
and working and reporting guidelines of the CEF and a CDM subfund, (ii) identify a project
pipeline, and (iii) increase public awareness on clean and renewable energy. The CDM subfund
will help finance initial transactions costs associated with getting eligible projects additional
financing under the CDM. This may include preparation of project design documents, validation
of project design documents by an operational entity or independent third party validator, and
registration of projects with the CDM executive board.
5. Component 2: Establishment of, and Capacity Building for, the DNA. The
establishment of a DNA will enable Samoa to benefit from the CDM. Component 2, which will be
implemented jointly with Component 1 to ensure that the two components are well coordinated,
will, through a consultative process; (i) establish the operational structure and resource
requirements; (ii) develop working guidelines and procedures for the DNA, (iii) provide capacity
building and hands-on training for stakeholders and DNA staff in procedural requirements using
1
The TA first appeared in ADB Business Opportunities on 4 July 2007.
2
ADB. 2007. Country Operations Business Plan (2007–2009): Independent State of Samoa. Manila.
118
a pilot project (identified in the project pipeline under Component 1); and (iv) raise public
awareness on the role, functions, and requirements of the DNA.
6. Component 3: Regulatory and Policy Reform in the Power Sector. Component 3

comprises support for the development of (i) a demand-side management and energy
conservation strategy, (ii) a legal framework to govern all stakeholders in the power sector, and
(iii) the establishment of a regulator. The demand-side management and energy conservation
strategy will focus on the policy environment and tax incentives to promote energy efficiency.
Support to regulatory reform will be implemented in three phases allowing for stakeholder
consultation and political decision processes. The first phase will focus on the scoping of a
regulatory framework that will allow the Government to make a decision in principle on the roles,
functions, and structure of a regulatory agency, including the independence, authority for tariff
regulation, and accountability of the regulator and the scope for multisector regulation. The first
phase will guide the direction of subsequent phases. Phase 2 will develop the regulatory
framework, including the drafting of new legislation and amendments to existing legislation for
consideration by cabinet and parliament and the preparation of a detailed budget and resource
assessment for approval in the forthcoming budget year. Once the Government has approved
the legislation and the budget of the regulator, recruitment of a suitable regulator and initial
capacity building and the development of working guidelines of the regulator can commence.
7. Component 4: RFMAs to the Electric Power Corporation. Two RFMAs (one

accountant and one analyst) will be engaged to assist EPC in (i) improving internal budgeting
and expenditure controls; (ii) consolidating accounts and financial reporting and forecasts to the
EPC board, the Government, and ADB; and (iii) developing peak and off-peak tariffs and bulk
purchase agreements with EPC’s major customers. Capacity building and training is an integral
task of all aspects of the work. Component 4 will help EPC (i) improve longer-term least-cost
planning; (ii) ensure that investments are affordable and contribute to improving financial
sustainability; and (iii) improve the transparency of costs, tariff setting, and accountability to the
Government and consumers.
8. The total cost of the TA cluster is estimated to be $2,185,000 equivalent. The

Government has requested ADB to finance $1,850,000 equivalent. Table A11.1 shows the
financing by component. The equivalent of $350,000 will be financed on a grant basis by the
Government of Finland; $900,000 equivalent will be financed by the Government of Australia;
$600,000 equivalent will be financed on a grant basis by the Japan Special Fund, funded by the
Government of Japan. The Government of Samoa will finance office accommodation, and
remuneration and per diem of counterpart staff in the equivalent of $335,000.
119
17. Key Persons Involved in the Project

Government of Samoa – Ministry of Finance
Name Title Email address Phone/Fax No.
Ms. Hinauri Petana Chief Executive Officer hinauri.petana@mof.gov.ws Tel: +685 34332
Ministry of Finance Fax: +685 21312/24779
Ms. Noumea Simi Assistant CEO, Aid noumea.simi@mof.gov.ws Tel: +685 34349/34386
Coordination and Loan Fax: +685 21312/24779
Management
Ms. Noelani Tapu Principal Officer, Debt noelani.tapu@mof.gov.ws
Management
Electric Power Corporation

Mr. Joseph S. Walter General Manager epcgm@samoa.ws Tel: +685 22261
Fax: +685 23748
Mr. Tologata Tile Acting Project Manager Tel: +685 65407
Tuimalealiifano leiat@epc.ws Fax: +685 23748
Ms. Faalepo Solofa-Isitolo Project Accountant solofaf@epc.ws Phone: +685 65414

mobile: +685 7504619
fax: +685 65421
JICA
Ken Kato (Mr.) Assistant Director Kato.Ken@jica.go.jp Tel: +81-3-5352-5607
Operations Management Fax: +81-3-5352-5032
Division
Operations Strategy
Department
Sachie Terasaki (Ms) Country Officer Terasaki.Sachie@jica.go.jp TEL: +81-3-5352-5624
Pacific Division (Pacific FAX: +81-3-5352-5490
Islands), Southeast Asia 1
and Pacific Department
Yumiko HORIWAKI (Ms.) Division 1, Loan and Grant Horiwaki.Yumiko@jica.go.jp tel:+81-(0)3-5218-9232
Administration Dept. fax:+81-(0)3-5218-3974
Government of Australia
Ms. Heather Dixon 2nd Secretary heather.dixon@dfat.gov.au Tel: +685 23411 ext 712
Development Cooperation Fax: +685 26872
AusAID
Australian High Commission
Beach Road, Apia, SAMOA
PO Box 704, Apia, Samoa
Asian Development Bank, Pacific Department
Name Title Email address Phone/Fax No.

Mr. Sultan H. Rahman Director General, Pacific shrahman@adb.org Tel: +632 632 6085
Department Fax: +632 636 2442
Sungsup Ra Director, Pacific Operations sungsupra@adb.org Tel: +632 632 6125
Division (PAHQ) Fax: +632 636 2442 /2446
Mr. Anthony Maxwell Energy Specialist amaxwell@adb.org Tel: +632 632 6114
Fax: +632 636 2442 /2446
Ms. Susan I. Francisco Operations Officer, PAHQ sifrancisco@adb.org Tel: +632 632 6357
Fax: +632 636 2442 /2446
Section 17

Sam Pam

Transféré par

Informations du document

Description originale:

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Sam Pam

Transféré par

Droits d'auteur :

Formats disponibles

Project Administration Memorandum

Project Number: 38183

SAM: Power Sector Expansion Project

Power sector expansion project

Asian Development bank

1. The Project Administration Memorandum (PAM) is a guide to the management,

 Approval of Project Preparatory Technical Assistance 25 May 2006

C. Amount and Terms of the Loans and Grants

 ADF Loan Amount SDR 17,151,000 1

 ADF Loan Terms 32 years

 JBIC Loan Terms 30 years

D. Loan and Project Summary

Borrower Independent State of Samoa

Classification Targeting classification: General intervention

Environment The two core subprojects are classified category B and C. An

investments to diversify the economy and achieve sustainable

With peak demand growing at about 3% annually in the medium

EPC’s investment plan 2008–2015 is driven by (i) the need to

Although Samoa’s debt situation has significantly improved, the

An ADF loan of $26.61 million and an ADF grant of $15.39 million

The Japan Bank for International Cooperation (JBIC) will provide

The Government of Australia will provide grant cofinancing of $8

The Government will utilize the ADF grant by converting a portion

provide ongoing financing for a CEF and a CDM subfund to be

Period of Utilization 31 December 2016

Estimated Project 30 June 2016

Implementation EPC will be the implementing agency. A project steering

The Project will be implemented over a period of 8 years. Bid

The eligibility criteria, project preparation requirements, and

Executing Agency The Ministry of Finance

Procurement Procurement under the Project, including for ADB, JBIC,

ADB’s standard bid documents will be used for procuring ADB,

A consultant firm has been engaged to provide international

firm was recruited using quality-and cost-based selection

Project Benefits and Inadequate and unreliable power supply is becoming an

Regulatory reform and the establishment of a regulatory agency

Political commitment to implementing power sector reforms is

The selection and sequencing of subprojects under the

consumers. In the case of certain basic social services where

2. The Project consists of the following components:

Component A: Upgrading the Hospital Feeder

Upgrade the hospital feeder through:

(i) constructing an approximately 900 meters 22 kV underground cable to replace

(ii) installing a new 6.6kV/22kV transformer at the Tanugamanono power station

Component B: Installing Pre-Payment Meters

Supply and install approximately 21,000 single-phase pre-payment meters and

Component C: Implementing Candidate Subprojects

Component D: Supporting Project Management

Support the EPC’s management of the Project through:

(i) the establishment of the PMU; and

4. Climate Change Adaptation. The Project supports the objectives of the

5. Power Sector Reform. Investments in the power sector will be accompanied by

8. Pilot Financing Approach to Reforms in Developing Countries. The Government

Design Summary Performance Data Sources/Reporting Assumptions and Risks

Amendments of the EPC Parliament consideration

Regulatory agency Government

Activities with Milestones Inputs

2.3. Implementation of candidate subprojects (2008–2015)

3. Establishment of effective regulation of the power sector (2008–2010)

4. Energy demand-side management (March–August 2008)

5. Promotion and Development of clean energy resources (March 2008–February 2009)

5. COST ESTIMATES AND FINANCING PLAN