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Background

Reliable power supply is essential to enhancing the quality of life and good performance of the power sector and reliable electricity services are vital to promoting private sector investments to diversify the economy and achieve sustainable economic growth. But in Samoa, the performance of the power sector at project appraisal in 2007 was increasingly becoming a hindrance to economic growth and high system losses and voltage drops, resulting in poor reliability and quality of electricity supply. Medium-term peak demand was growing at 3% annually and the 2008−2015 investment plan of Samoa’s Electric Power Corporation (EPC) is driven by (i) the need to improve collection performance, (ii) the need to remove transmission bottlenecks to improve the reliability and quality of supply, and (iii) capacity requirements to meet the growing peak demands.  The objective over the long-term is to reduce Samoa's reliance on imported fuels through clean, indigenous, and renewable energy resources.

In November 2007, the Asian Development Bank (ADB) approved a $26.61 million loan and a $15.39 million grant for the Power Sector Expansion Project,0 designed to help the government achieve its power sector development plan. The project was the largest development partner-supported energy sector project in the Pacific. It was cofinanced by the government of Australia and the Japan International Cooperation Agency and was the largest cofinancing project in ADB’s Pacific Department. 

The project’s envisaged impact was provision of sustainable, reliable, and affordable electricity services and its intended outcome was improved quality, reliability, and cost-effectiveness of power supply. To achieve these results, the project, along with an associated technical assistance (TA) provided by ADB, was to help EPC by (i) supporting EPC’s investment plan to meet growing electricity 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 the Clean Energy Fund (CEF), a clean development mechanism (CDM) subfund, and a designated national authority (DNA). 

At completion, the project broadly achieved the first 5 outputs, and the sixth output partly.  Electricity demand requirements on the main island of Upolu as well as on Savai’i were met.  By upgrading and increasing the number of distribution feeders, replacing high voltage conductors with larger ones, adding more transformers to reduce long low voltage line, underground transmission cabling, installing a dedicated transmission line from hydropower stations to the main substation, and more, EPC significantly reduced total system losses to 9.9% by early-2018, from a baseline of 15.9% in 2008.  Overall increase in fuel efficiency of diesel generations supplemented the physical upgrades in reducing system losses.

EPC financial performance improved through consistent application of the disconnection policy, fuel audits, tariff adjustments, and the installation of more prepayment meters. However, the EPC only partly achieved its targets in reducing government share of accounts receivable and self-financing, accounts receivable, and debt service ratios.  The Electricity Act was passed into law in 2010 and the Office of the Regulator of the telecommunication sector was appointed as the power sector regulator in 2010. An energy conservation and demand-side management (DSM) public awareness campaign was implemented, however, there is no indication yet of DSM improvement. Through the associated TA, energy forecasts under various efficiency assumptions, demand-side energy efficiency strategies, and a DSM action plan were prepared, but there was limited follow-up as the government felt some elements were not appropriate for the country.

Targets on the number of energy subsector projects financed by the CEF, number of energy subsector projects eligible for CDM, and electricity produced by clean energy resources from a 2006 baseline of 45 GWh were met, although only partly. The CEF, funded in part by interest payments from EPC to the government on the ADB grant portion, was established within the MOF but did not achieve the funding amounts envisaged at appraisal. With the further reduction in the interest rate of the relent ADB loan to EPC, the CEF was not a successful model. By 2009, EPC developed at least 18 indicative project outlines for possible CDM support, but none materialized. Although not directly through the project, EPC reported clean renewable energy production of 77 GWh or 48% of gross annual generation of 160 GWh in 2018. Clean energy growth averaged 4.6% in GWh annually between 2006 and 2018, with most growth coming through from 2015 onwards.

The MOF was the project executing agency and EPC, the implementing agency.

Project Information
Project Name: 
Power Sector Expansion Project
Report Date: 
November, 2019
Main Sector: 
Country: 
Project Number: 
Report Type: 
Project/Modality: 
Project loan
Project grant
SDG: 
Goal 9: Industry, Innovation, and Infrastructure
Goal 8: Decent Work and Economic Growth
Goal 13: Climate Action
Loan Number: 
L2368 and 8232, G0087 and 0101
Source of Funding: 
COL/ADF, Government of Australia, Japan Bank for International Cooperation
Date Approved: 
L2368, G0087, G0101: 21 November 2007, L8232: 4 October 2007
Report Rating: 
Successful

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