📋 Tender Overview
Project Status: Approved
Source of Funding / Amount: Loan 4132-tim: power distribution modernization project
Ordinary capital resources: US$ 35.00 million
The project will (i) support the modernization of the power distribution system to contribute to the sustainability, resiliency, and reliability of the electricity system; and (ii) provide institutional strengthening and capacity building to the implementing agency, electricidade de timor-leste (edtl). It is aligned with the following sustainable development goals (sdgs): sdg 7 on access to affordable, reliable, sustainable, and modern energy for all, and sdg 13 on urgent action to combat climate change and its impacts. The project will support edtl improve the power supply infrastructure in timor-leste.
The principal weaknesses in the power sector are the high cost of generation, inefficient distribution, low level of revenue generation, ongoing need for substantial fiscal subsidies, and excessive technical and non-technical network losses. These problems are, to some extent, the result of other weaknesses in the institutional, legal and regulatory environment, namely the absence of proper commercial practices within edtl and poor implementation of the legal and regulatory frameworks for the sector. Substantial challenges remain beyond the high cost of diesel generation. Roughly 60% of generated electricity is not billed to customers. Network losses are high, and the installation of meters has not kept pace with new connections. Substantial investment needs also remain, especially at the distribution level (20 kv and lower voltages) to extend service to populations that still lack access to modern energy services. The governments strategic development plan 2011-2030 (sdp) target for 100% electrification by 2015 has not been met, which implies the need for additional investment in new distribution assets. Existing legacy networks also need investment in modernization and replacement of ageing assets. This is a particularly acute need in dili and baucau, where networks are several decades old and service interruptions are frequent. To sustain progress in the sector and promote expanded economic opportunity throughout timor-leste, edtl must begin to operate on a more commercial basis: the government currently subsidizes roughly 85% of operating costs in the sector (over $100 million per year). The amount of subsidy required will grow unless technical and non-technical losses decline and generation costs can be reduced. The government also recognizes that the solution may lie in changes to the institutional, legal and regulatory arrangements in the sector. Edtl remains a department within the ministry of public works, transport, and communications (mpwtc) and has never operated on a commercial basis. It lacks the human capacity and business systems and processes to operate efficiently and cope with the myriad operational and developmental challenges it faces. Addressing the sectors ident
