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Partnership Brief Cofinancing with New Zealand 2 3 Contents

3 Defining the

4 Project Portfolio

6 Highlights

9 Case Study

Tables

10 Direct Value-Added Cofinancing New Zealand’s Funding for ADB 11 Technical Assistance Projects

@2011

All rights reserved. Published 2011. Printed in the .

The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular or geographic , or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. ADB encourages printing or copying information exclusively for personal and noncommercial use, with proper acknowledgment of ADB. Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without the express, written of ADB.

Note: In this publication, “$” refers to US unless otherwise indicated. 2 3

Defining the Partnership

ew Zealand and the Asian while projects are also upcoming Aside from its cofinancing Development Bank (ADB) to improve cargo and passenger support for ADB projects and Nin recent years have shipping in and energy technical assistance, it also established a growing cofinancing access in rural coordinates with ADB through partnership in the Pacific that is (see Project Portfolio section). regional groupings, including the laying the groundwork for further The New Zealand Aid Pacific Forum, under which cooperation, particularly in the Programme,1 managed by the they worked closely in 2009–2010 difficult areas of infrastructure Ministry of Foreign Affairs to develop a 10-year Pacific and education in the far-flung and Trade (MFAT), directs the statistics strategy and action plan. islands of the . country’s development assistance. Other cooperative activities have As a founding member, The Pacific is its core geographic included the implementation New Zealand has a long-standing focus—receiving more than half of the Pacific Regional Audit role in ADB’s efforts at reducing of the total aid budget—while it and support to the poverty in and the Pacific. also works in Asia in Southeast Pacific Association of Supreme That partnership is now moving Asia (see map for focus countries, Audit Institutions. forward through their mutual page 6). It sees its work with New Zealand also provides commitments to aid effectiveness ADB and other multilateral important support for ADB and harmonization, as outlined development institutions as a projects, indirectly, through the in the Paris Declaration on proven and effective means to significant contributions of New Aid Effectiveness and the reduce poverty and conflict, affect Zealand-based consultants (see Accra Agenda for Action. governance issues, and help in contractors/suppliers, page 10). This is evident in recent humanitarian crises worldwide. Additionally, ADB and long-term education projects in In its development efforts, New Zealand have been , several projects to repair New Zealand puts top priority on exploring ways to intensify their and improve roads in the Solomon economic growth, infrastructure, financing partnership operations Islands, and participation in the education, law and justice, through more systematic, Pacific Region Infrastructure and . early consultations at the Facility (PRIF). Attesting to field level in priority countries

the success of such efforts, a 1In 2009, the former New Zealand Agency and more frequent contact further project is now under way for International Development (NZAID) was and coordination with ADB to broaden improvements to reintegrated into MFAT and the activities of NZAID renamed the New Zealand headquarters and regional offices. transport in the , Aid Programme. Early identification of financing 4 Partnership Brief 5

partnership opportunities at the country strategy and programming levels in key countries and in those sectors of common interest is among the ways they are enhancing cofinancing arrangements. New Zealand has always emphasized increased harmonization of jointly implemented and cofinanced operations, including giving a more integrated role to the participating governments, their agencies, and other financing partners. This approach was reflected in the Education Sector Project II in Samoa, discussed later, under which cofinancing was agreed and contracted among all the responsible participants (New Zealand Aid Programme, Australian Agency for Project International Development, ADB, and the Government of Samoa) under an umbrella cofinancing agreement. Portfolio ADB and New Zealand are also committed to the streamlining ew Zealand aims to harmonization of development of cofinancing processes through allocate some $525 million efforts in addressing difficult the adoption of standardized, Nfor international aid in problems. project-specific cofinancing 2011/12, more than agreement templates. Early half of that slated for the Pacific Reforming Education discussions have also been region. In particular, its largest in Samoa initiated to replace the outdated development engagements—and In Samoa, for example, a and fully utilized, single-country most significant cooperation with long-term effort to improve New Zealand Cooperation Fund ADB—go to , education is beginning to bear for Technical Assistance with Solomon Islands, and Vanuatu. fruit. Cooperation with ADB more efficient regional and/or This is where the majority of in this sector has been moving thematic cofinancing umbrella Pacific people live and where forward in recent years under arrangements that are better development needs are greatest. the Education Sector Project II suited to today’s operational However, its aid program also (ESP II). In addition to its main modalities and requirements. ■ the wide range of educational goals, the project has challenges facing countries across helped tackle the difficult work of the region. donor coordination. ADB is playing a unique role Begun in 2005 and building in bridging divergent interests on Education Sector Project I, the in this complex region, working $30 million ESP II is designed to with New Zealand and other some of the most pressing development partners to improve issues Samoa’s education sector 4 Partnership Brief 5

ESP II supports the models through more assertive establishment of a more equitable use of the new curriculum and and effective education system to work out difficulties before through a better school scaling up the program. curriculum, learning materials, and teaching practices, ensuring Bridging Gaps in the teachers are well-trained, as well Solomon Islands as providing better educational Roads in the Solomon Islands facilities, furniture, and equipment. were in a poor state at the Under the project, in 2011, beginning of the last decade, the new Samoa Ministry of damaged by several years of Education, Sports and Culture conflict and long-term neglect, Headquarters Building was limiting the prospects for opened. The state-of-the-art economic development. facility houses ministry staff The nation’s economy who had previously worked in is also disadvantaged by a disparate locations, making it population spread over about easier to coordinate, establish, 60 inhabited islands, with about and standardize education 80% living in rural areas and policy. Its information and isolated villages. Weak and communication technology poorly maintained infrastructure distance-learning studio, by 2013, constrains economic growth and will be connected to all secondary its benefits. schools, helping to bridge the With significant cofinancing gap in education provision for and coordination with children from disadvantaged rural New Zealand, ADB and its or remote areas by providing partners have begun to turn the teaching and educational situation around. Cooperation faces. It includes funding of materials they otherwise would began under the Post-Conflict more than $8 million each from not have. Emergency Rehabilitation Project New Zealand, , and ADB. The project has also created a providing emergency assistance Samoa has made progress new curriculum, with important to help the country repair the in education in recent years, help from a New Zealand-based damage of the 1999–2003 civil including under the 2005 project. consultant, to replace the 1970s- conflict. It continued with a Yet significant problems remain: era curriculum. It is too early to second effort, the Solomon Islands the primary curriculum is more assess the impact on , Road Improvement Project (SIRIP) than 15 years old; many teachers but teacher training in more launched in 2006 (See case study, are unfamiliar with effective than 50 secondary schools and page 9). teaching practices; there is a 200 primary schools has begun The success of the two lack of comprehensive teachers’ and early evidence suggests that projects helped pave the way for manuals, textbooks, and learning the new material is being applied. the Transport Sector Development materials; and standards have Between 2004 and 2009, the Project. This new effort will apply been slipping. project has, for example, enabled coordinated support from ADB, The number of year 4 more than 10,600 students to New Zealand (whose transport students, at risk of falling short benefit from school improvements sector work is aligned with of standards in English, increased and provided in-service training this project), and Australia, from 29% in 1997 to 51% in for more than 2,700 teachers. for the government’s National 2003, while year 6 students at risk ESP II is also completely Transport Plan (NTP). The NTP in numeracy rose from 63% to renovating 11 schools (of which was established, with support 71% in the same period. six are done) that will serve as from ADB and , to help the 6 Partnership Brief Highlights

Lao People’s Democratic Republic

Philippines

Cambodia Viet Nam

Indonesia

Papua New Guinea Timor-Leste

New Zealand developing partner countries

Official development assistance (ODA) (% of gross national income): 2009—0.28% and 2008—0.30%.

New Zealand’s top 10 ODA recipients in Asia and the Pacific are (1) Solomon Islands, (2) Papua New Guinea, (3) , (4) Vanuatu, (5) , (6) , (7) , (8) Samoa, (9) , (10) Viet Nam.

New Zealand ODA by theme (OECD–DAC): Economic Humanitarian Infrastructure Multisector Aid

Education, Health, and Population Other Social Infrastructure Others

Production Program Assistance

0 10 20 30 40 50 60 70 80 90 100 % Sources: OECD/DAC and New Zealand’s Ministry of Foreign Affairs and Trade. 7 Technical Assistance Projects with Cofinancing Cumulative Official Grants

Papua New Guinea Samoa 19.4% Cook Islands 30.0% Solomon Regional 5.1% Islands 49.7% Viet Nam 57.8% 18.7% Papua New Guinea 12.2%

Philippines Republic of the 3.9% Vanuatu 1.5% 1.7%

Kiribati

Tuvalu Solomon Islands Tokelau

Samoa Niue Vanuatu Cook Islands

Fiji Tonga

New Zealand 8 Partnership Brief

country better meet the needs of and rehabilitated rural jetties would another ADB development infrastructure development. improve access to disconnected partner, cooperating with the The government and its communities and the shipment of $150 million, ADB-financed development partners have commodity exports. Electrification Investment agreed that future support to A shipping support scheme Program. New Zealand has the sector will be in accordance would provide subsidies for a fixed offered $2.5 million to the with the NTP (as was SIRIP) to number of voyages at designated $6 million energy access project. develop robust national transport frequencies on otherwise The town electrification infrastructure. commercially unviable routes. program will contribute to the The project got under way Support would also be given to 10-year power development in August 2011. Its expected enable legal and institutional plans of the state utility, outputs include more effective reforms in to improve the PNG Power Ltd. In two stages, project implementation, greater safety and regulation of domestic the electrification program institutional effectiveness (by shipping. ADB would provide partial will fund renewable energy establishing a central project administration of the Government facilities, including run-of- implementation unit in the of New Zealand grant. hydropower plants and country’s Ministry of Infrastructure systems in about six Development), and rehabilitation Securing Financing provincial centers. and maintenance of infrastructure for Infrastructure Only about 10% of in accordance with the NTP. Cooperation in the Pacific region Papua New Guinea’s 6.5 million is also furthered by the PRIF, a people have access to Connecting Vanuatu’s recently created umbrella-like grid-connected power, largely Remote Islands arrangement providing a more in the urban areas. When power Similarly, in Vanuatu, ADB, flexible cooperation model and supply is available in provincial New Zealand, and other financing platform for securing centers, it can be unreliable, development partners are funding for infrastructure works. with regular power outages coordinating to address difficult When launched in forcing businesses and industry transportation challenges. 2008—bundling support from to use costly and polluting New Zealand has offered up New Zealand, ADB, Australian diesel generators. to NZ$17 million to cofinance Agency for International the Vanuatu Interisland Shipping Development, and the Aviation Safety Support Project and associated Bank—the PRIF countries New Zealand also provided technical assistance. committed to providing parallel financial support and With a population of 240,000 $200 million over 4 years to ensure practical assistance to the Pacific spread over an archipelago of secure funding for infrastructure Aviation Safety Office (PASO) almost 60 islands, Vanuatu is in the region. The from 2006 to 2010, through the dependent on maritime transport. joined the Facility later. SIRIP Pacific Security Fund and the But its inadequate facilities limit is among the projects the PRIF Civil Aviation Authority of New cargo and passenger movement supports, in addition to numerous Zealand. In particular, it funded and leave many remote, rural other infrastructure developments the salary of PASO’s aviation areas cut off from the urban throughout the Pacific region. security inspector for 2 years. center. The country’s challenging Established in 2005 in geography and poorly functioning Expanding Energy Access Vanuatu’s , with ADB markets make the commercial in Papua New Guinea support, PASO provides aviation provision of some services In Papua New Guinea, meanwhile, safety and security oversight, unviable. New Zealand has offered to partner inspections, and technical The proposed project would with ADB on the proposed assistance to , airports, build an interisland shipping Improved Energy Access for Rural and civil aviation authorities in terminal in the capital, Port Vila, Communities Project, a unique the Pacific. ■ to serve as a network hub. New cofinancing arrangement involving

9 case study Improving Transport in the Solomon Islands etting around the Solomon SIRIP continued the momentum region. Indeed, the two projects Islands—never an easy task in 2006. With nearly $17 million have helped clear the way for a Gon roads damaged by years in grants, including almost new, broader effort to improve of neglect and civil conflict— $10 million from New Zealand, it transport in the island group is getting easier under a series of financed the rehabilitation of about under the government’s National projects jointly funded by the Asian 100 kilometers of provincial and Transport Plan. Partners to the Development Bank (ADB), the secondary roads. Coordinating new Transport Sector Development New Zealand Aid Programme, and the funding and work of ADB, Project, discussed earlier, furthered other development partners. New Zealand, Australia, and the agreement on their respective Urgent repairs began in the government, SIRIP has replaced roles in the project at coordination early under the Post-Conflict or upgraded about 30 water meetings in August. Together, they Emergency Rehabilitation Project crossings; reconstructed about will help the Solomon Islands take (PCERP) in the wake of a civil 20 kilometers of road; and its transport network to a new level. conflict that had severely damaged arranged selective road relocations major roads and bridges. This helped for climate change adaptation, a For more information on road pave the way in 2006 to further key feature of SIRIP, across three development in the Solomon repairs under the Solomon Islands . Islands, please see On the Road Improvement Project (SIRIP). Importantly, PCERP and Same Track, www.adb.org/ Prior to these projects, about SIRIP also helped ensure smooth Documents/Periodicals/Impact- 65% of roads had deteriorated in coordination of aid activities by the Stories/fragile-Impact-Stories. a road network that failed to reach major development players in the pdf about 77% of the rural population, with about 80% of roads impassable by light vehicles. “These were the worst conditions I’d seen in nearly 30 years of working on road projects,” said Rishi Adhar, senior project officer at ADB. PCERP, widely considered a success, began to turn things around. It provided a working network of improved roads and bridges (particularly in rural areas), better connecting markets and providing easier access to services. Traffic flows doubled between 2006 and 2008 and have since returned to normal, while access to schools, health clinics, and other basic services improved. The completion of the Tanavasa Bridge—near the capital and blown up in the conflict—was a particularly symbolic moment. 10 11

Direct Value-Added (DVA) Cofinancinga (official grants for project components, $ million)b

Yearc Project ADB New Zealand Solomon Islands 2010 Second Road Improvement (Sector) 0.00 0.36 2006 Road Improvement (Sector) 0.35 9.75 2006 Post-Conflict Emergency Rehabilitation 11.56 6.50 Papua New Guinea 2006 HIV/AIDS Prevention and Control in Rural Development Enclaves 15.00 3.50 Samoa 2005 Education Sector Project II 8.06 8.60 Non-DVA Cofinancing ($ million) Viet Nam 1999 Teacher Training 22.44 0.49 (grant) Samoa 1980 Forestry Development 1.74 1.28 (loan) 1977 Oil Mill 2.25 0.39 (loan) Solomon Islands 1977 Fisheries Development 3.60 0.20 (loan) 1976 Cattle Development 3.54 0.11 (loan) a DVA cofinancing is cofinancing with contractual or collaborative arrangements. Under contractual cofinancing, ADB assumes financial, fiduciary, and/or administrative responsibilities. Collaborative cofinancing imposes no contractual obligations on either ADB or the financing partner, but requires close coordination during processing and implementation of the project, with proper documentation. b All figures are given in US equivalents unless otherwise indicated. c Since New Zealand began cofinancing with ADB.

Trust Funds

Year Facility Cumulative Contribution Committed 1999 New Zealand Cooperation Fund for Technical Assistance $400,000

Contractors/Suppliers from New Zealand Involved in ADB Loan Projects (2006–2010)

Contractor/Supplier Type of Contract Contract Amount ($ million) Fletcher Construction Company Education 9.05 McConnell Dowell Constructors Transport and ICT 5.24 Works Infrastructure Transport and ICT 3.44 PINZ Education 2.84 Robt Stone Water Supply and Other Municipal 2.52 Infrastructure and Services Arthur D. Riley Company Ltd. Energy 1.85 Education 1.41 North Power Ltd. Energy 0.81 Training and Technology Transfer Multisector 0.60 Tenix Alliance NZ Services Ltd. Energy 0.57 Max Foon Transport and ICT 0.39

ICT = information and communication technology. 10 11

New Zealand’s Funding for ADB Technical Assistance Projects ($ thousand) Year/ Project TA No. Amounta Country

2010 PNG Strengthening Rural Primary Health Services Delivery 7400 90.00

2009 REG Aviation Legislative and Regulatory Review 6259 132.00 REG Response in the Pacific to High Prices 6477 10.00

2008 REG GMS Phnom Penh Plan for Development Management III (Second Supplementary) 6407 400.00

2007 COO Infrastructure Development Project 7022 200.00

2006 PNG Demographic and Health Surveys 4798 662.00 REG GMS Phnom Penh Plan for Development Management II (Supplementary) 6237 500.00

2005 REG GMS Phnom Penh Plan for Development Management II 6237 350.00

2004 REG GMS Phnom Penh Plan for Development Management (Supplementary) 6056 350.00

2003 VIE Policy Coordination Support to the Office of the Government 4082 400.00

2002 REG Formulation of the Pacific Region Environmental Strategy 6039 100.00 VIE Implementation of the Public Administration Reform Program 3886 175.00

2001 REG A Survey of NGO Capacity Building Needs in Pacific DMCs (Supplementary) 5884 13.30 PHI Improving Poverty Monitoring Surveys 3656 150.00 VIE Institutional Support to the Office of the Government 3652 150.00

2000 VAN Skills Development 3437 67.00

1999 REG Financial Sector Study in Selected Developing Member Countries 5853 75.00

1998 RMI Coconut Sector Development Study 2994 60.00

TOTAL 3,884.30

COO = Cook Islands, DMC = developing member country, GMS = Greater Mekong , NGO = nongovernment organization, PHI = Philippines, PNG = Papua New Guinea, REG = regional, RMI = Republic of the Marshall Islands, TA = technical assistance, VAN = Vanuatu, VIE = Viet Nam. a All figures are given in US dollar equivalents. Partnership Brief Cofinancing with New Zealand

The Partnership Brief series, compiled by the Office of Cofinancing Operations of the Asian Development Bank (ADB), presents key details of cofinancing with ADB’s main development partners.

About the Asian Development Bank

ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

About the New Zealand Aid Programme

The New Zealand Aid Programme is the ’s international aid and development programme, managed by the Ministry of Foreign Affairs and Trade. The New Zealand Aid Programme supports sustainable development in developing countries in order to reduce poverty and contribute to a more secure, equitable, and prosperous world. The programme has a thematic focus on sustainable economic development and a geographic focus on the Pacific.

For further information, please contact:

Asian Development Bank—Office of Cofinancing Operations 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org

New Zealand Aid Programme Ministry of Foreign Affairs and Trade 195 Lambton Quay , New Zealand www.aid.govt.nz

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