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This report is published under the auspices of the Government of Tuvalu, with the support of the Pacific Region Infrastructure Facility (PRIF).

The Tuvalu Infrastructure Strategic Investment Plan was endorsed and adopted by the Tuvalu Cabinet on December 7th 2016 as a guide to infrastructure investment over the next 10 years and it is linked to the Tuvalu Asset Management Framework.

The report was prepared by Shawn Otal, David Hamilton and Gary Spiller working under the guidance of Lorena Estigarribia, Technical Manager of the PRIF Coordination Office, and with administrative support of the Asian Development Bank.

PRIF is a  multi-development partner coordination, technical assistance and research facility that supports infrastructure development in the Pacific. PRIF member agencies include Asian Development Bank (ADB), 

Australian Department of Foreign Affairs and Trade (DFAT), European Investment Bank (EIB), European Union (EU), Japan International Cooperation Agency (JICA), New Zealand Ministry of Foreign Affairs and Trade (NZMFAT), and the World Bank Group. 

The views expressed in this report are those of the authors and do not necessarily reflect the views and policies of ADB, its Board of Governors, the governments they represent, or any of the other PRIF member agencies. None of the above parties guarantees the accuracy of the data included in this publication or accepts responsibility for any consequence of their use. The use of information contained in this report is encouraged with appropriate acknowledgement. The report may only be reproduced with the permission of both the Tuvalu Government and the PRIF Coordination Office on behalf of the PRIF Members.

Acknowledgements

The authors would like to express their appreciation for the support provided by everyone consulted during the course of preparing the TISIP 2016-2025. In particular, the important role of the Steering Committee established by the Government of Tuvalu to guide the work is acknowledged, including the contribution of Avafoa Irata (Permanent Secretary, Ministry of Public Utilities and Infrastructure), Letasi Iulai (Permanent Secretary, Ministry of Finance and Economic Development), and Taukave Poolo (Permanent Secretary, 

Ministry of Communications and Transport). Special mention is made of the assistance provided by Nuiatui Niuatui (Director, Department of Planning, Budget and Aid Coordination, MFED) and his staff, who provided technical guidance and logistical support to the authors. The team is also grateful for the logistical support provided by the ADB country team and the technical guidance provided by the PRIF Coordination Office.

For more information, please contact:

Edited by Margie Peters-Fawcett; desktop published by Smudge Design; photographs by Lorena Estigarribia Published: April 2017

TUVALU

Infrastructure Strategy and Investment Plan

Contents

Map of Tuvalu                                                                                                                                 v

Abbreviations                                                                                                                                vi

Executive Summary                                                                                                                     vii

1                 Introduction 1

1.1             Tuvalu Infrastructure Strategy and Investment Plan ..................................................................1

1.2            Te Kakeega III .......................................................................................................................................................2

1.3            Recovery Vulnerability Reduction Plan ...............................................................................................2

1.4            Government of Tuvalu Planning and Budgeting Framework ................................................2

1.5            Preparation of Asset Management Framework .............................................................................3

2                 Infrastructure Sector Update        4

2.1            Drivers ........................................................................................................................................................................4

2.2            Maritime Transport ............................................................................................................................................4

2.3            Air Transportation  .............................................................................................................................................4

2.4            Land Transportation .........................................................................................................................................5

2.5            Water and Sanitation ........................................................................................................................................5

2.6            Waste Management .........................................................................................................................................5

2.7            Energy ........................................................................................................................................................................6

2.8            Telecommunications .......................................................................................................................................6

2.9            Coastal Protection ..............................................................................................................................................7

2.10         Multi-Sector ...........................................................................................................................................................7

2.11         Education .................................................................................................................................................................7

2.12         Health .........................................................................................................................................................................8

2.13         Other Government Buildings ......................................................................................................................8

3                 Prioritisation Process          9

3.1            Establishing Project Lists ..............................................................................................................................9

3.1.1         Ongoing and committed projects  .....................................................................................................9

3.1.2        Long List of proposed projects ............................................................................................................11

3.2            Whole of Life Costing ....................................................................................................................................14

3.3            Prioritisation Methodology  ........................................................................................................................15

3.3.1        Screening process .........................................................................................................................................15

3.3.2        Multi-Criteria analysis approach .........................................................................................................15

3.3.3       Prioritisation criteria .......................................................................................................................................15

3.3.4       Scoring methodology .................................................................................................................................17

3.3.5       Weighting methodology .........................................................................................................................20

3.4            Outcome of the Process .............................................................................................................................20

4                 Prioritised Infrastructure Investment Plan          26

4.1            Prioritisation and Sequencing of Investments .............................................................................26

4.2            Complementary Measures .......................................................................................................................30

4.3            Maintenance Implications of the Investment Plan ....................................................................30

5                 Funding Considerations     34

5.1            Government ........................................................................................................................................................34

5.2            Public Utilities ....................................................................................................................................................35

5.3            Development Partners .................................................................................................................................35

5.4            Finance for Climate Change Adaptation  .........................................................................................36

5.4.1        Tuvalu’s climate change policy ..........................................................................................................36

5.4.2       Climate          change           financing:        developments ................................................................................36

5.4.3       Tuvalu Climate Change and Disaster Survival Fund Act 2015 .................................37

5.4.4       Bilateral donors ................................................................................................................................................37

5.4.5       Multilateral and regional donors .......................................................................................................37

5.4.6       Multilateral climate change funds ...................................................................................................37

5.4.7       Implications for current and proposed projects ..................................................................38

5.4.8       Current progress ............................................................................................................................................38

5.5            Finance for Maintenance ............................................................................................................................40

5.6            Summary ...............................................................................................................................................................40

6                Implementation of the Tuvalu Infrastructure Strategy  

             and Investment Plan                                                                                                  42

6.1            Lessons Learned .............................................................................................................................................42

6.2            Future Role of the TISIP...............................................................................................................................42

6.3            Other Stakeholders ........................................................................................................................................44

6.3.1        Private sector .....................................................................................................................................................44

6.3.2       Nongovernmental organisations ......................................................................................................44

7                 Building Resilience into the Design and Planning of  

             Infrastructure Investments                                                                                       45

7.1            Climate Change and the Vulnerability of Infrastructure Assets .......................................45

7.2            Climate          Proofing          and      Measures       to         Increase          Resilience........................................................45

7.2.1        Coastal protection projects and beach development ....................................................47

7.2.2        Seawalls .................................................................................................................................................................47

7.2.3        Jetties and mini-harbours .......................................................................................................................47

7.2.4       Buildings ................................................................................................................................................................47

7.2.5       Airstrip and roads ...........................................................................................................................................47

7.2.6       Telecommunications  ................................................................................................................................48

7.2.7        Waste management ...................................................................................................................................48

7.2.8       Outer Island assets .......................................................................................................................................48

7.2.9       Issues and possible actions ..................................................................................................................48

7.3            Cost Estimates for Climate Proofing TISIP 2016-2025 Projects.......................................49

Tables

Table 9.  Other Projects Included in the Prioritisation Exercise ............................................................25

Table 10.  Potential Sequencing of Investments  ...............................................................................................27 

Table 11. Potential Funding Modalities for Proposed Priority Projects ............................................29

Table 12.  Maintenance implications of Tuvalu Infrastructure Strategy and  

Investment Plan 2016−2025, Based on Plan End-Date.........................................................31

Table 13. Summary of Government Finance .......................................................................................................34

Table 14. Climate Change Financing for Resilience, Adaptation,  and Climate Proofing Measures for Current and Future Projects.................................39 

Table 15. Main Climate Change Threats, Impacts Causing Loss  

and Damage to Assets, and Resilience Measures to Protect Them ...........................45 

Table 16. Core Public Infrastructure Assets and Resilience Measures 

for Climate Proofing ........................................................................................................................................46

Table 17. Incremental Costs of Climate Proofing ............................................................................................50

Figures

Figure 1. Project Prioritisation Results ........................................................................................................................22

Figure 2. Project Prioritisation Results by Criteria Group..............................................................................22 

Figure 3. Location of Priority New Investments ..................................................................................................24

Figure 4. Sectoral Composition of Priority New Investments ...................................................................24

Figure 5. Proportion of New Infrastructure in Investment Plan ...............................................................33

Map of Tuvalu

Source: Tuvalu Infrastructure Strategy and Investment Plan, 2011.

Abbreviations

Currencies

Money values are expressed in Australian dollars (A$), Euros (€), New Zealand dollars (NZ$), or U.S. (US$) dollars, as indicated.

Executive Summary

The Tuvalu Infrastructure Strategy and Investment Plan (TISIP) 2016−2025 was endorsed by the Tuvalu Cabinet on 7 December 2016 as an update of the TISIP that was prepared in 2011. This update extends to include social and economic infrastructure, covering the sectors listed below while focusing on investments of major national significance at a minimum capital cost of A$400,000. An update of recent developments in each of these sectors in relation to infrastructure investment is provided in Section 2: Maritime Transportation, Air Transportation, Land Transportation, Water and Sanitation, Waste 

Management, Energy, Telecommunications, Coastal Protection, Education, Health, Multi-Sectoral (e.g. urban or Outer Island projects involving multiple sectors), and Other Government Buildings.

TISIP 2016−2025 falls under Te Kakeega III, Tuvalu’s National Strategy for Sustainable Development 2016−2020 (TKIII). It includes the infrastructure requirements that were identified in the Tropical Cyclone Pam Recovery and Vulnerability Reduction Plan, prepared by the Government of Tuvalu in 2015. 

TISIP 2016−2025 includes projects that are ongoing or for which funding has been committed, together with 12 projects as of March 2016, that have been identified from a “long list” based on a prioritisation methodology. Section 3 contains the details of ongoing, committed and proposed projects.

The “long list” originates from a range of sources, including the Te Kakeega III National

Strategy for Sustainable Development 2016−20 (TKIII); Public Sector Investment Program 

(PSIP) within the annual Budget; Tuvalu Infrastructure Strategy and Investment Plan (TISIP) 2011; Recovery and Vulnerability Reduction Plan; sector plans; and agency corporate plans, as well as from interviews with stakeholders in infrastructure sectors. It is noted that the PSIP includes a list of unfunded projects; this list, however, is not comprehensive and represents a “fully fledged” pipeline of investment projects (i.e., next-generation projects to follow those which are in progress or for which funding is committed). TISIP 2016−2025 contributes by strengthening the PSIP into a comprehensive pipeline of projects that will require in-depth preparation, appraisal, prioritisation, and sequencing.

The “long list” includes proposals designed to ensure that recent key infrastructure assets that were put in place in recent times are kept in good condition and fully operational thus reflecting the outputs of asset management framework. It also ensures that sufficient funding is available to complete those projects whose costs are not fully covered currently (in cases where funding commitments do not cover the full project cost), prior to initiating new investment projects. 

In terms of methodology, each project on the list has been screened as follows:

n strategic alignment to ensure that the project is consistent with TKIII; n time frame to ensure that the demand for the project falls within a 10-year period; and n state of readiness to ensure that the scope of the project is sufficiently developed prior 

to implementation.

The projects that fell within the above criteria were then ranked according to the MultiCriteria Analysis (MCA), a similar approach to that used in the original TISIP. MCA is a rapid appraisal technique that weighs the criteria based on a scoring system to establish the priority of a project. Section 3.3 further describes the MCA criteria, as well as the weighting and scoring system.

It should be noted that MCA does not establish the viability of projects (i.e., the precise relationship between benefits and costs); rather, it establishes the ranking of projects in relation to their performance against selected criteria. As such, it identifies those projects that justify further development along the project pipeline but does not warrant final approval of the project. Prior to implementation, projects must be fully documented and subject to more scrutiny from various assessments, such as the level of cost benefit analysis and environmental impact. This assessment, in some cases, identifies those projects that require modification or redesign.

TISIP 2016−2025 represents a total investment of approximately A$213 million over a 10year period (i.e., A$21.3 million per annum, on average). This includes ongoing projects in 2016, those for which funding has been committed, and those that have been proposed and are considered a high priority. 

Provision is made for climate proofing the new assets, and allowances for the whole of life cost analysis of projects are included for design, contingencies, and incremental maintenance requirements (Section 3.2). Furthermore, almost 25% of the infrastructure investments that are being considered for the 2016−25 period will consist of coastal protection works for which previously untapped resources of climate change adaptation funding are being sought. Section 4 provides details of the composition and phasing of the infrastructure investment plan, including potential sequencing of investments (Section 4.1).

Of the total TISIP 2016−2025 (i.e., ongoing, committed, and proposed projects), 60% by number and 67% by value represent new investment, while the balance represents the upgrade or periodic maintenance of existing infrastructure. The total increase in annual maintenance requirements from TISIP implementation (i.e., by end-2025) is estimated at A$3.4 million.

The projects with the highest priority are shown in Table 1. Profiles of these projects, including climate proofing options where appropriate, are included in Appendix 2. The 12 projects are spread across nine sectors. Three projects are located in Funafuti—two of which are of significance to the nation as a whole—while nine involve one or more outer islands.

Activities, which include various studies and assessments, have been identified as complementary to the infrastructure investment plan set out in TISIP 2016−2025. These are included in Section 4.2. Some may be eligible for inclusion in future TISIP updates once the feasibility studies are completed.

Table 1. Priority Projects Based on the Multi-Criteria Analysis (in millions of Australian dollars)

*Including incremental costs for climate proofing.

Section 5 and Section 6 cover the financing and implementation of projects, while Section 7 addresses the building of resilience into the design and planning of infrastructure investments. The latter also provides incremental costs of climate proofing the priority projects of the plan.

TISIP 2016−2025 should be viewed as a key contributor to the strengthening of the infrastructure investment proposal pipeline of the Government of Tuvalu as a result of rigorous project preparation, appraisal, prioritisation, and sequencing of investments. This pipeline, including the maintenance requirements, will be the basis on which sector ministries will frame their submissions for the annual Budget,^[1] and on which central agencies, such as the Ministry of Finance and Economic Planning, will conduct their appraisals. It provides a mechanism to improve the linkages between investment planning and annual budgeting processes.

An achievement of the TISIP 2016−2025 is the link that has been established between the investment plan and the development of the Asset Management Framework. The latter will provide a significantly more systematic approach to identify the maintenance requirements and investment needs associated with the replacement, upgrade, and added capacity of infrastructure asset stock.

Consideration, in due course, should be given to shifting the focus of TISIP from that of a formal infrastructure investment plan to that of an infrastructure management and investment process. The advantages would include process continuity, linkage facilitation vis-á-vis the Asset Management Framework and PSIP, and improved sustainability as a component of Tuvalu’s planning and budget framework.

1        Introduction

1.1       Tuvalu Infrastructure Strategy and Investment Plan

The Tuvalu Infrastructure Strategy and Investment Plan (TISIP) was prepared in 2011 and adopted by the Government of Tuvalu in February 2012. The infrastructure investment priorities set out in TISIP were guided by the Te Kakeega II National Strategy for Sustainable Development 2005−2015.

The objective of TISIP was to provide a country-led and prioritised investment plan for Tuvalu’s economic infrastructure for the next 5-10 years. It identified the investment needs and priorities for economic infrastructure and assessed the financial resources essential to support implementation. The plan aims to improve collaboration between national stakeholders and international development partners in the planning and financing of infrastructure development and maintenance, as well as to strengthen the capacity of government to plan and manage the development of its economic infrastructure. Since planning and budgeting priorities change over time under various circumstances, it was proposed that TISIP be updated every two years.

The Tuvalu Infrastructure Strategy and Investment Plan (TISIP) 2016-2025 is an update of the TISIP prepared in 2011. It was prepared in 2016 by the Ministry of Public Utilities and Infrastructures and the Ministry of Finance and Economic Development—in close collaboration with line ministries, state-owned enterprises, and development partners— and it was supported by the Pacific Region Infrastructure Facility. The TISIP 2016−2025 was endorsed by the Tuvalu Cabinet on 7 December 2016.

TISIP 2016−2025 covers the following infrastructure sectors shown below. The list is an expansion of that in the original TISIP of 2011, which was restricted to Economic Infrastructure. The additions include Coastal Protection, Education, Health, and Other Government Buildings and are a consequence of the strong focus posed on climate change and the environment in TKIII, as well as the intention of government to ensure social inclusion.

The updated TISIP has a 10-year time frame up to and including 2025. A more detailed coverage of the first five years, up to and including 2020, is consistent with the TKIII time frame. 

TISIP 2011 focused on major infrastructure projects of national significance and set a minimum capital cost of A$400,000. This investment threshold has been retained in TISIP 2016-2025.

1.2       Te Kakeega III

Development activity in Tuvalu, including investment in infrastructure, is guided by Tuvalu’s Te Kakeega III (TKIII) National Strategy for Sustainable Development which covers the 2016−20 period. The strategy supports the theme adopted for the 2015 National Summit for Sustainable Development, namely “Protect and Save Tuvalu. Improve the quality of life and prosperity for all”. The strategic areas identified in TKIII are as follows:

Strategic Area 9, Infrastructure and Support Services, includes seven priority areas: water and sanitation, telecommunications, power and renewable energy, waste management, civil aviation, maritime transport, and roads. TKIII builds on TKII, adding emphasis on climate change, environment, migration and urbanisation, and oceans and seas.

1.3       Recovery Vulnerability Reduction Plan

Following the extensive damage caused by the 2015 storm surges of Tropical Cyclone 

Pam, the Government of Tuvalu prepared the Recovery and Vulnerability Reduction Plan (GOT, 2015) which identified the immediate, medium-term, and long-term actions necessary to respond to the event. The total budget amounts to A$90.7 million and includes A$6.3 million relating to immediate responses, A$13.2 million to medium-term actions, and A$71.2 million in long-term rehabilitation. Significant investments in repairs to infrastructure and coastal protection are taken into consideration, thus overlapping with TISIP 2016−2025. 

1.4       Government of Tuvalu Planning and Budgeting Framework

Line ministries (and the public enterprises they supervise) are responsible for identifying and developing project proposals for new or replacement infrastructure, as well as its relevant maintenance requirements. Proposals are submitted to the Ministry of Finance and Economic Development during the yearly budget exercise. The Public Sector Investment Program (PSIP) is then included in the Budget for consideration and approval by Cabinet and Parliament. It includes a list of projects to be funded by government (under the category of Special Development Expenditure) and development partners, as well as those projects that have been approved but which await funding. While the development of the PSIP involves a rudimentary assessment of proposal merits, it does not amount to a formal project appraisal.

The submission of project proposals that require external assistance is not intrinsic to the budget process. There is no requirement that they be incorporated into the PSIP prior to submission to development partners for assistance; rather, some projects may be ultimately added to the PSIP once committed to by development partners. Certain larger projects, particularly those financed by multilateral development institutions such as the World Bank and Asian Development Bank—which provide Tuvalu with finance on a grant basis—may not be reflected in the PSIP. 

Table 2 summarises the processing of project proposals that require external assistance from development partners. These vary depending on the cost of the project.

Table 2. Process for Project Proposals Seeking External Assistance from 

Development Partners

Source: Compiled from the draft Operating Procedures Manual, 2014 of the Aid Coordination Unit of the Ministry of Finance and Economic Development.

Project proposals for external assistance are initiated by line ministries. Appraisal by the Aid Coordination Unit of the Ministry of Finance and Economic Development is only required for smaller projects, while larger projects are submitted to the Development Coordination Committee or Cabinet. This provides very little opportunity for this Ministry to play a role in the formal appraisal of these larger projects. It is noted that the Financial Instructions require all projects that seek external assistance to be processed and evaluated by the Planning, Budget, and Aid Coordination department of the Ministry of Finance and Economic Development,^[2] although this does not appear to be followed in practice.

1.5       Preparation of Asset Management Framework

Preparation of an asset management framework and plan is underway as an activity associated with the update of the infrastructure investment plan (PRIF, undated). Once complete, this will provide more information than is currently available on the historical cost, replacement value, and annual maintenance requirements of the current stock of infrastructure assets in Tuvalu. An Asset Health Index will include a combination of indices that relate to the physical condition, service levels, and vulnerability of each major asset. An Asset Capacity Adequacy Index will also be prepared, which will provide details of additional assets that may be required. 

These indices not only will be helpful in determining maintenance requirements, asset replacements, upgrades, and capacity addition, but they will be invaluable in future updates of the infrastructure investment plan, as well as for the long list of proposed priority investment projects under each TISIP 2016−2025 update. The indices will also provide more detailed information on the maintenance requirements of existing assets to enable more accurate estimates of maintenance expenditures for the subsequent infrastructure investment plan.

2       Infrastructure Sector Update

2.1       Drivers

An analysis was made in TISIP 2011 of the key drivers of Tuvalu’s demand for infrastructure. This remains current, with the key drivers for infrastructure development as follows:

n population growth and economic activity; n isolation and small size of the nation, as well as the dispersion of its nine islands; n lack of resources; and n few options to increase economic growth based on international competitiveness.

An emerging driver of infrastructure demand constitutes climate change and its natural hazards. These now prominently feature in Tuvalu’s strategies for national sustainable development. 

2.2       Maritime Transport

With regard to the Maritime Transportation sector, there have been major infrastructure developments since TISIP 2011. These include (i) launching of the Nivaga III, a vessel donated by the Government of Japan to provide shipping services between the atoll of Funafuti and Tuvalu’s Outer Islands; (ii) feasibility work by the Asian Development Bank with regard to an Outer Island maritime infrastructure project; and (iii) an assessment of this sector, also by the Asian Development Bank. The maritime infrastructure project is for the construction of harbours on four outer islands for small work boats that load and unload the Nivaga III and other inter-island vessels.

TISIP 2011 lists, as a priority, the project of ancillary facilities that will improve cargo handling at the Port of Funafuti. Since it is a project that is still outstanding, it is included in the long list for TISIP 2016−2025. TISIP 2011 also contains the upgrade of Outer Island ports as a medium-term priority (also listed in the Recovery and Vulnerability Reduction Plan (RVRP) and addressed by the Asian Development Bank project), while the fisheries harbour project—a medium-term priority in TISIP 2011— is considered in TISIP 2016−2025.

The TKIII key performance indicator for the Maritime Transportation sector relates to the implementation of a maintenance plan for all government vessels. The target date for enforcement is 2016.

2.3       Air Transportation 

The resealing of the Funafuti International Airport runway has been completed under the World Bank’s Pacific Aviation Investment Program, while other investments—as well as the upgrade of the airport’s terminal and navigational aids—will soon commence under the same program. Periodic maintenance, in particular eventual resealing, is part of TISIP 2016−2025.

Proposals for a new international airport and the reinstatement of domestic air services are considered in TISIP 2011, both of which are contained in the list for TISIP 2016−2025. The carrying out of feasibility studies has been noted in order to more clearly define these projects.

The key performance indicators in TKIII for the Air Transportation sector relate to the feasibility studies on domestic air services (completed), surveillance of sites for airstrips by 2017, reconstruction of airstrips in Nanumea and Nukufetau by 2017, and a search for funding for the construction of other airstrips by 2018/19. Further feasibility studies relate to the relocation of the international airstrip (completed), access to funding by 2017, and the introduction of legislation for domestic air services by 2017.

2.4       Land Transportation

The resealing of roads on Funafuti atoll has been completed with additional financing under the World Bank’s Pacific Aviation Investment Program. Periodic maintenance of this asset, as well as its eventual resealing, forms part of TISIP 2016−2025.

A key performance indicator for the sector in TKIII is enactment of legislation for a Land Transportation Authority. The target date for this is 2017.

2.5       Water and Sanitation

The Government of Tuvalu has adopted a sustainable and integrated water and sanitation policy (Fakanofonofoga Mo Vai Mote Tumaa) that covers the period 2012−21. This policy promotes measures to improve water security as well as to develop more sustainable sanitation systems.

TISIP 2011 strongly focused on the Water and Sanitation sector, since Tuvalu had been experiencing a serious drought at the time. Of the three projects assigned high priority, the water consolidation project was pursued vigorously with major programs to improve rain water catchment and storage at the household and community levels, as well as to provide back-up capacity to small desalination plants. The other two projects to expand the use of composting toilets on Funafuti and the Outer Islands, respectively, have met with less success—perhaps due to community resistance to the technology—although they remain in the 2016 national Budget as being funded by the European Union’s Falevatie Phase II project.

The establishment of three water reserves on each island was identified as a project in the RVRP. It also is included in the long list. 

A key performance indicator in TKIII for the Water and Sanitation sector relates to sufficient storage water on all islands for a drought up to six months. An additional indicator is that which relates to the reduction in the number of buildings that lack efficient guttering and water tanks.

2.6       Waste Management

The Solid Waste Agency of Tuvalu continues to implement the integrated solid waste plan developed in 2005, and is currently preparing a National Waste Policy for the 2017−26 period and an Integrated Waste Management Plan for the 2017−21 period. Older landfills on Funafuti have been replaced with a new landfill under a project funded by the Government of New Zealand to repair the environmental damage associated with borrow pits, although this landfill has very little remaining capacity. Waste management is likely to be identified as a focal sector for European Union funding, which is currently being negotiated under its 11^th European Development Fund. Tuvalu is also covered by the Solid Waste Initiative by the Japan International Cooperation Agency (JICA) and Secretariat of the Pacific Regional Environment Programme under the Japanese Technical Cooperation Project Promotion of Regional Initiative Solid Waste Management in the Pacific Islands (J-PRISM).

2.7       Energy

Implementation of the Tuvalu government policy to shift from fossil fuel-based power generation to renewable energy continues under the Tuvalu Electricity Corporation’s master plan for renewable electricity and energy efficiency. This covers the 2012−20 period.

Stage 2 and Stage 3 of the plan to shift to renewable energy were considered highpriority projects in TISIP 2011, while Stage 4 is a long-term priority. Significant progress has been made with the implementation of solar photovoltaic systems on Funafuti and the Outer Islands through programs funded by the European Union, the Government of New Zealand, and the Government of the United Arab Emirates. An additional program is being developed by the World Bank to extend renewable energy coverage, provide battery storage for a more flexible power grid, and carry out pilots in wind generation. This program also will benefit electricity consumers throughout the country, as well as improve the efficiency of the Tuvalu Electricity Corporation. Also, Tuvalu is part of a fiveyear project, launched by the Japanese International Cooperation Agency in 2015, to introduce hybrid power generation systems. In sum, it is estimated that the renewable energy penetration as a result of these projects will reach approximately 40%. 

There will be an emerging need for the replacement of batteries associated with solar photovoltaic systems. This is taken into account for the 2016−25 period.

Key performance indicators in TKIII for the Energy sector are a renewable energy power production target of 100% by 2020, an increase in energy efficiency by 30% on Funafuti by 2020, the installation of grid-connected wind power by 2018, and a reduction in fuel use by the Transportation sector. Further indicators include a monitoring of the number of buildings/homes that use alternative energy sources and the volume of imported fossil fuels over the previous five years. 

2.8       Telecommunications

The Tuvalu Telecommunications Corporation (TTC) has a corporate plan for 2016, which includes the upgrade of bandwidth by end of year through agreements with the telecommunication companies, Kacific Broadband Satellite and ABS. The aim is to develop a network core on Funafuti with a 50 megabit bandwidth, and to connect all Outer Islands to 2G mobile services. It is intended to phase out landlines on Outer Islands, due to the high cost, and to rely fully on mobile services. Services on Funafuti were upgraded to 3G in 2015. TTC’s exclusive rights were revoked in 2011, although it remains the sole operator.

TKIII notes that telecommunications services in Tuvalu are currently of poor quality and are unprofitable as they hold back development. They are in urgent need of improvement. A joint New Zealand/World Bank mission reviewed TTC and the 

Telecommunications sector in Tuvalu in 2015, including its infrastructure and institutional support needs. This may lead to a support program for the sector, a critical development since improved telecommunications services (i.e., international and national connectivity by way of mobile and internet services) are vital to the economic and social development of Tuvalu. The proposed program of support would include the following: n Assist the Ministry of Communications and Transport to develop and implement a policy for information communications technology, new and amended legislation, and relevant reforms for the Information and Communications Technology sector. n Assist with the restructuring of the Telecommunications sector, including TTC.

n International connectivity (i.e., cable or long-term satellite arrangement). n Project management support. 

TISIP 2011 includes high-priority projects that extend mobile and internet services to all Outer Islands, as well those that relate to the power of telecommunications facilities— using renewable energy—on Outer Islands. The installation of a fibre-optic cable to Fiji represents a medium-term project, an option still in force although alternatives may also be considered. Work continues on the development of services for the Outer Islands. The further upgrade of satellite-based mobile and internet services for Funafuti and the Outer Islands, in addition to the fibre-optic cable to Fiji, are included in the long list of proposed projects for prioritisation under this TISIP 2016−25 update. 

Key performance indicators in TKIII for the Telecommunications sector relate to the monitoring of the number of households with internet access, land lines, and mobile phones. 

2.9       Coastal Protection

This Coastal Protection sector has been added to TISIP 2016−2025 based on the strong emphasis placed by TKIII on climate change, the environment, and the oceans and seas. The sector is also prominent in the RVRP.

Major coastal protection works on three islands (Funafuti, Nanumea, and Nanumaga) are included in the long-term program under RVRP and TISIP 2016−2025. Application for funding is being processed through the Green Climate Fund. The Government of Tuvalu is proposing other coastal protection works for Nukufetau, as well as a second stage of the Vaiaku waterfront coastal protection works. Coastal protection works for other Outer Islands is planned for a later stage. The Japan International Cooperation Agency is undertaking a pilot project to examine the effectiveness and adequacy of gravel beach nourishment for the purpose of reducing vulnerability to natural disaster and climate change. 

The TKIII key performance indicators for the Coastal Protection sector include the monitoring of the coastline reclaimed from erosion, cyclones and storm surge. It also includes sea defences built on all islands of Tuvalu.

2.10 Multi-Sector

TISIP 2011 includes the medium-term priority of a broad-based program of small-scale infrastructure investment on Tuvalu’s Outer Islands. This is being pursued through the Special Development Expenditure category under the national Budget, with an allocation of A$2.88 million for Outer Island projects in the 2016 Budget.

2.11     Education

The Education sector has been added to TISIP 2016−2025 as part of the drive towards social as well as economic infrastructure. Recent efforts to improve infrastructure in the Education sector have included the refurbishment of the Motofoua Secondary School on Vaitupu, funded by the Government of Japan, and the provision of funding by Australian Aid to refurbish Nauti Primary School on Funafuti. TKIII indicates that a feasibility study should be undertaken in relation to a new high school for Nanumea within the 2016-25 period.

Strategies in TKIII in relation to infrastructure for the Education sector include building Outer Island sports facilities, a multi-purpose gym, and a youth recreation centre. They also call for improving library and archive facilities.

2.12     Health

The TISIP 2016-2025 now includes the Health sector, which reflects the government’s intention to address social infrastructure. Princess Margaret Hospital is being refurbished with assistance from the Government of Japan, while the Ministry of Health’s Health Reform Strategy 2016−2019 includes proposals for new mini-hospitals in Nanumea and Vaitupu, as well as upgrades to Outer Island clinics. While a portion of the funding is earmarked for these projects in the 2016 Budget, the need to secure additional funding to ensure completion will be included in TISIP 2016−2025.

Strategies identified in TKIII for the Health sector include the upgrade of health infrastructure.

This sector is added to cater for social infrastructure. The government considered two new unfunded projects in the long list which were prioritised during the TISIP 2016-2025. 

These are a new police complex and a modern Parliament House.

3       Prioritisation Process

3.1       Establishing Project Lists

3.1.1     Ongoing and committed projects 

Table 3 reflects the major infrastructure projects that are ongoing or for which funding is committed. They form part of the prioritised and sequenced infrastructure investment plan for the next 10 years, which includes proposed high-priority projects for which funding is yet to be committed. Documenting the sequencing of ongoing and committed projects over the plan period will help identify the scope available for new projects in terms of financing and implementation capacity.

Table 3. Major Ongoing and Committed Infrastructure Projects

3.1.2     Long List of proposed projects

A long list of proposed projects for which funding has not yet been sourced is provided in Table 4. These projects have been screened, scored, and ranked using the prioritisation methodology described in Section 3.3. Subsequent developments include the commencement of work on the Nukufetau coastal protection project (Project CP2) and the announcement that funding has been approved from the Green Climate Fund for the coastal protection infrastructure project for the three islands of Funafuti, Nanumea, and Nanumaga (Project CP3). 

The list of projects originates from a range of sources, including the Te Kakeega III

National Strategy for Sustainable Development 2016−20 (TKIII); Public Sector Investment 

Program (PSIP) within the annual Budget; Tuvalu Infrastructure Strategy and Investment Plan (TISIP) 2011; Recovery and Vulnerability Reduction Plan; sector plans; and agency corporate plans, as well as from interviews with stakeholders in infrastructure sectors. It is noted that the PSIP includes a list of unfunded projects; this list, however, is not comprehensive and represents a “fully fledged” pipeline of investment projects (i.e., next-generation projects to follow those which are in progress or for which funding is committed).

Many of the projects in the list remain at the concept stage, with only limited documentation available and an absence of detailed costing. With TISIP 2016−2025 and other sources, however, it may be possible to build up the PSIP in the annual Budget into a more comprehensive project pipeline with more scrutiny in terms of project preparation, appraisal, prioritisation, and sequencing. TISIP will inform the PSIP by offering consolidated information on the infrastructure project pipeline that forms a large part of the PSIP. Sector ministries will draw on TISIP to frame their annual Budget submissions in preparation of the PSIP.

With regard to the Asset Management Framework, the list pre-empts those projects designed to ensure that major infrastructure assets are maintained in good condition and are fully operational by anticipating the eventual output of asset management work. An example is a project that relates to the periodic maintenance of the recently completed resurfacing of Funafuti’s roads and airport runway, the latter of which is expected to be essential in approximately 10 years. Another is the replacement of solar photovoltaic system batteries that have recently been installed and are expected to be replaced in coming years, possibly around 2023. 

* Included in this infrastructure investment plan as complementary activities.

Notes: TISIP = Tuvalu Infrastructure Strategy and Investment Plan; TKIII = Te Kakeega III, National Strategy for Sustainable Development 2016−2020.

3.2       Whole of Life Costing

TISIP 2011 described the key stages in the life cycle of infrastructure assets (GOT, 2012:39−40) all of which involve costs. These costs are as follows: n Concept development and planning: planning studies, concept design, and associated 

assessments, such as environmental impact. n Detailed design and documentation: detailed designs and specifications, as well as 

contract documentation. n Construction or supply: construction or supply of infrastructure, including allowance for 

escalation and contingencies. n Contract supervision: work that is done to the required standard, in accordance with contract requirements. n Operation and maintenance: operating and maintaining infrastructure over its useful life; maintenance includes routine small-scale activities undertaken regularly, as well as periodic maintenance for larger-scale activities at longer intervals. n Disposal or decommissioning: disposal of the asset, which may include 

decommissioning, removal, and clean-up.

Typically, cost estimates in the early stages of project development (including those sourced in relation to the list of priority projects) relate to construction and supply, excluding those costs registered above. While it is difficult to apply whole of life costing in a context where calculations are approximate aggregates with little breakdown into cost elements, the estimates in the prioritised and sequenced infrastructure investment plan (Table 10) attempt to apply this principle and build in allowances for design and supervision, as well as contingencies and maintenance costs.

3.3       Prioritisation Methodology 

TISIP 2016−2025 focuses on major infrastructure projects of national significance, such as those of a capital cost greater than A$400,000. Ongoing and committed projects form part of the infrastructure investment plan, together with a shortlist of proposed projects that are considered as high priority. Following the shortlisting of the list, the projects were screened and ranked by applying the Multi-Criteria Analysis (MCA) approach to establish their priority.

The original long list (Section 3.1.2) was based on the reviews of TKIII, PSIP in the Budget, sector plans, corporate plans, original TISIP 2011, and Recovery and Vulnerability Reduction Plan, among others, together with interviews with stakeholders in the various infrastructure sectors. Future updates to the TISIP 2016−2025 will depend on the Asset Management Framework and Plan (once completed), Asset Health Index, and Asset Capacity Adequacy Index, all of which will assist in identifying projects for the “long list”. These will include major assets that are nearing the end of their economic life, need upgrading, or should be added to the asset stock.

The list does not include projects that are ongoing or for which funding is already committed. It focuses only on those projects at the planning stage for which funding has yet to be committed. Project information is current as of March 2016.

3.3.1     Screening process

Projects were first evaluated under the following criteria:

n strategic alignment to confirm that projects are consistent with TKIII; n timing to confirm that projects are required within the next 10 years; and n readiness to confirm that the project is sufficiently developed to warrant prioritisation (at 

a minimum, the scope of the project must be clear).

3.3.2     Multi-Criteria analysis approach

The projects that progressed beyond the initial screening were ranked according to the MCA approach, which is similar to that used in the original TISIP. MCA is a rapid appraisal technique, used to guide project prioritisation in the absence of more complete project documentation and cost-benefit analysis. MCA identifies criteria relevant to the weighting for project prioritisation, in accordance with a project’s perceived significance, and then applies a scoring system that captures the project’s performance against the criteria. 

It should be noted that MCA does not establish the viability of projects (i.e., the precise relationship between benefits and costs); rather, it establishes the ranking of projects in relation to their performance against selected criteria. As such, it identifies those projects that justify further development along the project pipeline but do not warrant final approval of the project. Prior to implementation, projects must be fully documented and subject to more scrutiny from various assessments, such as the level of cost benefit analysis and environmental impact. In some cases, a need to modify or re-think the project may be required as a result.  

Criteria as a consequence of the MCA are, of necessity, general in nature given the need to apply them to projects across all infrastructure subsectors. It is essential that criteria are measured to the extent that they allow projects to be ranked. Criteria and subcriteria should also be kept to a manageable number to prevent the prioritisation exercise from becoming cumbersome. 

3.3.3     Prioritisation criteria

The fourth column of Table 5 provides the prioritisation criteria used in TISIP 2016−2025. They are presented in the context of the original TISIP 2011, Recovery and Vulnerability Reduction Plan, and TKIII.

Note: TISIP = Tuvalu Infrastructure Strategy and Investment Plan; RVRP = Recovery and Vulnerability Reduction Plan; TKII = Te Kakeega III, National Strategy for Sustainable Development 2016−2020.

3.3.4     Scoring methodology

The scoring methodology from 1 to 4, applied to TISIP 2016−2025, is similar to that used in the original TISIP 2011. This is as follows:

1   Nil or weak performance against criterion

2   Moderate performance against criterion: lower range 3 Moderate performance against the criterion: upper range 4 Strong performance against the criterion. 

Table 6 provides more detailed information on the meaning of scores for each of the 12 subcriteria used in the project prioritisation process.

3.3.5     Weighting methodology

As in the original TISIP 2011, equal weights were applied to the four major criteria in TISIP 2016−2025. These are as follows:

     Climate Change/Environment     25%

     Economic                                       25%

     Social                                              25%

     Project Sustainability                     25%

3.4       Outcome of the Process

Table 7. Comparison of Scoring and Ranking Processes

Initial screening

Criteria selection (7 criteria, subdivided into 20 questions)

Criteria weighted evenly

Scoring using: modified Delphi Technique (individual scoring compiled into anonymous results).

Coordinated by TISIP Taskforce (Director from each of the infrastructure sectors; planning, economic, and Cabinet representatives; and two private sector representatives (Tuvalu Association of Nongovernmental Organisations, Chamber of Commerce)). 

Individual scoring by Taskforce members (scores from 1 to 4 for each of the 20 questions across the seven criteria).

Group discussion to eliminate outliers.

Scores for the 20 questions were normalised into high, medium, and low bands (with a score of 3, 2, or 1 allocated accordingly) to avoid clustering.

Average score calculated for each criteria (given 

that there were differing numbers of questions per criteria) 

Scores by criteria were summed for each project, and projects ranked by the total score.

Sanity check: review of scores and standard deviations in results (requiring some adjustment of results).

Sequencing of projects based on funding and implementation capacity considerations.

Issues identified with the scoring and ranking process included sector bias and inconsistencies in scoring, and the TISIP Taskforce made some changes in finalising the ranking of priority projects. 

Initial screening

Criteria selection (4, each with 3 subcriteria)

Criteria weighted evenly 

Draft scoring by senior officials, with support from technical assistance team, by consensus (scores from 1 to 4).

Criteria weights applied and criteria scores consolidated for each project into a score out of 100, enabling projects to be ranked.

Draft scores reviewed by July 2016 workshop of stakeholders (working in groups by major criteria, rather than by sector) to produce final priority ranking.

Sequencing of projects based on funding and implementation capacity considerations. Final review by Steering Committee.

Of the 23 projects included in the long list in Table 4, four were eliminated as a result of their requiring more clarification on their scope of work prior to being scored and ranked. This additional technical work is included in the list of measures that are complementary to the infrastructure investment plan (Section 4.2). 

Nineteen projects were scored and ranked with the MCA approach. Figure 1 shows the total scores and Figure 2 provides their breakdown by major criteria group. 

As noted above, the scoring process was undertaken in two rounds. Draft scores were prepared by a group of senior government officials who brought to the table knowledge of the projects from central and sector agency perspectives. These scores were subsequently reviewed at a consultation workshop with a larger group of stakeholders from the infrastructure sectors. Based on this review, adjustments were made to 25 from a total of 228 scores (i.e., 19 projects times 12 subcriteria scores for each project). This represents adjustment to 11% of the scores. While some changes in the rankings were made, overall, there was a high degree of consistency in the two rounds of scoring. The top-ranked project and the top 12 projects remained the same, despite some reorder within the group. 

Twelve projects scored 65 or above out of 100 with the MCA approach. These are considered as projects of higher priority after taking into account implementation capacity and funding availability, and the requirements for ongoing and committed projects. Table 8 shows the highest ranked projects.

Table 8. Highest-Ranked Projects as a Result of the Multi-Criteria Analysis (in millions of Australian dollars)

The 12 projects are spread across nine sectors. Three projects are located on Funafuti (two of which are of significance to the nation as a whole), while nine involve one or more Outer Islands. 

Figure 3 demonstrates the priority of new investments in terms of their location in Tuvalu. 

Figure 4 illustrates their sectoral composition. 

Figure 3. Location of Priority New Investments (by estimated capital cost)

Figure 4. Sectoral Composition of Priority New Investments (by estimated capital cost)

Further projects that were included in the prioritisation exercise which could be considered in future updates of the investment plan are listed in Table 9.

Table 9.  Other Projects Included in the Prioritisation Exercise (in millions of Australian dollars)

4       Prioritised Infrastructure Investment Plan

4.1       Prioritisation and Sequencing of Investments

TISIP 2011 developed an infrastructure investment plan that took into account funding estimates. The plan included an investment of A$15.1 million per annum over 10 years, with A$7.3 million per annum as new capital expenditure and the balance representing the cost of operation and maintenance of new infrastructure (GOT, 2012:55 No.250).

TISIP 2016−2025 includes a higher level of investment, totalling approximately A$213 million over 10 years (i.e. A$21.3 million per annum, on average), given that the plan covers various additional sectors that are preeminent in TKIII. The investment includes ongoing projects for 2016, those for which funding is already committed, and those proposed that have been ranked as high priority.^[4] Provision is made for the climate proofing of new assets (Section 7.2) and allowances are included for the whole of life costing of projects, including design, contingencies, and incremental maintenance requirements. Furthermore, almost a quarter of those proposed infrastructure investments for the 2016−25 period relate to coastal protection works for which previously untapped sources of climate change adaptation funding are being sought.

Table 10 reflects a potential sequencing of investments under the Tuvalu Infrastructure Strategy and Investment Plan (TISIP) 2016−2025. The state of development of some projects in the investment plan (i.e., those that remain at the conceptual stage) indicates that the inclusion of particular projects in the plan should not be interpreted as having been formally approval or endorsed by the Government of Tuvalu. It is essential that every project follow established government processes for project approval, and be subject to a feasibility study, cost benefit analysis, and environmental impact assessment, among others, prior to implementation. Table 10 includes an allowance for annual infrastructure maintenance costs equal to an estimated average of 2% of the capital cost for all projects. While the actual maintenance costs expressed as a percentage of project capital cost are expected to vary for different projects over a broad range of 1% to 4%, project designs have not progressed sufficiently at the time of writing this report to allow for accurate estimates of maintenance costs.

As such, the major contribution of TISIP 2016-2025 is the strengthening of the government’s infrastructure investment proposal pipeline and the diligent project preparation, appraisal, prioritisation, and sequencing of investments. Sector ministries and central agencies will consider the pipeline in terms of the annual Budget^[5] and by central agencies in appraising submissions, thereby improving linkages between the investment planning and annual budgeting processes. TISIP 2016−2025 provides a mechanism that links the investment plan to the development of the Asset Management Framework, establishing a more systematic method to identify the maintenance requirements and investment needs for replacing, upgrading, and adding capacity to the infrastructure asset inventory. 

Table 11 sets out the potential funding modalities for the 12 proposed priority projects that have been identified in TISIP 2016−2025.

Table 11. Potential Funding Modalities for Proposed Priority Projects

(in millions of Australian dollars)

4.2       Complementary Measures

The following measures were identified as complementary to the infrastructure investment plan set out in TISIP 2016−2025. The completion of these could assist in identifying projects for consideration in future updates once the feasibility studies are completed.

n condition assessments of complex assets (e.g., ships and coastal protection structures); n development of a national building code, technical specifications, and construction standards n technical assessment of those options that provide for the mooring of buoys for interisland vessels in the Outer Islands; 

The total increase in annual maintenance requirements from plan implementation to the end-date of 2025 is estimated at A$3.4 million. The projects classified above involve investment in new infrastructure, upgrading of infrastructure, and periodic maintenance of infrastructure. For investments that involve new infrastructure (Figure 5), maintenance requirements represent additions to the maintenance task. For investments involving the upgrade or periodic maintenance of existing infrastructure, however, additional maintenance requirements will be offset to a greater or lesser extent by savings relating to the existing level of maintenance spending (i.e., assuming that some maintenance is being undertaken). Analysis of this data reveals that 60% of TISIP 2016−2025 projects by number and 67% by value (i.e., by capital cost) represent new investment, while the balance represents the upgrade or periodic maintenance of existing infrastructure.

Figure 5. Proportion of New Infrastructure in Investment Plan (by estimated capital cost)

The updated TISIP projects are classified as having high, moderate, or low capacity to self-fund maintenance. Analysis of the data reveals that no TISIP 2016−2025 projects exhibit a high capacity to self-fund maintenance, 23% by number and 26% by value exhibit moderate capacity, and 77% by number and 74% by value exhibit low capacity. For those projects exhibiting a moderate capacity, cost recovery should assist in addressing the maintenance task.

Finally, TISIP 2016−2025 projects are classified by the institution responsible for maintenance. An analysis reveals that the Government of Tuvalu will be responsible for the maintenance of 67% of projects by number and 42% by value, Kaupule for 13% by number and 32% by value, public enterprises for 17% by number and 25% by value, with households also bearing some responsibility, albeit minimal. A more complete picture of asset maintenance requirements and responsibilities will emerge once the Asset Management Framework is operational. 

5       Funding Considerations

5.1       Government

Table 13 provides a summary of government finance in accordance with the mediumterm fiscal framework published with the annual Budget. Domestic revenues, including distribution from the Tuvalu Trust Fund, are sufficient to meet recurrent expenditures. Nonrecurrent expenditures, however—including the Special Development Expenditure (SDE) category and transfers to the Tuvalu Trust Fund^[6]—result in a significant domestic funding gap, financed by budget support and other recurring assistance from development partners. An overall budget deficit of A$6 million remains in the 2016 Budget, while a balance or an overall surplus is achieved in most years. 

Table 13. Summary of Government Finance

(in millions of Australian dollars)

Source: Government of Tuvalu 2016 National Budget and Medium-Term Fiscal Framework 2016−2018.

The SDE finances a significant amount of infrastructure investment, with approximately 85% of the A$21.6 million allocation in the 2016 Budget earmarked for the infrastructure covered by this plan. Of this, an initial contribution of A$5 million is designated for a new Tuvalu Climate Change and Disaster Survival Fund^[7] to address the impacts of climate change and natural hazards. SDE projections in the medium-term fiscal framework amount to A$10 million in 2017 and 2018, respectively, while actual expenditure achieved over the period 2013−15 ranges from A$3 million to A$9 million. 

A debt sustainability analysis, undertaken by the International Monetary Fund,⁷ concluded that Tuvalu is at high risk of debt distress, with fiscal sustainability under threat from increases in the public expenditure financed by foreign grants. Public and publicly guaranteed debt stood at A$US14.6 million (i.e., 41% of gross domestic product) at the end of 2013. There are no proposals for new borrowings to finance infrastructure investments, given that bilateral development partners and multilateral finance institutions currently provide grant finance for these investments. 

5.2       Public Utilities

There are two public enterprises involved in the development of infrastructure and provision of infrastructure services in Tuvalu. These are the Tuvalu Electricity Corporation (TEC) and the Tuvalu Telecommunications Corporation (TTC). 

TEC is undergoing significant change in its mode of operation, with renewable energy sources—solar photovoltaic systems, in particular—becoming increasingly important. This change is not yet reflected in financial results, with a small loss (i.e., net loss after tax of just over A$50,000) being recorded in 2014, despite receipt of a grant for fuel from the Government of Japan approaching A$1 million. At that point, TEC’s fuel costs, alone, exceeded the value of its electricity sales. The audit report on TEC’s financial statements for 2014 denotes that working capital and shareholder funds were negative at December 2014. Projections (ADB, 2015) indicate that lower expenditure on fuel, as a result of the expansion of solar generation, will move TEC from a net loss to a situation of modest net profit (prior to any subsidies and grants) by 2017.  

TTC incurred losses in 2013 and 2014 of approximately A$186,000 and A$124,000, respectively. Shareholder funds were negative at the end of 2013, although they amounted to just over A$400,000 at the end of 2014, following an injection of funding by the government to repay debt to the National Bank of Tuvalu.

A process is in place for the government to fund the community service obligations of both public enterprises. It is important that this process is fully maintained. 

Neither TEC nor TTC is in a position to fund major capital expenditures. TEC should be in a position to fully fund routine maintenance—at least from 2017 when the impact of expansion of solar generation begins to flow through into financial results. More expensive periodic maintenance is likely to continue to require external assistance. TTC continues to record losses and, therefore, is not in a position to fully fund routine or periodic maintenance.

5.3       Development Partners

Tuvalu receives assistance from a broad range of development partners, some of which involves investment in infrastructure. Development assistance received in recent years, in relation to infrastructure investment, is summarised below.

Australia’s bilateral assistance to Tuvalu is budgeted at A$6.6 million for financial year 2015/16, while the total level of official development assistance to Tuvalu in that year is valued at A$10.2 million. The program focuses on three objectives: good governance, economic growth and stability; education and human resources; and environment and climate change. Support for investment in infrastructure has included the project underway to rebuild Nauti Primary School and support for long-term recovery efforts following Tropical Cyclone Pam.

New Zealand’s bilateral assistance to Tuvalu is budgeted at NZ$3.6 million for financial year 2015/16, with other funding in that year valued at NZ$11.4 million. Major infrastructure projects, supported by New Zealand in recent years, have included renewable energy (i.e., solar photovoltaic systems for five islands at a total cost of NZ$20 million) and reversing environmental damage caused by the borrow pits from airfield construction in World War II at a total cost of NZ$12 million, while a new fisheries complex is in the pipeline at a total cost of NZ$5 million. 

The European Union allocated €5.4 million to Tuvalu under its 10^th European Development Fund, with focal sectors being water, sanitation, and waste management. In addition, it allocated €2.25 million for renewable energy (i.e., solar photovoltaic systems for three islands and a biogas project). Under the 11^th European Development Fund, it allocated €6.8 million for investments in the Waste sector, the program for which is being developed. 

The development assistance to Tuvalu by the Government of Japan focuses on the following priority areas: environment/climate change (including long-term research, short-term measures such as structures, and solid waste management) and overcoming vulnerability (including support for education, health, maintenance of infrastructure with emphasis on maritime transport infrastructure, and fisheries). Major infrastructure projects supported by the Government of Japan in recent years have included the improvement of educational facilities at Motofoua Secondary School, improvement of the medium-wave radio broadcasting network, renovation of Princess Margaret Hospital, desalination and solar power generation, rehabilitation of TEC’s diesel generation system, eco-technological management of Tuvalu against sea level rise (now completed), and provision of the Nivaga III vessel. Ongoing regional projects are those for introduction of a hybrid power generation system and for pilot gravel beach nourishment.

The Government of Taipei, China is currently providing US$6.5 million per annum in budgetary support. This is in addition to a range of technical assistance initiatives.

The Asian Development Bank is preparing an Outer Island maritime infrastructure project for US$12.4 million. This will also involve grant finance. 

The World Bank is providing grants for major infrastructure projects, such as the Tuvalu component of the Pacific Aviation Investment Program (US$20.8 million, including additional financing to reseal Funafuti’s roads). It is also currently developing a renewable energy project (US$9.1 million).

5.4       Finance for Climate Change Adaptation 

5.4.1     Tuvalu’s climate change policy

Climate change issues have been mainstreamed into other key sectors since TISIP 2011. Crosssectoral linkages are now better understood and multisectoral infrastructure investments are being designed to reduce vulnerability and increase the resilience of infrastructure in order to improve community living standards, quality of life, and environmental health. 

Tuvalu’s new development and climate change policies reflect this approach. Climate change is mainstreamed into all sectors of the new development policy. Priority is given to coastal protection on Funafuti and the Outer Islands to increase resilience and to promote sustainability. 

The development and application of an Asset Management Framework provides a useful tool to identify assets that are most vulnerable to climate change events. It also serves to propose climate-proofing measures to be included in financial assistance programs. 

Several catastrophic climate change events have occurred in Tuvalu since 2012. These present a challenge to the resilience of local infrastructure and the preparedness of the government, local Kaupule councils, and residents on the Outer Islands. Tropical Cyclone Pam resulted in more than A$10 million in damage to Tuvalu and its islands in March 2015. Most islands experienced wave overtopping, with powerful waves moving coastal features inland.

5.4.2     Climate change financing: developments

Tuvalu’s Climate Change and Development Policies have been updated to include the Paris Agreement which falls within the 21^st Conference of the Parties (COP21) of the United Nations Framework on the Convention on Climate Change. Climate change financing mechanisms were strengthened to fund innovative solutions to increase resilience and reduce the risk of economic, social, and environmental loss to catastrophic climate change events. TKIII incorporates this policy shift with Climate Change and Disaster Risk Reduction highlighted as a central theme for government policy in all sectors including Infrastructure.

The Government of Tuvalu (GOT) has made some organisational changes to reflect the new emphasis on climate change adaptation and mitigation and disaster risk reduction. The Climate Change Unit and the Disaster Risk Reduction Unit are now under the Office of the Prime Minister. Established institutional arrangements under the Office of the Prime Minister and the Ministry of Foreign Affairs, which includes the Environment Unit, can facilitate access to multilateral funds.

The Paris Agreement is a key driver for climate financing in Tuvalu. More than 175 countries ratified the agreement to facilitate funding for Climate Change Adaptation, including climate proofing of core infrastructure investments. Direct access to the Adaptation Fund (AF), the Global Environment Facility, and the Green Climate Fund (GCF) is provided for in the agreement, although this access must be preceded by an accreditation process.

The GOT was instrumental in securing the inclusion of Article 8 on Loss and Damage. 

This will ensure a rapid response to climate change disasters with international support. The establishment of climate pooling and risk-sharing insurance should lead to more cofinancing by bilateral and multilateral donors. Signatories have pledged to reach a goal of US$100 billion per annum for mitigation and adaptation projects, while significantly increasing adaptation finance from current levels, and to further provide appropriate technology and capacity-building support. 

5.4.3    Tuvalu Climate Change and Disaster Survival Fund Act 2015

The Tuvalu Survival Fund was established in 2016 with an initial contribution by the government of A$5 million. Its aim is to channel climate change and disaster risk reduction contributions through one fund. This fund provides a reserve to enable rapid response for emergency assistance in evacuating residents—if necessary—providing food and temporary housing, and rebuilding damaged infrastructure. 

5.4.4     Bilateral donors

For the past decade, Australia, New Zealand, and Japan have been financing climatechange-related infrastructure projects to improve the resilience of infrastructure and communities to climate change events. They have been involved in supporting coastal protection and environmental management. 

5.4.5     Multilateral and regional donors

Multilateral donors include the United Nations Development Programme and the 

European Union, both of which have offices in Fiji. The Pacific Community and the Secretariat of the Pacific Regional Environment Programme are regional organisations that have climate change programs and provide training. These agencies focus on capacity building by providing training in Tuvalu and the region.

5.4.6     Multilateral climate change funds

Multilateral funds for climate change investments and environmental protection are available under the GCF, AF, Least Developed Country Fund, Special Climate Change Fund, and Global Environment Facility. Accreditation to these funds is critical to secure direct access. Established institutional arrangements under the Office of the Prime Minister and the Ministry of Finance and Economic Planning can facilitate accessibility to these funds.

5.4.7     Implications for current and proposed projects

Recent and current spending on projects involved in climate proofing infrastructure in Tuvalu are estimated at a combined US$150,000 to US$5 million for each project. This does not include spending to repair damage caused by tropical cyclones and other natural hazards, which has been estimated at A$6 million for immediate needs (Recovery and Vulnerability Reduction Plan 2015).

There are three potential sources of financing for adaptation measures. These comprise the GOT through capital expenses, bilateral and multilateral donors, and internationally dedicated climate change financing. Table 14 summarises the potential for accessing funding sources that provide financing for infrastructure investment. 

There is a high potential for accessing the AF and the Global Environment Facility, as the former has designated the Ministry of Finance and Economic Planning as the National Implementing Agency. The GOT plans to submit a Funafuti Coastal Protection Project to the AF for climate proofing funding by June 2016. 

Many of these funds are replenished on a rolling basis, so access may increase in the future. The focal point for access to these resources is through the Ministry of Finance and Economic Planning, supported by the Climate Change Coordination Unit and Disaster Risk Reduction Unit (both of which are in the Central Policy and Planning Unit, Office of the Prime Minister). Tuvalu also aims to achieve National Implementing Entity status, which would allow direct access and management of available international dedicated climate change financing (e.g., AF). 

To help ensure that climate change adaptation and disaster risk management measures are fully integrated as part of the planning and implementation of infrastructure, more emphasys is required to integrate these measures into sector activities and objectives from the outset of negotiations of various country strategies and agreements between the GOT and financiers.

5.4.8     Current progress

Accreditation

The GOT is working to align climate change projects and activities with its laws and policies for Climate Change and Disaster Risk Reduction. Some legal and policy updates are needed, although in general, the GOT has followed through with its Climate Change and Disaster Risk Reduction Policy (2012) in terms of mainstreaming climate change activities into other sectors. This should facilitate the accreditation process with the international climate change funds (i.e., AF, GCF).

Donor coordination

Current government priorities for Coastal Protection will attract funds from different sources (Table 14) as risk sharing becomes attractive to donors, especially new ones such as the GCF. Establishing an operational funding window with GCF as cofinancier may provide a starting point.

Program Integration

The Climate Change and Disaster Risk Reduction Policy (2012) includes Infrastructure asset protection against climate change as one of its main goals. Investment in infrastructure planning, implementation, and climate proofing will involve collaboration between ministries and departments to reduce vulnerability and risk and increase the resilience of infrastructure assets. 

Table 14. Climate Change Financing for Resilience, Adaptation, and Climate Proofing Measures for Current and Future Projects

Adaptation Fund (AF), Global Environment Facility and Green Climate Fund.

(The AF and Global Environment Facility are Trust Funds managed by the World Bank in Washington, D.C., and have clear funding access guidelines. The AF is established to provide direct access while the Global Environment Facility requires an administrating partner, often the United Nations Development Programme).

The Green Climate Fund, located in the Republic of Korea, so far, has funded one project in the Pacific, cofinanced with the Asian Development Bank.

Ministry of Finance and Economic 

Planning accreditation as National Implementing Entity (2015-2017). Technical assistance for AF accreditation process, provided by UN Environment.

Government of Tuvalu is preparing accreditation documents and proposals.

Government of Tuvalu seeks accreditation under same guidelines as the Adaptation Fund.

Eligible activities include institutional, community, and infrastructure vulnerability reduction measures. Potential source of future financing for coastal protection, climate proofing of infrastructure, and enabling environment improvements. Ministry of Finance and Economic Planning has been selected as the National Implementing Entity for AF grants, and is currently working to complete the accreditation process.

A total budget of A$42 million is being sought from the AF and Green Climate Fund.

5.5       Finance for Maintenance

In recognition of the lack of attention to asset maintenance in recent decades, a Deferred Maintenance Fund was established in 2015. Deferred maintenance is defined as asset maintenance that was not performed when it should have been and has been put off or delayed for a future period. The Deferred Maintenance Fund is managed jointly by the Secretary for Public Utilities and Infrastructure and the Secretary for Finance and Economic Development (with quarterly reporting to the Development Coordination Committee and Cabinet). It covers the following assets:

n buildings n ships and vessels n infrastructure n plant, machinery, and equipment n information communications technology hardware (excluding laptops and computers) n other fixed assets, excluding vehicles.

The Deferred Maintenance Fund is set up as an account within the Tuvalu Development 

Fund and receives an annual appropriation in the Budget, from which it received A$500,000 in 2015. A similar amount was allocated in the 2016 Budget, although it does not appear to have been transferred to the Tuvalu Development Fund and has therefore lapsed^[8]. The 2017 Budget includes an allocation of A$300,000 to the fund. 

Upon completion of the Asset Management Framework, the GOT will prepare a 10-year maintenance schedule for all assets with a purchase price greater than A$20,000. This will identify critical and urgent maintenance that will be given priority under the fund. 

The Deferred Maintenance Fund has a balance of A$447,000 as of January 2017. In future years, it will be advantageous to include a statement of the receipts into and expenditures from the fund with annual Budget documentation, as well as with the annual financial statements that are only available with some time lag.

Routine maintenance is covered separately within the recurrent budgets of ministries, and was allocated a total of A$1.6 million in 2016, which covers all GOT ministries, including those responsible for infrastructure. At present, it is difficult to judge the adequacy of this allocation, due to incomplete information on assets and their maintenance requirements. Preparation of an Asset Management Framework and plan is underway as an activity associated with the preparation of TISIP 2016−2025 (PRIF, undated). Once complete, this will provide more detailed information than is currently available on the historical cost, replacement value, and annual maintenance requirements of the current stock of infrastructure assets in Tuvalu. 

The maintenance implications of the investment plan associated with TISIP 2016−2025 are addressed in Section 4.3. It will be appropriate to review and update these maintenance implications once the Asset Management Framework is complete and better information is available on maintenance requirements. 

5.6       Summary

Finance for investment in infrastructure and maintenance of infrastructure is expected to originate from a combination of assistance from development partners and GOT funding. There are also emerging prospects of accessing a significant amount of international funding dedicated to climate change adaptation.

6       Implementation of the Tuvalu Infrastructure 

Strategy and Investment Plan

TISIP 2016−2025 recognises that, in addition to financing constraints, the investment plan is also faced with constraints in implementation capacity. These constraints relate to the construction industry (external and local); suppliers in Tuvalu and abroad; the capacity of the Government of Tuvalu (GOT) to plan, budget for, and supervise construction or supply contracts: and the capacity of funding agencies to deliver programs (often from afar in the case of Tuvalu).

6.1       Lessons Learned

A recent report (GOK, 2015) has identified lessons learned in Kiribati in monitoring and managing a large infrastructure development program that involves a range of funding agencies. This may have relevance in Tuvalu. The infrastructure development program in Kiribati has peaked at a scale that is double the national Budget and is triple the number of major projects normally in progress.

The lessons learned from Kiribati include the following: n A national infrastructure plan that prioritises and sequences infrastructure investments has the potential to play an important role in reducing program bunching and interproject issues, as well as to seek out linkages among sectors and projects. n It is essential that there is central oversight and management of investment plans, including guidance in relation to the medium- and long-term strategies of individual infrastructure sectors and their linkages. n It is essential to build capacity in sector planning for infrastructure sectors, either in line or central agencies (or both), and to strengthen sector coordination committees by ensuring that these have clear terms of reference and an adequate secretariat. n Government should develop its own capacity to support the administration of complex projects, including those funded by international financial institutions. n The project support team model for multiple output projects and the management contractor model for single output construction projects appear to work well, and they are preferred to the project management unit model at the line ministry level, which tends to be vulnerable to staff rotation, capacity, and performance issues.

A recent estimate (ADB, 2016) indicates that Tuvalu’s annual capital spending on infrastructure is currently in the order of A$20 million, of which approximately A$3.5 million (or 18%) is managed through to delivery by the Public Works Department.

6.2       Future Role of the TISIP

Infrastructure planning in small island states is perhaps best served by strong sectoral planning processes that produce plans for each of the key infrastructure sectors. This is combined with a strong national planning and budgeting system to produce a comprehensive public sector investment program. The processes include a strong project appraisal capacity activity to vet the project proposals developed by line ministries, as well as sound asset management systems. 

In such an ideal environment and recognising the shortage of planning capacity both in line and central agency in small island states, the preparation of a plan that combines infrastructure sectors and which occupy a niche between sectoral and national planning may not be considered a high priority in terms of public expenditure management.

In the case of Tuvalu, the coverage and quality of sector planning for the infrastructure sector is disparate. Some sectors have master plans that include future investment schemes, although not prioritised or costed and lacking the institutional mechanisms to monitor and update the plans. At the national level, TKIII provides significant overall guidance to infrastructure planning, although a comprehensive public sector investment program is lacking and project appraisal activity is given little attention. As such, a plan that brings together the infrastructure sectors, introduces sound and quantitative prioritisation methodology and develops a schedule for high priority investments required over the medium term, becomes essential.

With this in mind, the recommendation of TISIP 2011 to update the plan every two years remains valid. Updates constitute working documents that require a minimal cost to produce. Their focus should rest on the following priorities:

n maintain a pipeline of infrastructure investment projects; n review priorities; n improve the standard of project preparation and documentation; n improve the project appraisal activity; n develop training and capacity building programs; and n link the investment plan to the development of the Asset Management Framework, and plan to provide a more systematic process to identify asset maintenance and investment needs for the replacement, upgrade, and addition of assets.

The implementation progress of TISIP 2011 was reviewed in 2013 and the TISIP 2016-2025 is the first TISIP update. Subject to Steering Committee agreement,^[9] it is recommended that future updates remain the responsibility of the Department of Planning, Budget, and Aid Coordination of the Ministry of Finance and Economic Planning. Based on the current workload and low resource capacity of the department, some technical support to prepare the updates is likely to be necessary from local and/or international sources.

Consideration should be given to shifting the focus of this work in due course from the preparation of a formal infrastructure investment plan to that of supporting an infrastructure maintenance and investment process. This would not only provide continuity and strengthen the link between the Asset Management Framework and the Public Sector Investment Program in the annual Budget, but it would have better prospects for ensuring that it is a sustained component of Tuvalu’s planning and budget framework.

6.3       Other Stakeholders

6.3.1     Private sector

The major private sector organisation in Tuvalu is the Tuvalu National Private Sector Organization, which was established in 2012 and combines the Chamber of Commerce and the former Tuvalu Private Sector Organization. The Tuvalu National Private Sector Organization currently has 50 members from an estimated 200 plus businesses in Tuvalu, and it aims to promote the interests, well-being, and growth of Tuvalu’s private sector. The private sector takes a keen interest in the coverage and quality of infrastructure services as a major consumer of these services. 

Private businesses involved in infrastructure provision include a major hardware supplier and a number of smaller suppliers; individuals involved in repair and maintenance of buildings, vehicles and machinery; and individuals engaged in smaller construction jobs. As indicated, most of these businesses are operated by individuals rather than companies. Larger buildings, civil works, and significant maintenance works are handled either by the Public Works Department or foreign contractors. 

Larger projects undertaken by foreign contractors often engage locally available skills, although these arrangements are more in the nature of employment than subcontracting. Tuvaluans based overseas are beginning to take an interest in bidding for work in Tuvalu, and, in a couple of instances, have registered construction companies locally.

6.3.2     Nongovernmental organisations

The Tuvalu Association of Nongovernmental Organisations (TANGO) is an umbrella institution for local nongovernment organisations (NGO) in Tuvalu. TANGO aims to support the sustainable development of these NGOs by providing training, services, and information, and by encouraging collaboration and communication among local NGOs, government, and international agencies. TANGO currently has 52 member organisations and, of relevance to infrastructure planning, it engages with communities in areas such as Coastal Protection, Water and Environment, and Waste Management projects. TANGO provides a focal point for the expression of community views on the coverage and quality of infrastructure services.

TANGO is a member of the National Advisory Council on Climate Change, which has contributed to the development of coastal protection and other infrastructure-related responses to climate change. TANGO is also engaged in programs funded by the European Union in Water Supply and in Sanitation and Waste Management, which involve some funding being channelled through NGOs. 

7       Building Resilience into the Design and Planning of Infrastructure Investments

7.1        Climate Change and the Vulnerability of Infrastructure Assets

The International Panel on Climate Change explores vulnerability through three core concepts. These are, firstly, exposure or the magnitude to which a system is physically in harm’s way; secondly, the sensitivity or criticality of a system (i.e., its likelihood to be affected by a shock); and thirdly, the adaptive capacity of a system to cope or adjust to the negative impacts.

Vulnerability is the degree to which a system is susceptible or unable to cope with adverse effects of climate change (IPCC, 2007). The main threats and impacts of climate change in Tuvalu are shown in Table 14.

The Infrastructure Asset Management project will propose measures to increase resilience and reduce vulnerability of assets. Resilience is the ability of a system to continue to operate after a catastrophic event. 

Climate change events can cause catastrophic impact on land, especially near the coast, resulting in loss and damage to core public infrastructure assets. Losses from the wave overtopping of islands in Tuvalu caused by Tropical Cyclone Pam on 11−13 March 2015 were estimated at US$10 million initially, with more than half the damage occurring on the Outer Islands where there is less infrastructure and more vulnerability to catastrophic climate events. This is because some of the islands have no lagoon, and infrastructure, such as electric cables and telephone lines, has been placed close to the shore. 

Table 15. Main Climate Change Threats, Impacts Causing Loss and Damage to Assets, and Resilience Measures to Protect Them

7.2       Climate Proofing and Measures to Increase Resilience

Climate proofing measures to increase resilience of infrastructure to climate change events should be considered for all new infrastructure projects. An approach is outlined below and summarised in Table 15.

Table 16. Core Public Infrastructure Assets and Resilience Measures for Climate Proofing

7.2.1     Coastal protection projects and beach development

Several coastal protection projects have been proposed with no clear ownership or assigned responsibility for monitoring and maintenance of the coastal protection assets. These include new beach areas, seawalls, and jetties. More than 70,000 cubic meters (m³) of sand was dredged from the Funafuti lagoon in late 2013 at a cost of US$1.4 million, creating a beach in front of the government building and Vaiaku Lagi Hotel to a length of 270 m and extending 100 m into the sea by December. In January 2014, 20 m was lost after Tropical Cyclone Ula and in February 2014, 10 m was lost. Groynes, made from large 2 m³Geotextile bags filled with sand, are being constructed to increase the resilience of the asset. Erosion rates and turbidity will be closely monitored and further coastal protection structures will be installed if needed. These may include wave breaks.

Groynes were also used on a Beach Nourishment project, funded by the Japan International Cooperation Agency, where 4,500 m³ of sand was deposited along a 177 m stretch of coastline as a pilot project of between 2 m x 50 m (approximate) groynes (northern side: 51.4 m, southern side: 46.1 m) made of large boulders imported from Fiji at a cost of ¥200 million (i.e., approximately US$2 million). Losses have been much less and the water turbidity has decreased.

7.2.2     Seawalls

Resilience measures need to be included in the design of seawalls to be established on Nukufetau Island to replace an 80 m, 20 year old seawall made from concrete blocks and gabions. Designs, using smaller sandbags, have been proposed for this US$1 million project to protect a vulnerable area of coastline where the wave action causing shoreline erosion is strong.

7.2.3     Jetties and mini-harbours

The Asian Development Bank is funding the construction of jetties, forming miniharbours, on three Outer Islands at a cost of US$10 million. This will improve the safety of boat landings. Various design options are currently being examined to maximize resilience and asset life.

7.2.4     Buildings

Many government buildings have color-bonded roofs to protect them from corrosion. The GOT is seeking funding for a new Parliament House which will use climate proofing design. This includes aluminium or color-bonded roofs with windows treated with anti-corrosion coating. Metal parts need to be treated with the most cost-effective coatings. Studies have shown that corrosion rates will increase by up to 20% in the warm, humid climates of the Pacific region.

In Tuvalu, corrosion of steel is already a major problem. It reduces the life of core assets, including power transformers, telecommunications towers, and metal parts.

7.2.5     Airstrip and roads

The airstrip and roads were sealed in 2015. It appears, however, that no climate proofing considerations were included in the design. The base course is only 8 cm of crushed coral rock, surfaced with a 1−2 cm asphalt chip seal. The base course extends only 30 cm over the edge of the runway, so drainage may be inadequate. Cracks and soft spots have begun to appear on the runway. A higher grade of heat-tolerant asphalt should be used on the next seal. The runway has degraded from 50 tonnes of landing capacity in 1992 to 20 tonnes due to seawater infiltration of the sub-base as a result, in part, to sea level rise. The recommended base course is 20 cm, with an asphalt layer of 10 cm to climate proof the airstrip.

Roads should also be monitored for damage from wave overtopping and inadequate drainage. Culverts should be designed to accommodate higher rainfall intensity. Failure was observed on a causeway where the concrete shoulder had collapsed from overtopping by sea water.

7.2.6     Telecommunications 

It is essential that climate proofing measures be introduced to protect critical telecommunications assets. One of the legs at the base of a telecom tower collapsed during a recent cyclone, whereby the tower tilted and had to be supported with blocks. It has not yet been repaired. The TTC reported that phone lines on some of the islands were damaged, since they had been installed too close to the sea. Resilience measures for telecommunications equipment include anticorrosion treatment, stronger foundations to support the towers, and functioning backup equipment. 

7.2.7     Waste management

An efficient waste management system increases the resilience of road and other assets to catastrophic events. Waste is collected twice a week and a beach clean-up is organised once a week. Tuvalu is not litter free, although papers and plastics are rapidly removed from the roads after an event and the airstrip is cleaned daily. Stones thrown onto the roads from wave overtopping are quickly removed. This vigilance ensures that failures in the road network and damage are controlled.

A new waste dump has been established at the north tip of Fongafale Island, filled with 3,000 tonnes of solid waste from the ten borrow pits that were filled in under a project funded by the Government of New Zealand. Much of the waste is non-biodegradable (e.g., plastics, electronic waste, steel) and could be segregated. An old incinerator burns medical waste at the site and a new one has been ordered. 

The Solid Waste Agency of Tuvalu should consider introducing a recycling program for aluminium cans. The use of plastic bags should be discouraged. The agency plans to acquire a compactor to reduce the volume of the waste and to facilitate recycling. This will improve resilience to wave overtopping as the waste management system is developed.

7.2.8     Outer Island assets

Assets on the Outer Islands include buildings, communications equipment, jetties, seawalls, unsealed roads, water tanks and vehicles. These assets are vulnerable to wave overtopping, flooding, and high winds. Some water tanks were reported to have tipped over and been contaminated by sea water. Resilience measures include ensuring there are backup systems in place and that there is a supply of water that cannot be contaminated. The Emergency Warning and Disaster Risk Reduction systems can improve the resilience of these assets.

7.2.9     Issues and possible actions

Climate Change

Climate change threatens all assets, especially those that are critical and exposed. Cyclones are expected to become more intense and, combined with sea level rise, wave overtopping of roads is expected to occur more often with more damage to assets and risk to people.

Resilience

Climate proofing of assets is required to increase their resilience to catastrophic climate change events and reduce vulnerability. The cost of climate proofing should be estimated and included in future infrastructure projects.

Risk reduction

Resilience measures can reduce the risk of infrastructure failure after a catastrophic event relating to climate change, as well as increase donor confidence in infrastructure investments. Disaster risk reduction systems and access to the Tuvalu Survival Fund can ensure rapid response to catastrophic climate change events and increase the resilience of infrastructure assets. The GOT should include a section on risk management and climate proofing measures to increase resilience in future proposals for infrastructure project funding.

7.3         Cost Estimates for Climate Proofing TISIP 2016-2025 Projects 

Eight of the 12 projects entering TISIP 2016−2015 as high priorities have been identified as having a significant need for climate proofing, and the incremental costs—which have been included in the estimated capital costs of the projects—are set out in Table 16. It should be noted that these incremental costs are broad estimates that can be refined as the projects are further developed. Further information on climate proofing options for these projects is provided in the project profiles in Appendix 2.

Table 17. Incremental Costs of Climate Proofing¹ (in millions of Australian dollars)

Sources: Airport Runway Construction costs (see http://www.fdot.gov/planning/Policy/To%20Delete/ costs/Airports.pdf); Waste management costs (see http://siteresources.worldbank.org/INTUWM/ Resources/340232-1208964677407/Cointreau.pdf).

Note: N/A = not applicable.

¹  Estimates are in broad terms.

² Climate proofing is needed to reduce exposure of these critical assets by locating them as far as possible from the shoreline. Reinforced concrete support needed for towers along with anticorrosion treatment for metal parts to climate proof against increasing corrosion rates.

³ Lithium ion batteries dominate the market but are difficult to dispose of. Newer and cheaper flow batteries are being developed.

⁴ Polymer modified asphalt cement may be an option for climate proofing to increase the asphalt mixture’s durability and resistance to rutting and thermal cracking.

Appendix 3: References

Note that the following comprises a list of citations, as well as well as background documents that are not cited:

ABM (Australian Bureau of Meteorology) and CSIRO. 2011. Climate Change in the Pacific: Scientific Assessment and New Research. Volume 1: Regional Overview; and Volume 2: Country Reports. Australian Bureau of Meteorology and Commonwealth Scientific. www. pacificclimatechangescience.org/publications/reports/report-climate-change-in-thepacific-scientific-assessment-and-new-research/.

ADB (Asian Development Bank). 2015. Country Operations Business Plan: Tuvalu 2016−2018. October. Asian Development Bank. Manila. www.adb.org/sites/default/files/institutionaldocument/176145/cobp-tuv-20....

_______. 2015. Institutional Strengthening of the Ministry of Finance and Economic Development. Trip Report TA-8100 TUV (November) of the Public Enterprise Specialist under Asian Development Bank. Manila.

_______. 2015. Outer Island Maritime Infrastructure Project. Project Design Advance: Project Administration Manual. Project No. 48484-003. Asian Development Bank. Manila. www. adb.org/sites/default/files/project-document/177033/48484-003-pam.pdf.

_______. 2016. Institutional Strengthening of the Ministry of Finance and Economic Development. Interim Report TA-8100 TUV, February, p.4. Advisor – Public Works Department. Asian Development Bank. Manila. p. 4. 

AECOM New Zealand Limited. 2013. Pacific Aviation Investment Program (PAIP): Environmental Management Plan - Funafuti International Airport (FUN) and Road. Interim Working Document (Draft). November. 

GOK (Government of Kiribati). 2015. Infrastructure Sector Coordination Support: Lessons Learned. July. Government of Kiribati. Kiribati.

GOT (Government of Tuvalu). 2005. Tuvalu Integrated Solid Waste Plan. Final Working Draft. May. Funafuti. Government of Tuvalu.

_______. 2005. Te Kakeega II National Strategy for Sustainable Development 2005−2015.

Economic Research and Policy Division, Ministry of Finance, Economic Planning, and Industries. Funafuti. Government of Tuvalu. www.adb.org/sites/default/files/linkeddocuments/cobp-tuv-2015-2017-sd-02....

_______. 2012. Te Kaniva, Tuvalu Climate Change Policy, 2012: Charting Tuvalu through the Challenges of Climate Change. Funafuti. Government of Tuvalu.

_______. 2012. Tuvalu Infrastructure Strategy and Investment Plan, “Fakafoou. To Make New”. February. Funafuti: Government of Tuvalu. www.pacificdisaster.net/pdnadmin/data/ original/TUV_2012_Infrastructure_Plan.pdf.

_______. 2013. TISIP Progress Status, August. Funafuti. Government of Tuvalu.

_______. 2014. Tuvalu Government Financial Instructions: Made under Section 5 of the Public Finance Act. Version 2014.02. Funafuti: Government of Tuvalu. www.tuvaluaudit.tv/ wp-content/uploads/2016/05/Financial-Instructions.pdf.

_______. 2015. Climate Change and Disaster Survival Fund Act 2015. Funafuti. Government of Tuvalu.http://extwprlegs1.fao.org/docs/pdf/tuv152292.pdf.

_______. 2015. Tropical Cyclone Pam Recovery and Vulnerability Reduction Plan, May. 

Funafuti. Government of Tuvalu.

_______. 2016. Health Reform Strategy 2016−2019. Funafuti, Tuvalu. Ministry of Health.

_______. 2016. Te Kakeega III, National Strategy for Sustainable Development 2016 to 2020. Funafuti. Government of Tuvalu. www.adb.org/sites/default/files/linked-documents/ cobp-tuv-2017-2019-ld-02.pdf.

_______. 2016. National Budget 2016. Funafuti. Government of Tuvalu.

______. 2016. National Budget, Medium-Term Fiscal Framework 2016 to 2018. Funafuti. Government of Tuvalu.

IMF (International Monetary Fund). 2014. Tuvalu 2014 Article IV Consultation. Staff Report, August. Washington, DC. International Monetary Fund. www.imf.org/external/pubs/ft/ scr/2014/cr14253.pdf.

IPCC (Intergovernmental Panel on Climate Change). 2007. www.ipcc.ch/publications_and_ data/publications_and_data_reports.shtml.

Pacific Community. 2013. Sustainable and Integrated Water and Sanitation Policy 2012−2021. Fiji: SPC—Applied Geoscience and Technology Division (SOPAC). http://reliefweb.int/ sites/reliefweb.int/files/resources/Tuvalu%20Water%20Policy%202013%20A5.pdf.

PRIF (Pacific Region Infrastructure Facility) (undated). Tuvalu Asset Management Framework and Infrastructure Management Support. TA 8345 REG. Sydney: Pacific Region Infrastructure Facility. 

TEC (Tuvalu Electricity Corporation). 2012. Enetise Tutumau 2012−2020: Master Plan for Renewable Electricity and Energy Efficiency in Tuvalu. Funafuti. Tuvalu Electricity Corporation. http://prdrse4all.spc.int/system/files/master_plan_for_renewable_ electricity.pdf.

Tuvalu Electricity Commission. 2014. Annual Report 2014. Funafuti. Tuvalu Electricity Commission.

Tuvalu Telecommunications Corporation. 2014. Annual Report 2014. Funafuti. Tuvalu Telecommunications Corporation.

_______. 2016. 2016 Corporate Plan. Funafuti. Tuvalu Telecommunications Corporation.

Department of Communities and Local Government. 2009. Multi-Criteria Analysis: A Manual. January. London. Government of the United Kingdom.  http://eprints.lse.ac.uk/12761/1/Multi-criteria_Analysis.pdf.

World Bank. 2011. Country Assistance Strategy for Tuvalu for the period FY 2012−2015. 4 November. Washington, DC. International Development Association.

_______. 2014. Proposed Grant and Proposed Small Island Developing States Initiative 

Grant to Tuvalu for an Energy Sector Development Project. Project Appraisal Document 

No. PAD662. Washington, DC. International Development Association, World Bank. http://documents.worldbank.org/curated/en/519561468102907968/pdf/ PAD6620PAD0P140010Box385398B0OUO090.pdf.

_______. 2015. Pacific Aviation Investment Program: Tuvalu. Progress Report No. 9. Washington, DC. World Bank.

_______. 2016. Proposed Additional Grant and a Proposed Restructuring to Tuvalu for the Tuvalu Aviation Investment Project. Project Paper. March. Washington, DC. International Development Association.