The development objective of the project is to improve the efficiency and available capacity of electricity supply, and to strengthen the planning and technical capacities of the state power utilities and the National Government in the energy sector.
Component 1: Improvement in efficiency and available capacity of electricity supply – Supports fuel savings by improving the fuel efficiency of power generation equipment and increasing the penetration of renewable energy. Supports performance improvement activities and maintenance plans for the four utilities, including key investments in equipment needed to increase revenues and reduce energy losses.
Component 2: National and state energy planning) – This component finances the preparation of Energy Sector Master Plans for the four FSM states and the development of a National Energy Sector Master Plan. These plans will follow a “whole-of-sector” approach to assess energy needs, taking into account environmental and social assessment findings and safeguard issues. They will also confirm the power infrastructure investments needed in the first five years and, as a second phase, develop feasibility studies and environmental and social impact assessments of the top-priority projects.
Component 3: Technical assistance and project management