Forming separate, miniature utility cooperatives on individual islands with an average population of only 1,511 people, each with a separate loan agreement and inspector, proved very difficult to implement. This suggests that one island is too small a unit to justify this approach. The availability of technical expertise on each island varies significantly, and the requisite financial-management and tariff-setting expertise is scarce. The government?s decision in 2009 to form regional utility companies (RUCs) was good for the project, as their taking over ownership and operation enables economies of scale and operational efficiencies, including more effective utilization of technical and managerial skills across islands. Had RUCs existed at the beginning of the project and acted as IAs for clusters of projects within their territory, numerous implementation and coordination problems could have been avoided.
Outer Islands Electrification (Sector) Project