Early Warning System

Regions

East Asia and Pacific

Geographic location where the impacts of the investment may be experienced.

Countries

Palau

Geographic location where the impacts of the investment may be experienced.

Financial Institutions

Asian Development Bank (ADB)

International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.

Project Status

Proposed

Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.

Bank Risk Rating

Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."

Borrower

Government of Palau

A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.

Sectors

Energy

The service or industry focus of the investment. A project can have several sectors.

Investment Type(s)

Grant, Loan

The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.

Investment Amount (USD)

$ 10.00 million

Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.

Loan Amount (USD)

$ 10.00 million

Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.

Bank Documents

Project Disclosure PDF

Other Related Projects

Primary Source

Original disclosure @ ADB website

Updated in EWS Jun 26, 2024

Disclosed by Bank May 7, 2024

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Project Description

If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

As stated by the ADB, the project will install a total of 15 megawatt hour battery energy storage system (BESS), which will enable the grid to increase the utilization of outputs from the solar photovoltaic power plant and provide grid services to Koror-Babeldaob grid to equip Palau Public Utilities Corporation (PPUC) with tools to optimize the use of renewable energy. Protection systems will also be upgraded to reduce the frequent blackouts of the grid system, especially with the expected increase of outputs from the solar photovoltaic power plant. The project also includes a pilot vehicle-to-grid project, as a future option for further optimization of renewable energy generation.

Although Palau enjoys almost 100% electrification rate, it relies heavily on imported diesel for power generation. Over 97% of power generation is based on fossil fuel (diesel) and 3% on solar. To reduce reliance on fossil fuel and to meet the Nationally Determined Contribution target, Palau plans to integrate renewable energy through (i) two phases of independent power producers (IPPs) engagement, and (ii) solar roof top installations. The first phase of the IPP project (IPP-1) is expected to be complete with a 13.2 megawatt-peak (MWp) solar system and a 15 megawatt-hour (MWh) battery energy storage system (BESS) by early 2024. This IPP-1 solar system will bring the share of renewable energy to 20% of Palau's generation mix if the grid can accommodate its outputs. This will depend on optimizing the intermittent outputs of IPP-1 by minimizing curtailment.

PPUC plans to install a BESS in its grid system to achieve this goal. Reducing curtailment is critical to optimizing PPUC's operational efficiency because of the take-or-pay arrangements in the power purchase agreement. In addition to BESS, the government plans to make better use of IPP-1 generation capacity with an introduction of vehicle-to-grid (V2G) solutions. As a small island nation with limited demand for equipment necessary for V2G, a public sector pilot initiative is needed to test and showcase the effectiveness of V2G solutions.

Early Warning System Project Analysis

For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

The ADB categorized the project risks as follows:

Environment - B;
Involuntary Resettlement - C;
Indigenous Peoples - C.

Investment Description

Here you can find a list of individual development financial institutions that finance the project.

Asian Development Bank (ADB)

Information on the amount of the grant was not available at the time of disclosure.

Private Actors Description

A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

As stated on the company's website, the Palau Public Utilities Corporation (PPUC) is a public corporation established to manage and operate the electrical power and the water and wastewater systems of the Republic of Palau.

Private Actor 1	Private Actor 1 Role	Private Actor 1 Sector	Relation	Private Actor 2	Private Actor 2 Role	Private Actor 2 Sector
-	-	-	-	Palau Public Utilities Corporation (PPUC)	Undisclosed	Energy

Contact Information

This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

ADB Team Leader:

Yuki Inoue - Energy Specialist

No contacts provided at the time of disclosure.

ACCESS TO INFORMATION

You can submit an information request for project information at: https://www.adb.org/forms/request-information-form

ADB has a two-stage appeals process for requesters who believe that ADB has denied their request for information in violation of its Access to Information Policy. You can learn more about filing an appeal at: https://www.adb.org/site/disclosure/appeals

ACCOUNTABILITY MECHANISM OF ADB

The Accountability Mechanism is an independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an Asian Development Bank-financed project. If you submit a complaint to the Accountability Mechanism, they may investigate to assess whether the Asian Development Bank is following its own policies and procedures for preventing harm to people or the environment. You can learn more about the Accountability Mechanism and how to file a complaint at: http://www.adb.org/site/accountability-mechanism/main.