Government of the Federated States of Micronesia

FSM Deepens Economic Ties with the European Union

NAO heads strategic team that marks several firsts in the growing relationship

PALIKIR, Pohnpei (Office of SBOC/FSM Information Service): July 10, 2008 - A small delegation headed by the nation's National Authorizing Officer (NAO) for EU Programmes successfully completed a mission to several European countries in an attempt to further broaden economic and development ties between Micronesia and the European Union (EU).

The mission - part of an ongoing effort by the FSM since 2000, when it originally signed the Cotonou Agreement with the EU - set several precedents in key meetings with the European Investment Bank (EIB) and the European Commission (EC).

Based on the outskirts of Luxembourg - one of the richest nations per capita in the world - the EIB is the globe's largest bank, with a portfolio of low-interest loans and development supportive programs reaching upwards of over €50 billion annually.

The EC is the governing body of the 28 European nations allied as a single economic and political force. The Euro, the official currency of the EU established in 2000, has become the world's strongest currency, eclipsing the British Pound and US Dollar and positioning the EU uniquely relative to the developing nations of the world.

Recognizing this, President Manny Mori has made it a key strategy to foster enhanced relations with the EU, with an eye toward the specific social, environmental and economic prerogatives that the EU can provide.

FSM NAO Fabian Nimea was joined by Assistant Director for Overseas Development Assistance, Olivier Wortel, and REP-5 Renewable Energy Country Manager, Peter Konings. Konings was able to present one of the highlights of the FSM REP-5 Programme of work at the 4th European PV Mini-Grid Conference on Renewable Energy in Athens, Greece, Sustainable Design for Mini-Grids in Yap State, Federated States of Micronesia.

REP-5 is the Renewable Energy Programme to Five Pacific Islands and a part of the 9th European Development Fund which the FSM accesses as a member of the African, Caribbean and Pacific (ACP) countries that have signed a partnership agreement with the EU.

In two meetings the FSM NAO delegation had with the EIB's David Crush, Head of the Caribbean and Pacific Division, and Irene Galvez, Monitoring Officer for Operations in the Caribbean and Pacific, support to the nation's four utilities and the private and energy sectors was discussed. The meetings marked the first time that a Pacific Island NAO has visited the EIB.

One of the key outcomes of the meeting was a commitment of a $1 million Technical Assistance program and potentially up to $3 million for a very low interest Energy and Development Credit Line package for the FSM that would be routed through the FSM Development Bank and the Office of the NAO. A central focus of the $1 million Technical Assistance portion of the EIB assistance would go toward a broad range of national development priorities, including renewable energy.

Another outcome was the spurred interest by the EIB to support the massive development initiative that is the Submarine Fiber Optic Cable project that the FSM is currently pursuing. The project is seen as a boon to spurring economic growth and job creation, as well as beneficial to the Health and Education sectors.

At the European Commission in Brussels, the FSM team met with Gary Quince, Director of the ACP EuropeAid Cooperation Office, Sanne Willems, Geocoordinator for ACP Coordination and Jose-Luis Trimino Perez, Head of Unit for the ACP EuropeAid Cooperation Office.

It was the first time that an NAO from the Pacific had gone to the EC in Brussels. Quince regarded the meeting as important and lauded the commitment displayed by the FSM.

Several development priorities of the FSM were highlighted, including an Integrated Solid Waste and Recycling Project for Chuuk, the Yap State Museum project, a Pohnpei State Public Transportation and Infrastructure project, a Kosrae State Senior Citizen's Health project, the Natural Resources and Renewable Energy Institute of Micronesia, a National Pension Fund program and a the establishment of a National Health Trust Fund.

As a result of the meeting, the EC and FSM agreed that various projects presented could be supported utilizing funds out of the Europe Aid Cooperation programme, as well as support emanating from what are termed the Energy and Water Facilities, two broad funding and technical programs related to the 10th European Development Fund, starting toward the end of 2008.

During the course of the mission, the Office of the FSM NAO was also able to secure approximately $1.4 million for the nation toward the ongoing implementation of the REP-5 programme of work, as well as sign off on contracts totalling over $400,000 to support several of the FSM's more established Non-State Actors (NSAs) or Non-Government Organizations (NGOs) - funds that will have direct positive environmental and economic impacts at the community level throughout the nation.

The FSM team also met with Jan Cloin, an Energy Advisor within the Dutch National Government. Preliminary results from the meeting focused on how the FSM can begin to access up to $2.5 million for various development projects with assistance from SenterNovem. Novem is an agency within the Dutch Ministry of Economic Affairs that helps to promote sustainable development and innovation both within the Netherlands and abroad.

In Eindhoven, Netherlands, at the Technische Universiteit (University of Technology), a meeting was undertaken with Dr. Henny Romijn to continue a process of cooperation and technical assistance in the field of RE policy development for the FSM and the region. The University has committed to working with the Office of the NAO to help finalize the process of the development of an integrated energy policy.

The mission also met with several of the leading renewable energy companies in Europe, where the latest technological advances, combined with the rapidly rising cost of power costs to consumers in the FSM, have made several different types of renewable energy technologies not only viable, but profitable as a source of sustainable energy production.

As a result of at least one of the meetings, part of the Presidential Compound in Palikir will be retrofitted with the latest advances in solar and wind energy power generation as a preliminary demonstration of the effectiveness of these technologies.

In all, the mission was effective in deepening the understanding the EU has of some of the priority needs of the FSM and the North Pacific. In addition, a broadened awareness and support of the growing renewable energy movement in the region was achieved.