Project Concept Paper

Project Number: 52111-001 October 2018

Proposed Grant and Administration of Grants Samoa: Alaoa Multi-Purpose Dam Project

CURRENCY EQUIVALENTS (as of 2 October 2018)

Currency unit

ST1.00 – =

Samoan tala $0.38

$1.00 = ST2.65

ABBREVIATIONS

ADB AEP AMDP CSC EPC GCF GWh MNRE MOF MW O&M PDNA PIC-11 Q R-TRTA SHP SIDS

– – – – – – –

– – – – – – – – –

Asian Development Bank annual exceedance probability Alaoa Multi-Purpose Dam Project construction supervision consultant Electric Power Corporation Green Climate Fund Gigawatt hour Ministry of Natural Resources and Environment Ministry of Finance megawatt operations and maintenance Post Disaster Needs Assessment 11 smaller Pacific Island Countries quarter regional transaction technical assistance small hydropower plant small island developing state

NOTE

In this report, "$" refers to United States dollars, unless otherwise stated. Vice-President Stephen P Groff, Operations 2 Director General Ma. Carmela D. Locsin, Pacific Department Director Olly Norojono, Transport, Energy and Natural Resources Division,

PARD Team leader Woo Yul Lee, Energy Specialist, PARD Team members Genna Mariz O. Alcasabas-Bantaya, Operations Assistant, PARD Stephen Blaik, Principal Urban Development Specialist, PARD

Ninebeth Carandang, Safeguards Specialist, PARD Christopher Lee Damandl, Senior Counsel, OGC Maria Melei, Senior Country Coordination Officer, PARD Aivy Katherine D. Dizon, Safeguards Analyst, PARD

Pushkar Manandhar, Project Officer (Energy), SARD Kevin Moore, Senior Procurement Specialist, PPFD

Jean Williams, Senior Environment Specialist, PARD Peer reviewers David Elzinga, Senior Energy Specialist and Noriyuki Mori, Senior

Water Resources Specialist (Dam Optimization), SDCC In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS Page

PROJECT AT A GLANCE

PROBLEM TREE

I. THE PROJECT 1

A. Rationale 1

B. Proposed Solutions 3

C. Proposed Financing Plans and Modality 4

D. Implementation Arrangements 5

II. PROJECT PREPARATION AND READINESS 5

III. DELIBERATIVE AND DECISION-MAKING ITEMS 6

A. Risk Categorization 6

B. Project Procurement Classification 6

C. Scope of Due Diligence 6

D. Processing Schedule and Sector Group’s Participation 6

E. Key Processing Issues and Mitigation Measures 7

APPENDIXES

1. Design and Monitoring Framework 8

2. Project Procurement Classification 10

3. Transaction Technical Assistance 11

4. Initial Poverty and Social Analysis 13

Project Classification Information Status: Complete

PROJECT AT A GLANCE

Source: Asian Development BankThis document must only be generated in eOps. 18102018110624542834 Generated Date: 18-Oct-2018 11:06:29 AM

1. Basic Data Project Number: 52111-001Project Name Alaoa Multi-Purpose Dam Project Department

/DivisionPARD/PATE

Country Samoa Executing Agency Ministry of FinanceBorrower Government of Samoa

2. Sector Subsector(s) ADB Financing ($ million)Energy Renewable energy generation - small hydro 3.50

Water and other urban infrastructure and services

Urban flood protection 16.50

Total 20.00

3. Strategic Agenda Subcomponents Climate Change Information Inclusive economic growth (IEG)

Pillar 2: Access to economic opportunities, including jobs, made more inclusive

Environmentally sustainable growth (ESG)

Disaster risk managementGlobal and regional transboundary environmental concernsUrban environmental improvement

CO2 reduction (tons per annum) 280Climate Change impact on the Project

High

ADB Financing

Adaptation ($ million) 10.00

Mitigation ($ million) 10.00

Cofinancing

Adaptation ($ million) 52.60

4. Drivers of Change Components Gender Equity and MainstreamingGovernance and capacity development (GCD)

Civil society participation

Partnerships (PAR) Bilateral institutions (not client government)Civil society organizationsOfficial cofinancing

Private sector development (PSD)

Public sector goods and services essential for private sector development

Some gender elements (SGE)

5. Poverty and SDG Targeting Location ImpactGeographic TargetingHousehold TargetingSDG Targeting

YesYesYes

Urban High

SDG Goals SDG3, SDG7, SDG9

6. Risk Categorization: Complex.

7. Safeguard Categorization Environment: A Involuntary Resettlement: B Indigenous Peoples: C.

8. Financing

Modality and Sources Amount ($ million)

ADB 20.00

Sovereign Grant projects: Asian Development Fund 20.00

Cofinancing 52.60

Green Climate Fund - Grant projects (Full ADB Administration) 40.00

To be determined - Grant projects (Full ADB Administration) 12.60

Counterpart 9.50

Government 9.50

Total 82.10

Currency of ADB Financing: USD

PROBLEM TREE

Lack of financing to develop disaster proof, water storage and power generation infrastructures

Inadequate knowledge and capacity on disaster risk management

Inadequate surface water storage

Increased shared of fossil fuels generation in country energy mix

Communities, government and other stakeholder not fully prepared

to handle disasters

Inadequate resource to handle immediate impacts of disasters.

Inadequate resilience to disaster for public and private

infrastructures

Increasing inter-temporal variability of water availability

Samoa struggles with the multiple challenges of (i) disaster resilience (e.g., flood prevention); (ii) climate change adaptation, especially reliable water supply during the dry

season; and (iii) high dependency on fossil fuels for power generation

Increased loss of public and property and disruption to critical urban

infrastructure due to extreme weather event

Decrease in welfare caused by high electricity tariff

Reduced economic development and inclusive growth

Reduced water security, especially during drought

High dependence on imported fossil fuels

Increased occurrence of climate induced disaster

I. THE PROJECT A. Rationale 1. The proposed Alaoa Multi-Purpose Dam Project (AMDP) (the Project) will develop a multi-purpose dam coupled with a run-of-river type of small hydropower plant (SHP), with an indicative capacity of 0.26 megawatts (MW) in the upstream areas of the eastern branch of the Vaisigano river in Apia, Samoa. 1 The Project will help Samoa (i) attenuate Vaisigano River floods; (ii) increase the resiliency of the Apia water supply; and (iii) increase Samoa’s renewable energy production capacity. The Project also includes capacity building and project management supports. The project feasibility assessment is currently being undertaken under the regional transaction technical assistance (TA-9242) (see Appendix 3).2 2. Samoa is a Pacific island country divided into two main islands (Upolu and Savai’i) and two minor outer islands, with a total population of about 188,000 people. About 70% of the population lives on Upolu, the main island and location of the capital, Apia. As a small island developing state in the Pacific, Samoa is vulnerable to natural disasters and the potential effects of climate change such as floods and water shortages during drought. 3. Climate change projection suggested that Samoa is expected to have more frequent extreme weather events, such as extreme rainfall, longer drought and storms in the future. The current extreme daily rainfall of 400 mm, currently a 1 in 60 years event, will likely to become 1 in 40 years event by 2050. 3 An increase in frequency of severe cyclones in Samoa in recent years – Cyclone Evan in 2012, Cyclone Pam in 2015 and Cyclone Gita in 2018 – also indicate increased exposure of Samoa to extreme events. 4. There is no clear evidence that cyclones will become more frequent, but rainfall will be more intense when there is a cyclone. Available modelling shows that rainfall in large weather events could increase by 8% in the future. 4 Looking at the design rainfalls derived over the Vaisigano catchment, this means that a 1:100 annual exceedance probability (AEP) 24-hour event would become approximately 1:50 AEP event by 2090, and a 1:150 AEP 24 hour-event would become approximately 1:80 AEP by 2090 (see footnote 3). 5. The Vaisigano River is the largest river in Samoa. It flows through the Urban Apia Area, home to a population of 37,391 (about 20% of total population of Samoa). The Vaisigano River Basin holds great economic importance. It plays a crucial role in meeting 60% of drinking water supply requirement of Apia and also provides clean energy from three hydropower plants, with a

1 The proposed run-of-river hydropower type and installed capacity have been selected based on the result of scenario

and levelized cost of electricity analysis. 2 ADB. 2016. Technical Assistance for Preparing the Pacific Renewable Energy Investment Facility. Manila. The R-

TRTA was approved and became effective on 24 November 2016 and is scheduled for completion by 30 November 2026. The scope of the R-TRTA includes project preparation, detailed design, and procurement support for renewable energy projects in the 11 smaller Pacific island countries, including Samoa under the proposed Pacific Renewable Energy Investment Facility (Facility). The Report and Recommendation of the President for the Facility provides, among other criteria, that ‘environment category A projects are excluded in general’. The approval memo dated 23 June 2017 (permitting funds under the Facility to be used for project preparation, detailed design and procurement support for the Project) stated that the Project was “low risk”. However, the Project’s environmental safeguards categorization has been upgraded to ‘A’. Therefore, the Project does not meet the criteria for financing under the Facility and will be processed as a stand-alone project.

3 GCF. 2016. Integrated Flood Management to Enhance Climate Resilience of the Vaisigano River Catchment in Samoa (FP037), Songdo, Korea.

4 Annual Exceedance Probability (AEP) refers to the probability of a flood event occurring in any year. The change in AEP of 24-hour large rainfalls by 2090, calculated based on an 8% rainfall increase.

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total cumulative size of 4.7 MW (equivalent to around 11% of a total maximum rated capacity in Samoa). Extreme weather events have caused major flooding of the Vaisigano river, impacting public and private properties along the river. Its catchment has a high proportion of very steep slopes, which makes it conducive to rapid-rising floods following heavy rain. 6. According to a Post Disaster Needs Assessment (PDNA) report prepared by the Government of Samoa (government), Cyclone Evan caused total estimated damage of over $200 million in 2012.5 The biggest loss of private and public infrastructures was noted in the urban Apia area. There was also loss of life, and immense damage and significant losses to Apia’s water supply infrastructure and hydropower generation and distribution systems. Another impact of climate change on seasonal variation of rainfall patterns pose a potential threat to water security, especially in isolated small island states like Samoa. An increased turbidity of water supply during flood periods is another issue. Moreover, three hydropower plants with a total installed capacity of 4.7MW (equivalent to around 11 % of a total maximum rated capacity in Samoa) were damaged and kept out of operation for 5 years.6 This has prompted the government to undertake a programmatic approach to address the issue of flooding in the Vaisigano river catchment. 7. Moreover, Samoa’s energy security situation is weak due to high reliance on imported fossil fuel to generate electricity (about 60% of maximum demand of 25 MW and electricity generation of about 154 gigawatt hour [GWh]).7 The reliance on imported fuel is reflected in high electricity tariff of Electric Power Corporation (EPC), 8 which as of September 2018 ranged between $0.31 (ST0.81) and $0.35 (ST0.91) per kilowatt-hour (kWh). To reduce the current high electricity tariff caused by high dependency on fossil fuels for power generation, the government set the target of 100% renewable energy for electricity generation through the year 2025.9 8. To address the multiple challenges of (i) disaster resilience (e.g., flood prevention); (ii) climate change adaptation, especially reliable water supply during the dry season; and (iii) high dependency on fossil fuels for power generation, the government has made a request for ADB’s support and submitted a Letter of Endorsement,10 which endorsed ADB as the Accredited Entity of the Green Climate Fund (GCF) to prepare a GCF funding proposal for the development of the Alaoa Multi-Purpose Dam Project including the run-of-river SHP.

5 Government of Samoa (GOS). 2013. Samoa Post-disaster Needs Assessment Cyclone Evan 2012. Apia. Samoa. 6 Cyclone Evan caused significant damage to three hydropower plants (Samasoni, Alaoa, and Fale ole Fee) and minor

damage to two additional hydropower plants. To help the government rehabilitate damaged SHPs and build new SHPs, ADB has provided a grant of $19.21 million and administered grants of $7.55 million equivalents, co-financed by the European Union and the Government of New Zealand under the Renewable Energy Development and Power Sector Rehabilitation Project; (i) ADB. 2013. Renewable Energy and Power Sector Rehabilitation Project. Manila; and (ii) ADB. 2015. Renewable Energy and Power Sector Rehabilitation Project (Additional Financing). Manila. The cyclone also damaged Upolu’s main Tanugamanono Diesel Power Station. Damage to the transmission and distribution grid included 1,198 power poles damaged (833 leaning, 245 broken, 120 fallen), 158 power meters destroyed, 6.7 km of power line requiring replacement, 25 transformers destroyed, and significant damage to the radio network. The estimated cost for replacement of damaged power sector infrastructure is SAT 39.1 million ($14.4 million equivalents). Losses to EPC are estimated at SAT 31.9 million ($11.4 million equivalents) more, mainly from loss of revenue from non-operation of hydropower plant and the need to replace low-cost hydropower generation with high-cost diesel generation.

7 Government of Samoa (GOS), 2017, Samoa Energy Sector Plan 2017-2022. Apia. Samoa. 8 EPC is a wholly government-owned corporation and is responsible for all operating responsibilities for the power

sector. The EPC Act (1980) and the EPC Amendment Act (2001) mandate EPC with the authority for generation, transmission, and distribution of electricity throughout Samoa.

9 GOS. 2015. Samoa’s Intended Nationally Determined Contribution. Apia. Samoa. 10 This letter was jointly signed by the Ministry of Finance (MOF), the Ministry of Natural Resources and Environment

(MNRE), Samoa Water Authority (SWA), and EPC.

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9. The primary objective of this proposed AMDP is to prevent flooding from the upstream areas of the eastern branch of the Vaisigano river.11 The secondary benefit of the dam will be seasonal water supply during dry periods and reduction in the noted turbidity issue during flood periods. The tertiary objective of the dam will be additional hydropower generation of about 0.26 MW, which will support government’s target of 100% renewable energy for electricity generation by 2025. B. Proposed Solutions 10. The proposed project will have three outputs:

• Outputs 1: Multipurpose dam for (i) flood retention; and (ii) seasonal water supply – constructing the multipurpose dam with the estimated dam height of 55m and the indicative storage volume of 4.0 million m3;12

• Output 2: Small hydropower plant (SHP) – constructing the run-of-river SHP, with an indicative installed capacity of 0.26 MW; and

• Output 3: Strengthening of capacity for project management – (i) improving

capacity of the implementing agency to undertake operations and maintenance of the dam and improve community engagement; (ii) supporting the implementing agency on project management in line with international standards and best-practices; and both design and procurement activities, construction supervision, and development of operations and maintenance manuals.

11. The proposed project is part of government’s comprehensive country work plan for climate change. Figure 1 portrays the hierarchy of objectives on the climate change adaptation in Samoa that reflects objectives stated in the government’s Strategy for Development of Samoa 2017 – 2020 (SDS). The Project is consistent with the SDS and its objective to “Accelerating Sustainable Development and Broadening Opportunities for All”. The Project’s aim of providing water supply, renewable energy and mitigating against climate change risks such as flooding, support the SDS key outcomes which include access to clean water and sanitation; quality energy supply; environmental resilience improved, and climate and disaster resilience. Furthermore, the Project is in line with the (i) Samoa Energy Sector Plan 2017- 2022 (see footnote 7) which aims to address sustainable and affordable energy supply for all by increasing renewable energy and improving electricity among others; and the (ii) Water and Sanitation Sector Plan 2012-2016 with the goal of providing reliable, clean, affordable water and basic sanitation within the framework of

11 Options to mitigate flooding of urban areas within the Vaisigano catchment were investigated by UNDP (see footnote

3). UNDP used the findings of the investigation to successfully access GCF funding to strengthen the adaptive capacity the reduce exposure to climate risks of vulnerable livelihoods and infrastructure in the Vaisigano River catchment. The UNDP project supports both soft solutions (catchment management programs, capacity building, early flood warning systems, and public awareness campaigns on flood resilient building practices) and hard solutions (channelization of the lower reaches of the Vaisigano, ecosystem solutions to reduce flows during extreme floods, upgrading of the Lelata Bridge to increase discharge capacity, extension of floodwalls, and urban drainage system augmentation The levee is designed to retain the 1:20 Year annual recurrence interval [ARI] event flood). In addition to UNDP’s ongoing works, the hydrological design objective of the proposed project is to prevent flooding of downstream power stations for floods of equal magnitude as observed during the Cyclone Evan flood in 2012. The Cyclone Evan flood was assessed through flood frequency analysis to be approximately a 1:150 year ARI event.

12 The storage allocation is as follow: (i) flood attenuation: 3.0 million m3; (ii) water supply: 0.5 million m3; (iii) dead storage: 0.5 million m3; and (iv) hydropower (run-of-river): 0.0 million m3.

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Integrated Water Resources Management, for all people in Samoa to sustain health improvements and alleviate poverty.13

Figure 1: Toward an Environmentally Sustainable, Climate- and Disaster-Resilient Samoa

Source: UNDP and ADB.

12. The Project will support a couple of priorities of ADB support under ADB’s Strategy 2030; (i) tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability; and (ii) making cities more livable.14 The Project is in line with the objectives of ADB’s 2009 Energy Policy to promote renewable energy. 15 It is included in ADB’s country operations business plan for 11 small pacific island countries, 2019-2021. 16 17 13. The Project will result in the following outcomes: increased (i) resiliency climate change-related flooding; (ii) water security; and (iii) the share of renewable energy for power generation. The project will be aligned with the following impact: reduced the impact of climate change adaptation with the mitigation co-benefits of helping Samoa move from its current energy pathway that is heavily dependent on imported fossil fuels for power generation to a pathway using clean and renewable energy resources. C. Proposed Financing Plans and Modality 14. The project is estimated at about $82.1 million. The government has requested (i) a grant of $20.0 million from ADB’s Special Funds resources; (ii) a grant not exceeding $40.0 million from the GCF, administered by ADB; 18 and (iii) a grant not exceeding $12.6 million from other

13 GOS. 2013. Water and Sanitation Sector Plan 2012 – 2016. Apia. Samoa. 14 ADB. 2018. Strategy 2030. Manila. 15 ADB. 2009. Energy Policy. Manila. 16 ADB. 2018. Country Operations Business Plan: 11 Small Pacific Islands Countries, 2019–2021. Manila. 17 During 51st ADB Annual Meeting, the Samoan Governor confirmed the proposed project is one of government’s

priority investments. 18 It is expected to be considered by the GCF Board in October 2019.

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development partners, administered by ADB. 19 The Government of Samoa will pay duties and taxes of about $9.5 million through exemption. EPC may consider providing cash contributions (about $3.5 million equivalent) to cover the SHP component, subject to the approval and confirmation by higher authorities of EPC. Either climate mitigation or climate adaptation is unknown at this stage.

Table 2: Indicative Financing Plan

Source Net Amountd

($ million) %

Asian Development Bank (Grant) 20.0 24.4 Green Climate Fund (Grant) a 40.0 48.7 Cofinancing Donors (to be confirmed) b 12.6 11.6 Government of Samoa c 9.5 15.3

Total 82.1 100.0 a Subject to GCF Board approval. b To be confirmed before the GCF funding proposal is being submitted. c Includes taxes and duties to be financed from government resources. To be confirmed after a final technical

feasibility study is prepared by the Consultant. d Government/EPC’s contribution for land compensations, surveys, and access roads for geo-technical works have

not been included yet. To be confirmed after a final technical feasibility study is prepared by the Consultant. Source: Asian Development Bank (ADB) estimates.

D. Implementation Arrangements

Table 3: Indicative Implementation Arrangements

Aspects Arrangements Indicative implementation period September 2020–August 2024 Indicative completion date 30 August 2024 Management

(i) Executing agency Ministry of Finance (ii) Key implementing agencies Electric Power Corporation

Source: ADB.

II. PROJECT PREPARATION AND READINESS 15. Since February 2018, the proposed project has been supported by TA-9242 (see footnote 2), which currently undertakes the project due diligence. Details of due diligence works for the project under TA-9242 are presented in Appendix 3. 16. The project readiness will be high when it is considered by ADB’s Board, as the Project is expected to be ‘procurement-ready’ for a turnkey contract with the completed basic design. To expedite project implementation, advance contracting and retroactive financing will apply for procurement of civil works (the turnkey contract) and consultancy contract (construction supervision) in accordance with the ADB Procurement Policy and Procurement Regulations for ADB Borrowers.20 The executing and implementing agencies have been advised that approval of advance contracting does not commit ADB to finance the Project.

19 The cofinancing arrangements with development partners during further project development. 20 ADB Procurement Policy & Regulations (2017, as amended from time to time) and their associated Staff Instructions

will apply.

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III. DELIBERATIVE AND DECISION-MAKING ITEMS A. Risk Categorization 17. The project is complex because (i) significant climate risks are envisaged; and (ii) the environment categorization is ‘A’.21 B. Project Procurement Classification 18. The project procurement classification is proposed as B. The Ministry of Finance will be the executing agency. EPC who has extensive experience in procuring and implementing projects in accordance with ADB’s guidelines will be the implementing agency. C. Scope of Due Diligence

Table 4: Scope of Due Diligence

Due Diligence Outputs Being undertaken by

Development coordination TA grant (9242) Economic analysis, financial management assessment, and financial analysis TA grant (9242) Gender analysis, collection of baseline data and gender action plan TA grant (9242) Safeguard screening and categorization results TA grant (9242) Initial poverty and social analysis & Summary poverty reduction and social strategy TA grant (9242) IDD ADB Project administration manual TA grant (9242) Risk assessment and management plan TA grant (9242) Safeguard documents on environment, involuntary resettlement, and/or indigenous peoples

TA grant (9242)

Sectors assessment TA grant (9242) IDD = integrity due diligence, TA = technical assistance. Source: Asian Development Bank.

D. Processing Schedule and Sector Group’s Participation

Table 5: Processing Schedule by Milestone

21 The initial categorization forms were approved on 26 March 2018. The Project is classified as A, because: (i) it is the

largest infrastructure project to be developed in Samoa and therefore will create impacts that are unprecedented in the country context; (ii) the Project will incur significant adverse environmental impacts that are irreversible. Further some impacts may affect an area larger than the sites or facilities subject to physical works. Three options (exact location within the catchment, dam type, and storage) are being considered and therefore the size of the reservoir and area of habitat to be lost cannot be determined at this stage; and (iii) it is a large dam within the definition by World Commission on Dams and is further subject to the requirements of the Pelosi Amendment.

Milestones Expected Completion Date 1. Concept approval October / November 2018 2. Draft feasibility study by consultant December 2018 3. Green Climate Fund Board consideration October 2019 4. Fact-finding mission a November 2019 5. Management review meeting a January 2020 6. Grant negotiation a February 2020 7. ADB’s Board consideration a April/May 2020 8. Grant signing a August 2020

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a The schedule is subject to be confirmed after GCF’s board consideration Source: Asian Development Bank. E. Key Processing Issues and Mitigation Measures

Table 6: Issues, Approaches, and Mitigation Measures

Key Processing Issues Proposed Approaches and/or Mitigation Measures

1. Delay of co-financing

Through GCF’s concept note, ADB will improve the quality of a GCF funding proposal to timely get GCF’s Board approval. The project team will initiate a cofinancing discussion with other development partners at an early stage of project development.

2. Limited capacity and lack of experience in implementing such scale

Both project management consultant and construction supervision consultant will help the IA minimize these capacity and experience gaps. The capacity building component has been included.

3. Land acquisitions, if required.

Consultations with private landowners, if any, during due diligence.

4. Potential social oppositions from the affected peoples who live near the project area.

Consultations with the necessary stakeholders (i.e., Samoan CSOs, inhabitants, users and owners of the land to be flooded by the new reservoir) will be conducted.

CSOs = civil society organizations, GCF = Green Climate Fund. Source: ADB.

9. Effectiveness a September 2020

8 Appendix 1

PRELIMINARY DESIGN AND MONITORING FRAMEWORK

Impact Reduced the impact of climate change adaptation and dependency on imported fossil fuels for power generation.

Results Chain Performance

Indicators with Targets and Baselines

Data Sources and Reporting

Mechanisms Risks

Outcome

By end of 2026

1. Resiliency on climate change-related flooding and water security, and renewable energy penetration increased.

a. Reduced flooding impact on infrastructure by X% and people with focus on women by X%

a. Project completion report

Climate change threats get worse Oil prices continue to decline

b. Improved availability of quality water during flooding by X% (Baseline turbidity: XX) c. Increase in additional electricity generation of about 683 MWh/year from the hydropower project by XXX. d. Reduced greenhouse gas emission by 280 tons/year.

b. Project completion report c. Project completion report

Outputs 1. Construction of the multipurpose dam for (i) flood retention; and (ii) seasonal water supply 2. Construction of the run-of-river SHP

By end of 2024 1a. Multipurpose dam with the estimated dam height of 55m and the indicative storage volume of 4.0 million m3. 1b. At least XX% skilled and unskilled women workers employed during construction. 2a. 0.26 MW hydropower plant constructed. 2b. At least XX% skilled and unskilled women workers are employed during construction.

Project progress reports, EPC annual report, semiannual safeguards monitoring reports, training attendance sheets, and ADB’s project completion report

Delays in project construction. Environmental and land acquisition issues delay implementation. Co-financings are not timely confirmed. Implementation arrangements are not firmed- up

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3. Strengthening of capacity for project management

3a. Consultancy services provided through the appointment of the CSC 3b. Capacity building program conducted for operation and maintenance of the dam with participation of at least XX% women.

Key Activities with Milestones 1. Procure and construct the multipurpose dam and 0.26MW SHP 1.1 Carry out tender process for turnkey contract for the multipurpose dam and 0.26MW SHP (May–

Aug 2019) 1.2 Evaluate and report on bids, and award contracts (Sep 2019–Apr 2020) 1.3 Design, supply, build and commission of the dam and SHP (May 2020 – Apr 2023) 2. Conduct O&M training. 2.1 Design O&M program (Jan 2023 – Apr 2023) 2.2 Conduct O&M training for solar electric and hybrid equipment for a year after commissioning (May

2023–May 2024) 3. Provide efficient project implementation and management. 3.1 Recruit and field CSC team (Q2 2020) 3.2 Prepare detailed project implementation schedule, technical designs, safeguards, and gender

action plan components (Q3 2020) 3.3 Evaluate training programs and report (Q2 2024) 3.4 The CMC team prepares a final report after 5 years of activities (Q3 2024) Inputs ADB: $20.0 million (Grant) GCF: $40.0 million (Grant) Other Development Partner(s): $12.6 million (Grant) Government: $9.5 million (Taxes and duties exemptions) Total: $82.1 million

ADB = Asian Development Bank, CSC = construction supervision consultant, GCF = Green Climate Fund, EPC = electric power corporation, GWh = gigawatt per hour, m3 = cubic meter, MW = megawatt, SHP = small hydropower plant, O&M = operations and maintenance, Q = quarter. Source: ADB.

Endorsed by: Olly Norojono

Director, PATE

10 Appendix 2

PROJECT PROCUREMENT CLASSIFICATION

Characteristic Assessor’s Rating:

Is the procurement environment risk for this project assessed to be high based on the country and sector and/or agency risk assessments?

☒Yes ☐No

Are multiple (typically more than three) and/or diverse executing agencies and/or implementing agencies envisaged during project implementation? Do they lack prior experience in implementation under an ADB-financed project?

☐Yes ☒No ☐Unknown

Are multiple contract packages and/or complex and high-value contracts (compared with recent externally financed projects in the developing member country [DMC]) expected?

☐Yes ☒No ☐Unknown

Does the project plan to use innovative contracts (public–private partnership, performance-based, design and build, operation and maintenance, etc.)?

☐Yes ☒No ☐Unknown

Are contracts distributed in more than three geographical locations? ☐Yes ☒No ☐Unknown

Are there significant ongoing contractual and/or procurement issues under ADB (or other externally) financed projects? Has misprocurement been declared in the DMC?

☐Yes ☒No ☐Unknown

Does the DMC have prolonged procurement lead times, experience implementation delays, or otherwise consistently fail to meet procurement time frames?

☐Yes ☒No ☐Unknown

Do executing and/or implementing agencies lack capacity to manage new and ongoing procurement? Have executing and/or implementing agencies requested ADB for procurement support under previous projects?

☒Yes ☐No ☐Unknown

Regional department’s overall recommendation

Overall project categorization recommended ☐ Category A

☒ Category B

Procurement, Portfolio, and Financial Management Department’s recommendation

PFP2 agrees with Procurement Risk Categorization of “B”. Source: ADB.

Appendix 3 11

ONGOING TECHNICAL ASSISTANCE FOR PROJECT PREPARATION A. Background

1. Under TA 9242, due diligence works are currently being undertaken:

• Technical, economic and financial: Currently being undertaken as part of the detailed feasibility study of the proposed project;

• Governance: Financial management, technical and implementation capacity, procurement, anticorruption, policy and legal;

• Poverty and Social: Poverty reduction and social impact need to be assessed. Gender analysis is being undertaken;

• Safeguard: Environment, involuntary resettlement, and indigenous peoples’ framework and plans are being undertaken;

• Stakeholder’s participation: Consultation and participation will be key in project formulation.

B. Key Outputs 2. Phase 1: Scoping Study and Technical Feasibility Assessment

(i) Review existing reports and data, scope up the required investigations, set up and then interpret the results, technical feasibility studies and prepare technical due diligence reports for the Alaoa Multi-Purpose Dam Project covering the rationale, scope, technologies, technical specifications, cost, design, schedule, implementation arrangements, risks, and mitigation measures.

3. Phase 2: Detailed Feasibility Assessment for the Selected Dam Design Option and Procurement Support – Phase 2 scope is subject to be confirmed depending on the result of Phase 1: Scoping Study and Technical Feasibility Assessment and performance of the selected consultant under Phase 1 and is not covered under the initial contract at the time of signing.

C. Consulting Services, Cost Estimate, and Proposed Financing Arrangement

4. ADB has recruited a consulting firm to conduct a detailed feasibility assessment and provide procurement support to the implementing agency under quality and cost-based selections. The latest contract amount for due diligence works is $1.35 million, which is financed on a grant basis by ADB’s TASF-6. The executing agency and the implementing agency provide counterpart supports in the form of office and counterpart staff time. The targeted period for implementation of the consultancy contract is 18 December 2017 to 14 June 2019, while the final report is to be submitted by April 2019; the remaining time will further support the executing agency in procurement and other activities.

D. Scope of services and major outputs. Under the current lump-sum based contract, the consultant will submit the following deliverables:

Deliverables Status

Inception report Submitted Draft, midterm, and final technical feasibility study reports; Both Draft and midterm reports

have been submitted

12 Appendix 3

A Final report is to be submitted by Q1 2019

Geological/Geotechnical Factual Report The draft report has been submitted.

Rapid Assessment and EIA Work Program Submitted Brief Report on Baseline Conditions Submitted Economic Report and Financial Report By Dec 2018 EIA Report and Draft Due Diligence Report (DDR) or Resettlement Plan

By Dec 2018 or Q1 2019

Terrestrial Flora & Fauna Survey Report By Q1/Q2 2019

Geomorphology and Fluvial Systems Report By Q1/Q2 2019 Aquatic Ecology Survey Report following Dry Season Survey By Q1/Q2 2019 Final Terrestrial Invertebrate Assessment Report By Q1/Q2 2019 Detailed Design and Procurement Support To be confirmed after the fact-

finding mission

Appendix 4 13

INITIAL POVERTY AND SOCIAL ANALYSIS Country: Samoa Project Title: Alaoa Multipurpose Dam Project

Lending/ Financing Modality:

Project Grant Department/ Division:

PARD/PATE

I. POVERTY IMPACT AND SOCIAL DIMENSIONS

A. Links to the National Poverty Reduction Strategy and Country Partnership Strategy

The Alaoa Multi-Purpose Dam (the Project) is consistent with the Strategy for the Development of Samoa (SDS) 2016/17-2019/20 and its objective to “Accelerating Sustainable Development and Broadening Opportunities for All”. The project’s aim of providing water supply, renewable energy and mitigating against climate change risks such as flooding, support the SDS key outcomes which include access to clean water and sanitation; quality energy supply; environmental resilience improved and climate and disaster resilience. Furthermore, the project is in line with the (i) Samoa Energy Sector Plan 2017- 2022 which aims to address sustainable and affordable energy supply for all by increasing renewable energy and improving electricity among others; and the (ii) Water and Sanitation Sector Plan 2012-2016 with the goal of providing reliable, clean, affordable water and basic sanitation within the framework of Integrated Water Resources Management, for all people in Samoa to sustain health improvements and alleviate poverty. The Project is also consistent with ADB Pacific Approach (2016-2020) and Country Operations Business Plan for Samoa, 2016–2018. The Pacific Approach which serves as the ADB’s country partnership strategy for Samoa highlights the need to reduce cost of doing business, manage risks, and providing social services.

B. Poverty Targeting

General Intervention Individual or Household (TI-H) Geographic (TI-G) Non-Income MDGs (TI-M1, M2, etc.)

C. Poverty and Social Analysis 1. Key issues and potential beneficiaries. Samoa has made good progress on universal primary education, reducing child mortality, improving maternal health and ensuring environmental sustainability. The country has also improved in terms of both food and basic needs poverty from 2008 to 2013/14 and incidence of food poverty and basic needs declined in 2013/14 by 12% and 30% respectively from 2008 and well below the 2002 levels.1 However, the decline in the incidence of poverty was partially driven by the significant increase in government spending, which came at a very high fiscal cost as fiscal deficit and public debt increased.2 The provision of formal employment and income-generating opportunities also remains critical issues facing the country. Unemployment rates are highest for youth, especially young women, with many women expected to remain in unpaid work in the home. Other hardships experienced by Samoan households include (i) lack of access to public services, quality education, reliable and affordable power, and safe water and sanitation; (ii) lack of adequate income to meet basic household needs and customary obligations to the family, village community, and church; and (iii) lack of opportunities to participate fully in the socioeconomic life of the community. Creation of formal employment and income-generating opportunities is a critical issue for communities in urban and rural areas. The private sector, which could provide employment and income generating opportunities, is constrained by lack of infrastructure and high costs of essential services. Samoa’s reliance on fossil fuels poses a major constraint to the provision of sustainable and reliable electricity services at affordable prices, which is necessary to promote economic growth in both the private and public sector. Access to water services also needs to be improved particularly in the event of natural disaster. The public including the surrounding communities and private sector will benefit from a reliable energy and water supply and increased resilience against natural disasters. Local people in the project sites will also benefit from the project through the provision of unskilled and semi-skilled labor work during project implementation.

2. Impact channels and expected systemic changes. Flood protection will increase the resilience of the poor and vulnerable. The provision of water supply will provide households with access to water for drinking, cooking, washing and hygiene during drought. A more stable water supply is also expected to have impacts on health and productivity of the beneficiaries. The hydro power will lead to an increase in renewable energy and decrease power costs. Stable electricity supply will allow households to engage into productive and income generating activities. Less fluctuation of energy prices will also allow households to manage monthly energy bills better, and cheaper tariffs will produce savings which could be used for family welfare.

3. Focus of (and resources allocated in) the TRTA or due diligence. A Social Development and Gender Specialist will be engaged to undertake social, poverty, and gender analysis. In particular, the TRTA will consider the project designs that can enhance the benefits to the communities and mitigate any potential risks during project construction and operation.

4. Specific analysis for policy-based lending. N/A

1 Samoa National Statistics Office and UNDP Pacific Centre. 2016. Samoa Hardship and Poverty Report. Analysis of the 2013/14

Household Income and Expenditure Survey. Apia. 2 Ibid.

14 Appendix 4

II. GENDER AND DEVELOPMENT 1. What are the key gender issues in the sector/subsector that are likely to be relevant to this project or program? Households consume half of Samoa's water supply and women are the key managers of household water rendering them very knowledgeable about current water sources, quality and reliability, and impacted by restrictions to water usage. They are also key players in implementing improved hygiene behaviors. Men are more concerned with water for irrigation or for livestock, however, men traditionally have a greater role than women in public decision-making in water management. The National Disaster Management Office has identified that women took the lead in household activities after the 2009 tsunami, including gathering household belongings, cooking, washing and looking after children and other family members. Men were identified as doing physical labor removing debris and trees, rebuilding houses, replanting crops and fetching water. An analysis of the deaths from the tsunami also identified that 60% were female, with the elderly and infants over-represented in the victims. The Samoa Energy Sector Plan 2017- 2022 identifies energy as critical to the daily life of women for cooking and other household tasks, and productive work and rural industry such as food processing. It notes the need to address the different needs and priorities of women and women due to their gendered roles in the family and community, highlighting the need to decrease women’s time from inefficient and unreliable energy systems.3 In 2012, the labor force participation rate is 24% for women compared to 40% for male.4 Persons in paid work comprised 20% women of the total working age population compared to 29.8% male. Women’s share of wage employment in a non-agriculture sector is only 37.5%. Micro businesses are a large employer of women and improved access to electricity will provide more opportunities for their involvement in livelihood activities.

2. Does the proposed project or program have the potential to make a contribution to the promotion of gender equity and/or empowerment of women by providing women’s access to and use of opportunities, services, resources, assets, and participation in decision making?

Yes No Please explain. This will be confirmed during project preparation. In particular, gender features will be explored in the project design such as building the capacity of both men and women to manage natural disasters and ways on how women can maximize project benefits. Women’s participation in consultations will be ensured.

3. Could the proposed project have an adverse impact on women and/or girls or widen gender inequality? Yes No Please explain. There are no adverse impacts related to widening gender inequality although HIV/AIDS infection

and other social issues which may affect women are potential risks during construction due to the presence of outside contractors. This will be the subject of an HIV/AIDS awareness and prevention program and mitigating measures to be identified during project preparation.

4. Indicate the intended gender mainstreaming category: GEN (gender equity) EGM (effective gender mainstreaming) SGE (some gender elements) NGE (no gender elements)

III. PARTICIPATION AND EMPOWERMENT

1. Who are the main stakeholders of the project, including beneficiaries and negatively affected people? Identify how they will participate in the project design.

Key stakeholders will be consulted such as government officials at national level like representatives from the Ministry of Natural Resources and Environment (Disaster Management Office, Lands and Environment, Forestry, Planning and Urban Management Agency), Samoa Water Authority, Electric Power Corporation to determine the social and environmental impacts to upstream and downstream communities and any issues which should be taken into account during project preparation and implementation. Local or International NGOs present in Samoa will be involved in discussions to ascertain knowledge of the areas and people’s needs. At the village level, community representatives (chiefs, official representatives of the village, and women) will be consulted. The government will ensure community and landowners’ participation in planning, implementation, and monitoring and evaluation of the Project. Particular attention to the needs of vulnerable groups, especially those below the poverty line, the landless, the elderly, and women, will be fully informed of the process.

2. How can the project contribute (in a systemic way) to engaging and empowering stakeholders and beneficiaries, particularly, the poor, vulnerable and excluded groups? What issues in the project design require participation of the poor and excluded? Public meetings and focus group discussions will be utilized to communicate and consult with stakeholders including collaboration with community-based organizations to ensure effective outreach, mobilization and participation of concerned communities, vulnerable and project affected groups. Consultations with poor and vulnerable groups will particularly focus on how they could maximize project benefits and prevent adverse impacts including during construction and operation.

3. What are the key, active, and relevant civil society organizations in the project area? What is the level of civil society organization participation in the project design?

Information generation and sharing (H) Consultation (H) Collaboration Partnership

3 Samoa National Statistics Office and UNDP Pacific Centre. 2016. Samoa Hardship and Poverty Report. Analysis of the 2013/14

Household Income and Expenditure Survey. Apia. 4 ADB. 2016. Gender Statistics: the Pacific and Timor-Leste. Manila.

15

Nongovernment organizations and civil society organizations will be consulted during the project design to assist in identifying pro-poor project features and adverse impacts which need to be mitigated. Their specific participation either through provision of specific services and/or involvement during monitoring and evaluation processes will be assessed during project preparation.

4. Are there issues during project design for which participation of the poor and excluded is important? What are they and how shall they be addressed? Yes No Meaningful participation by the poor and vulnerable persons particularly at the project downstream area who could be potentially affected by the multi-purpose dam operation will be ensured. A pre-implementation stakeholder and consultation plan has been prepared to help monitor all consultations required.

IV. SOCIAL SAFEGUARDS A. Involuntary Resettlement Category A B C FI

1. Does the project have the potential to involve involuntary land acquisition resulting in physical and economic displacement?

Yes No The project and all its physical components (the dam, penstock, reservoir, ancillary facilities, access roads within the site, power station, powerlines, spillway, pipes going to the water treatment plant) will be within the existing government-owned land. However, there are some gardens and crops owned by a few land users which could be affected. There is no existing land use by surrounding communities except occasional firewood gatherings and subsistence fishing. There are alternative sources of these resources within the government-owned land which would potentially replace any anticipated restriction to access within the project site. This will still be further confirmed during ensuing survey and due diligence.

2. What action plan is required to address involuntary resettlement as part of the PPTA or due diligence process?

Resettlement plan Resettlement framework Social impact matrix

Environmental and social management system arrangement None

B. Indigenous Peoples Category A B C FI

1. Does the proposed project have the potential to directly or indirectly affect the dignity, human rights, livelihood systems, or culture of indigenous peoples? Yes No The project will not impact any distinct and vulnerable indigenous peoples as defined by ADB SPS. 2. Does it affect the territories or natural and cultural resources indigenous peoples own, use, occupy, or claim, as their ancestral domain? Yes No

3. Will the project require broad community support of affected indigenous communities? Yes No 4. What action plan is required to address risks to indigenous peoples as part of the PPTA or due diligence process?

Indigenous peoples plan Indigenous peoples planning framework Social Impact matrix Environmental and social management system arrangement None

V. OTHER SOCIAL ISSUES AND RISKS

1. What other social issues and risks should be considered in the project design?

Creating decent jobs and employment Adhering to core labor standards (M) Labor retrenchment Spread of communicable diseases, including HIV/AIDS(M) Increase in human trafficking Affordability Increase in unplanned migration Increase in vulnerability to natural disasters Creating political instability Creating internal social conflicts Others, please specify __________________

2. How are these additional social issues and risks going to be addressed in the project design? Further assessment on the potential social issues and risks will be assessed during project preparation and necessary mitigating measures will be built into the project design and implementation plan.

VI. PPTA OR DUE DILIGENCE RESOURCE REQUIREMENT

1. Do the terms of reference for the PPTA (or other due diligence) contain key information needed to be gathered during PPTA or due diligence process to better analyze (i) poverty and social impact; (ii) gender impact, (iii) participation dimensions; (iv) social safeguards; and (v) other social risks. Are the relevant specialists identified?

Yes No

2. What resources (e.g., consultants, survey budget, and workshop) are allocated for conducting poverty, social and/or gender analysis, and participation plan during the PPTA or due diligence? A Social Development and Gender Specialist (national and international) have been engaged to undertake the social, poverty and gender assessment and prepare consultation and participation plan.