Nauru SMARTEN Prodoc Signed by Both Parties

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Nauru SMARTEN Prodoc Signed by Both Parties DocuSign Envelope ID: 0EC1521D-7598-4702-9C3D-55DE41ED89D1 1 | Page DocuSign Envelope ID: 0EC1521D-7598-4702-9C3D-55DE41ED89D1 28-Sep-2020 2 | Page DocuSign Envelope ID: 0EC1521D-7598-4702-9C3D-55DE41ED89D1 List of Abbreviations & Acronyms ADB Asian Development Bank AUD Australian Dollar BAU Business-As-Usual BESS Battery Energy Storage System CCM Climate Change Mitigation CO2 Carbon Dioxide DCIE Department of Commerce, Industry and Environment DSM Demand Side Management DoT Department of Transport EC Energy Conservation EE Energy Efficiency EMRS Energy Monitoring and Reporting System EPA Environmental Protection Agency ESMP Environmental and Social Management Plan EEZ Exclusive Economic Zone EU European Union FY Fiscal Year GDP Gross Domestic Product GEF Global Environmental Facility GHG Green House Gas GoN Government of Nauru GoNZ Government of New Zealand GWh Giga Watt hour INDC Intended Nationally Determined Contribution IRR Implementing Rules and Regulations IUCN International Union for Conservation of Nature kg kilogram km kilometer km2 Square kilometer ktoe kiloton oil equivalent kW kilo Watt kWh kilo Watt hour kWp kilo Watt peak LC Low Carbon LCF Low Carbon Fund LCD Low Carbon Development LFA Log Frame Analyses LPG Liquefied Petrol Gas MFAT Ministry of Foreign Affairs and Trade MoF-PAD Ministry of Finance – Planning and Aid Division MRV Monitoring Reporting and Evaluation MW Mega Watt MWac Mega Watt alternative current MWdc Mega Watt direct current MWh Mega Watt hour MWp Mega Watt peak 3 | Page DocuSign Envelope ID: 0EC1521D-7598-4702-9C3D-55DE41ED89D1 M&E Monitoring and Evaluation NBoS Nauru Bureau of Statistics NCBO Nauru Community Based Organization NDC Nationally Determined Contribution NEPF Nauru Energy Policy Framework NERM Nauru Energy Road Map NPC Nauru Phosphate Corporation NSDS Nauru Sustainable Development Strategy NUC Nauru Utilities Corporation OTEC Ocean Thermal Energy Conversion O&M Operation and Maintenance PB Project Board PIC Pacific Island Country PIF Project Information Form PIR Project Implementation Review PV Photo Voltaic RE Renewable Energy RONPHOS Republic Of Nauru Phosphate RPC Regional Processing Centre SAIDI System Average Interruption Duration index SAIFI System Average Interruption Frequency index SCADA Supervisory Control And Data Acquisition SDG Sustainable Development Goal SIDS Small Islands Developing States SMARTEN Supporting Mainstreamed Achievement of Roadmap Targets on Energy in Nauru SOE State Owned Enterprise SPREP Secretariat of the Pacific Regional Environment Programme TA Technical Assistance tCO2-eq ton Carbon dioxide equivalent ToC Theory of Change UNDP United Nation Development Program UNFCCC United Nations Framework Convention on Climate Change USD United States Dollar 4 | Page DocuSign Envelope ID: 0EC1521D-7598-4702-9C3D-55DE41ED89D1 I. TABLE OF CONTENTS List of Abbreviations & Acronyms ................................................................. Error! Bookmark not defined. I. Table of Contents ............................................................................................................................... 5 II. Development Challenge ..................................................................................................................... 6 III. Strategy ............................................................................................................................................ 15 IV. Results and Partnerships .................................................................................................................. 20 V. Project Results Framework .............................................................................................................. 49 VI. Monitoring and Evaluation (M&E) Plan ........................................................................................... 52 VII. Governance and Management Arrangements ................................................................................ 56 VIII. Financial Planning and Management ............................................................................................... 62 IX. Total Budget and Work Plan ............................................................................................................ 65 X. Legal Context .................................................................................................................................... 71 XI. Risk Management............................................................................................................................. 72 XII. Mandatory Annexes ......................................................................................................................... 77 Annex 1: Project Map and Geospatial Coordinates of project sites ........................................................... 77 Annex 2: Multi Year Work Plan ................................................................................................................... 78 Annex 3: Monitoring Plan: .......................................................................................................................... 86 Annex 4: Stakeholder Engagement Plan ..................................................................................................... 91 Annex 5: UNDP Risk Log .............................................................................................................................. 99 Annex 6: Overview of Technical Consultancies ........................................................................................ 104 Annex 7: Terms of References .................................................................................................................. 108 Annex 8: Procurement Plan ...................................................................................................................... 111 Annex 9: GEF Core indicators .................................................................................................................... 112 Annex 10: GEF 7 Taxonomy ...................................................................................................................... 113 5 | Page DocuSign Envelope ID: 0EC1521D-7598-4702-9C3D-55DE41ED89D1 II. DEVELOPMENT CHALLENGE Development Challenge and Relevance to National Development Priorities, Global Environment and Sustainable Development Goals (SDGs) The Republic of Nauru is a Micronesian country island lying less than 60 km south of the equator. With a total land area of 21 km2 and a population standing at approximately 12,700 in 20181, Nauru is the third smallest2 and second least populated3 independent country in the world. Because of the small size and population, Nauru has limited indigenous human and natural resources, which are largely outsources from abroad. The climate of the island is warm and humid year around, with heavier rainfalls occurring between November and February; however, owing it to its vicinity to the equator, the country is practically immune from severe natural events, such as cyclones. Nauru had some of the largest phosphate resources in the world, which were exploited by foreign countries since the early 1900s. Nauru became independent in 1968, and with its independence the country also gained control over its phosphate mining operations, which were conducted by the newly established Nauru Phosphate Corporation (NPC). For a couple of decades, phosphate mining made the island one of the richest countries per capita in the world. Regrettably, the 2002 downfall of the phosphate mining industry, due to exhaustion of reserves, coupled with years of poor financial management caused the economy of Nauru to collapse. The country was left with no sustainable source of income and in addition, most of its inland territory had been severely deteriorated by uncontrolled mining, which rendered the land infertile and inhospitable, with virtually the entire population living along the coast, the only exception being in the Buada district, which is built around the homonym lagoon. Land remediation is extremely expensive, due to the presence of countless limestone pinnacles spread throughout the island, and currently is not proceeding at any significant speed. After falling to a mere USD 20.4 million in 2007, the GDP has increased to USD 114.7 million in 20184, or about USD 9,000/capita. Currently, Nauru generates income from selling fishing licenses, a business somehow hampered by a relatively small Exclusive Economic Zone (EEZ) of 320 000 km2 and an estimated loss of 40% of its marine life because of phosphate runoffs5 . Another significant portion of income is generated through the three Nauru Refugee Processing Centres (RPCs), a detention facility for asylum- seekers in Australia built in Nauru in 2001 in exchange for financial aid. The centers have been closed and re-opened, and their future operation is uncertain due to protest raised by international activists against the detention facility. The last potential substantial source of income, which has not materialized yet, could come from secondary mining. After the collapse of the phosphate mining industry, NPC has been reorganized into the Republic of Nauru Phosphate (RONPHOS) Corporation. The company is actively testing the financial viability of secondary mining, which now does not seem feasible. Fishing is essentially carried out just for self-sustenance, while agriculture is limited to small areas around the Bauda lagoon, because of the topside pinnacles. 1 https://data.worldbank.org/country/nauru?view=chart
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