Midterm Review of Assistance in Developing the Electricity Sector in Timor Leste

The Project
Norway has since 2002 supported the electricity sector in Timor-Leste within institutional cooperation, expanding power production capacity, management support, electricity metering and billing, rehabilitation of electricity grid, development of a small scale hydropower scheme and planning of a medium scale hydropower project. The support has been governed by several bilateral agreements between Timor-Leste and Norway. The current midterm review covers agreements totalling NOK 101, 7 million, exclusively for projects financed in the planning period 2002-2008. The cooperation has an institutional component and a technical/commercial component. The goals of the former are to assist in developing the management of hydro power sector in Timor-Leste through an institutional cooperation arrangement with the Norwegian Water Resources and Energy Directorate (NVE), and the goal of the latter is to establish a viable economic base for electricity supply in the country through support to Electricidade de Timor-Leste (EdTL) and introduction of an effective revenue collection system.

Interesting Findings
• The present financial situation for Timor-Leste, thanks to the petroleum sector, is such that they do not need to borrow any money from the development banking system. They are willing and able to invest in development of the country's infrastructure themselves, but lack of human resources are preventing Timor-Leste in implementing all projects planned in the state budget.
• One of the main lessons learned from 4 years of implementing the Institutional cooperation program, is that Timor-Leste not yet has sufficient human resources to include in a capacity building program. There are simply not enough people around to train. In this situation, comprehensive training programs do not make much sense and training activities should therefore be planned as part of other program components based on training needs assessment of identified staff.
• In general the roles of the key stakeholders in the contract are not clear, neither for the Project Manager (PM) of MNRMEP, nor for NVE and the Long Term Adviser based (LTA) in Dili. Due to the lack of human resources, the situation have e.g. led to the LTA from the NVE becoming responsible PM for both the Ira Lalaru and the Gariuai hydropower sub-projects, as well as for the hydro meteorological monitoring sub-project.
• NVE's involvement in developing the legal framework for the sector has not produced the expected results. Important lessons from this engagement, as well as from other similar projects, are that legal frameworks development are long term processes, which need to reflect political consensus on policies and strategies and a common understanding of purpose and planned outputs, and that too strong donor driven processes will result in failures.
• Involvement of local leadership and communities in the two hydropower projects is a success story and an example to be followed. This also supported realistic environmental assessments, reflecting relevant Timor-Leste legislation, with the involvement of relevant local authorities.
• All three project related to upgrading of the electricity supply system in Dili was based on a perception of there being an emergency situation. However, the urgency has caused that normal procedures have not been followed and the result is that an escalating number of customers arrange bypass of their metres (allegedly with the help of staff from Electricitade de Timor Leste, (MNRMEP)).
• All the contracts totalling NOK 79, 5 million over a period of 3 - 4 years were awarded to one company with the Ministry/EdTL applying the emergency procedures of the procurement regulations in force at the time. For the prepayment meter project, Norad has later concluded that this should not have been regarded as an emergency issue.