FSMIS (July 1, 2013): Secretary Kensley Ikosia, FSM Department of Finance and Administration, was in Yap the week of June 24 to attend the signing of the Yap Renewable Energy Development Project loan with the Asian Development Bank (ADB).
The FSM Congress, through FSM Public Law no. 17-80, authorized the President (or his designee) to “execute a sovereign guarantee” to secure the loan for the State of Yap according to the terms of this specific law.
Negotiations took place on April 15-17 in Manila, Philippines, detailing parties’ responsibilities under the renewable energy project loan, involving officials from the FSM National Government (the guarantor), the ADB as the lender of funds, and the Yap State Government as the borrower. Secretary Ikosia headed the FSM Delegation to the negotiations, which included key staff from the Department of Resources and Development and the Department of Justice.
Yap State is required to lend the loan proceeds to the Yap State Public Service Corporation (YSPSC) – the project implementer.
The FSM guarantees to ADB the punctual repayment of the loan with full indemnity to the FSM Government by the Yap State Government for payments and costs of making payments to ADB. The FSM also has the right to offset against Yap’s share of national taxes as the guarantor for this particular loan.
“ADB’s financing includes an ordinary capital resource loan of almost $4.7 million and a loan of nearly $4.4 million from the concessional Asian Development Fund. The Yap State Government will provide counterpart funds of over $2.1 million for a total of more than $11.1 million. The project will be carried out over 4.5 years with an estimate completion date of June 2017”, the ADB reported on June 26.
The Yap Renewable Energy Development Project will include construction of grid-connected wind farm with output power of 1.4 megawatts; a 300kilowatts solar power system; and installation of a 1.8 megawatts diesel generator. Some funds will be directed to capacity building aspects within the power utility and communities to ensure sustainability.
The wind and solar power generation systems will have a net reduction effect of over 22% the current energy delivery in Yap according to project documents provided to the Office of the FSM President on April 24.
The project is envisioned to slash Yap’s reliance on fuel import and enhance energy security, contributing to the FSM National Energy Policy objective of reducing dependence on fossil fuel by 30 percent and increasing energy efficiency by 50 percent by year 2020.
For further information, call FSM Information Office at 320-2548 or write email@example.com.