World Bank Announces Support to Improving Electricity Services in the Federated States of Micronesia

May 29, 2014

WASHINGTON, D.C., May 29, 2014 – The World Bank's Board of Executive Directors today approved a US$14.4 million grant from the International Development Association (IDA) to support the Energy Sector Development project in the Federated States of Micronesia (FSM). The project will increase the available power generation capacity and efficiency of the four state power utilities which will over time lead to more sustainable and affordable electricity tariffs throughout the country.

“Improving energy services in the four states of Micronesia will deliver wide-ranging benefits for thousands of families, businesses, industry, and the government,” said Franz Drees-Gross, World Bank Country Director for the Pacific Islands. “Providing more efficient and affordable energy will enhance economic development and improve the quality of peoples’ lives."

FSM is a federation of four semi-autonomous states (Chuuk, Kosrae, Pohnpei and Yap), each with its own power utility. The Energy Sector Development project will support each of the four state power utilities to improve its overall performance by financing the purchase and installation of some of the most immediate equipment needs and supporting the development and implementation of operations and maintenance plans.

The project will also finance the preparation of energy master plans in each of the four States. These plans will then contribute to the National Energy Master Plan (NEP), which provides an integrated approach to achieve the national goals to reduce the country’s reliance on imported fuels, increase access to modern energy services, and increase renewable energy to 30% by 2020.

In addition, the project will strengthen the capacity of the National Department of Resources and Development’s Energy Division and the Association of Micronesian Utilities to collect data and statistics, undertake utility benchmarking, and implement the National Energy Policy.

Located in the North Pacific, FSM is comprised of 607 islands (74 of which are inhabited) and has a population of 102, 834 people. On average about 55 percent of all households in FSM have some form of electrification, although these rates vary widely among the four states, with Kosrae having a 98 percent electrification rate and Chuuk only 26 percent.

The Energy Sector Development project will be implemented by the Energy Division of the National Department of Resources and Development.

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