Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00006206 IMPLEMENTATION COMPLETION AND RESULTS REPORT IDA-D0630/TF-A2332 ON A GRANT IN THE AMOUNT OF SDR 11.6 MILLION ($16.0 MILLION EQUIVALENT) TO THE Independent State of Samoa FOR THE WS: Pacific Regional Connectivity Program: Phase 3 - Samoa September 30, 2023 Digital Development Global Practice East Asia And Pacific Region CURRENCY EQUIVALENTS Exchange Rate Effective December 31, 2022 Currency Unit = Western Samoan Tala (WST) WST 2.68 = US$ 1 US$ 1.33 = SDR 1 FISCAL YEAR July 1 – June 30 Regional Vice President: Manuela V. Ferro Country Director: Stephen N. Ndegwa Regional Director: Sudeshna Ghosh Banerjee Practice Manager: Mahesh Uttamchandani Task Team Leader(s): Fawah Ngeniform Akwo, Siou Chew Kuek ICR Main Contributor: Kyoung Yang Kim ABBREVIATIONS AND ACRONYMS $ All dollars are in United States dollars ADB Asian Development Bank CR Civil registration CTSSU Centralized Technical Services Support Unit ERR Economic rate of return DFAT Australian Department of Foreign Affairs and Trade FM Financial management Gbps Gigabits per second GDP Gross domestic product GoS Government of Samoa ICT Information and communication technologies IDA International Development Association Mbps Megabits per second MCIT Ministry of Communications and Information Technology MoF Ministry of Finance NDID National digital identification OoTR Office of the Regulator PAD Project Appraisal Document PDO Project Development Objective QoS Quality of service RF Results Framework SAS Samoa-American Samoa (cable system) SBS Samoa Bureau of Statistics SSCC Samoa Submarine Cable Company WB-RPF World Bank and the Pacific Regional Partnership Framework CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 6 A. CONTEXT AT APPRAISAL .........................................................................................................6 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) .....................................11 II. OUTCOME .................................................................................................................... 13 A. RELEVANCE OF PDOs ............................................................................................................13 B. ACHIEVEMENT OF PDOs (EFFICACY) ......................................................................................14 C. EFFICIENCY ...........................................................................................................................16 D. JUSTIFICATION OF OVERALL OUTCOME RATING ....................................................................17 E. OTHER OUTCOMES AND IMPACTS (IF ANY)............................................................................17 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 19 A. KEY FACTORS DURING PREPARATION ...................................................................................19 B. KEY FACTORS DURING IMPLEMENTATION .............................................................................20 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 23 A. QUALITY OF MONITORING AND EVALUATION (M&E) .........................................................23 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE .....................................................24 C. BANK PERFORMANCE ...........................................................................................................25 D. RISK TO DEVELOPMENT OUTCOME .......................................................................................26 V. LESSONS AND RECOMMENDATIONS ............................................................................. 26 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 29 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 42 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 45 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 46 ANNEX 5. BORROWER, COFINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS .... 48 ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 49 ANNEX 7. SUPPLEMENTAL TEXT ........................................................................................... 50 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name WS: Pacific Regional Connectivity Program: Phase 3 - P128904 Samoa Country Financing Instrument Samoa Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency Ministry of Finance, Office Of The Regulator, Samoa Independent State of Samoa Bureau of Statistics, Samoa Submarine Cable Company Project Development Objective (PDO) Original PDO The Project development objective is to reduce the cost and increase the availability of Internet services in theIndependentStateofSamoa. Revised PDO The Project Development Objectives are: (a) to reduce the cost and increase the availability of internet services; and (b) to facilitate the development of initial foundations for digital government, including digital identification. Page 1 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 16,000,000 13,688,253 12,407,336 IDA-D0630 1,500,000 868,061 868,061 TF-A2332 Total 17,500,000 14,556,314 13,275,397 Non-World Bank Financing 0 0 0 Borrower/Recipient 5,760,000 0 900,216 Asian Development Bank 18,500,000 0 13,354,142 Local Sources of Borrowing 8,180,000 0 8,097,426 Country Total 32,440,000 0 22,351,784 Total Project Cost 49,940,000 14,556,314 35,627,181 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 19-Jun-2015 04-Sep-2015 20-Aug-2018 31-Jul-2020 31-Dec-2022 Page 2 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 16-Aug-2019 12.27 Change in Implementing Agency Change in Project Development Objectives Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Reallocation between Disbursement Categories Change in Disbursements Arrangements Change in Legal Covenants Change in Institutional Arrangements Change in Implementation Schedule Other Change(s) 22-Jan-2020 12.47 Reallocation between Disbursement Categories 04-Jun-2020 12.49 Change in Loan Closing Date(s) 26-Oct-2022 13.07 Change in Results Framework Change in Components and Cost Cancellation of Financing Reallocation between Disbursement Categories KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Satisfactory Negligible RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 18-Aug-2015 Satisfactory Satisfactory 0 02 11-Nov-2015 Satisfactory Satisfactory 0 03 05-May-2016 Satisfactory Satisfactory .50 04 27-Dec-2016 Satisfactory Satisfactory 1.71 05 30-Jun-2017 Satisfactory Satisfactory 3.50 06 07-Dec-2017 Satisfactory Satisfactory 7.96 Page 3 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) 07 29-Jun-2018 Satisfactory Satisfactory 10.45 08 20-Dec-2018 Satisfactory Satisfactory 11.83 09 20-May-2019 Satisfactory Satisfactory 12.27 10 19-Dec-2019 Satisfactory Satisfactory 12.47 11 31-May-2020 Satisfactory Satisfactory 12.49 12 26-Aug-2020 Satisfactory Satisfactory 12.51 13 02-Apr-2021 Satisfactory Satisfactory 12.75 14 13-Oct-2021 Satisfactory Satisfactory 12.99 15 03-Aug-2022 Moderately Satisfactory Moderately Unsatisfactory 13.07 16 24-Dec-2022 Satisfactory Satisfactory 13.28 17 30-Apr-2023 Satisfactory Satisfactory 13.28 SECTORS AND THEMES Sectors Major Sector/Sector (%) Information and Communications Technologies 100 Public Administration - Information and 7 Communications Technologies ICT Infrastructure 87 ICT Services 4 Other Information and Communications Technologies 2 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Private Sector Development 50 Business Enabling Environment 10 Regulation and Competition Policy 10 Jobs 30 Job Creation 30 Public Private Partnerships 10 Page 4 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Urban and Rural Development 60 Urban Development 30 Urban Infrastructure and Service Delivery 30 Rural Development 30 Rural Infrastructure and service delivery 30 ADM STAFF Role At Approval At ICR Regional Vice President: Axel van Trotsenburg Manuela V. Ferro Country Director: Franz R. Drees-Gross Stephen N. Ndegwa Director: Pierre A. Guislain Sudeshna Ghosh Banerjee Practice Manager: Randeep Sudan Mahesh Uttamchandani Fawah Ngeniform Akwo, Siou Task Team Leader(s): Natasha Beschorner Chew Kuek ICR Contributing Author: Kyoung Yang Kim Page 5 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context Country Context at Appraisal 1. Samoa is an island country in the south-central Pacific Ocean, highly exposed to natural hazards and largely dependent on tourism, agriculture, and fisheries. The total population was approximately 203,571 1 (at appraisal) with an average population growth rate of 0.72 percent over the period 2005-2015 and a gross domestic product (GDP) of $824 million. 2 Samoa lies approximately 3,000 kilometers north of New Zealand, 4,000 kilometers south of Hawaii and 130 kilometers west of American Samoa. An archipelago of nine islands makes up Samoa, including Upolu and Savai’I. 3 Population distribution is across these two main islands: at appraisal, Upolu accounted for around 75 percent of the population while Savai’i, the largest island in the archipelago, accounted for the remaining 25 percent. In 2015, the Human Rights Protection Party was in power, ruling for almost 30 years, before the Party was succeeded by the Faʻatuatua i le Atua Samoa ua Tasi party in May 2021. 2. GDP per capita was $4,048.5 in 2015, above the average of $3,723.9 among Pacific Island small states. 4 By 2015, Samoa was well on its recovery from two natural disasters—a tsunami in September 2009 and a cyclone in December 2012, which had devasted Samoa’s main economic outputs of agriculture and tourism. 5 Key findings of the 2013/14 household income and expenditure survey 6 indicated the need for continued investments in communications infrastructure to allow the rural population to access markets as well as quality and affordable health, education, and financial services. The survey reported the proportion of population below basic needs poverty lines to be around 18.8 percent in the survey year 2013-14. 3. Samoa, like many other small island states, faced challenges of isolation from major markets, small market size, and dispersed population across islands, limiting economic opportunities. Regionally, there was an ongoing effort to benefit from economies of scale by connecting small island states and enhancing regional public goods. The Small States Developing States Forum (SIDS) in 2014 highlighted the need to tackle key bottlenecks and enhance competitiveness through private sector participation, to expand access and options to public services including telecommunications. 7 By lowering communications costs across island states, countries could reap opportunities to diversify the economy, increase GDP growth, and create jobs. The Framework for Action on ICT for Development in the Pacific, endorsed by 1 World Development Indicators. Population, total – Samoa 2 World Development Indicators. GDP (constant 2015 $) - Samoa 3 Four islands, namely Upolu, Savai’i, Manono and Apolima – are inhabited, whereas the rest – Fanuatapu, Namu’a, Nu’utele, Nu’ulua, and Nu’usafee – are uninhabited. 4 World Development Indicators. “GDP per capita (current $) - Samoa, Pacific Island small states”. Pacific Island small states include Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, Palau, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu. 5 International Monetary Fund. (2017). Samoa: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Samoa. Washington, D.C.: International Monetary Fund. 6 Samoa Department of Statistics and UNDP Pacific Centre. 2013-2014. Samoa Household Income and Expenditure Survey Poverty Report. Samoa Department of Statistics. Retrieved from https://spccfpstore1.blob.core.windows.net/digitallibrary- docs/files/8a/8ab741ab38c84030ddf73af5ddfb607f.pdf 7 World Bank. 2014. Small States Forum 2014: The Private Sector as an Engine of Growth and Service Delivery. World Bank, Washington D.C.: https://www.worldbank.org/en/events/2014/10/08/small-states-forum-2014#4 Page 6 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) ministers in the region, attempted to mobilize information and communication technologies (ICT) “for development, governance and sustainable livelihoods of Pacific communities.” 8 In 2009 the World Bank commissioned a study to a firm named Polyconseil to explore solutions to improve connectivity in the region and identified undersea cables as the most cost-effective medium-term solution. 9 The Bank then initiated a Pacific Regional Connectivity Program Series of Projects (SOP) that was approved by the World Bank’s Board of Directors in August 2011. 10 The first phase involved financing of the Tonga-Fiji cable system which was ready for service (RFS) by August 2013. The second phase supported the East Micronesia Cable System. 11 This Project constituted the third phase. 12 Subsequent phases involved Fiji and Kiribati. 4. By August 2019, the Project had incurred savings of $4.382 million in IDA credits (see Rationale for Changes and Their Implication on the Original Theory of Change). The Government of Samoa (GoS) wanted to leverage the savings and improved connectivity to support the initial foundations of digital government and establish an NDID system and a digital government platform. A robust digital infrastructure also offered broader benefits in the form of national digital ID (NDID). Policymakers in Samoa understood the complexities of service delivery to the citizens and residents of Samoa in the absence of a proper NDID system. A combination of IDs, such as passports and driver’s licenses, were used for ID and authentication purposes. Samoa had a civil registration (CR) system that tracked birth and death registration, but the system needed an upgrade urgently. An infrastructure that could uniquely identify citizens and residents of Samoa in real-time for both in-person and in online transactions would minimize the time and budget for data collection, easily resolve issues of duplication, and help the government develop policies and strategies to improve people’s lives. GoS wanted to use the improved digital infrastructure to standardize siloed software and back-office systems at different government agencies. GoS also assessed that an NDID system could be used for voter registration for an upcoming election in 2021. This would entail GoS to design and procure an NDID system, conduct a nationwide registration of its citizens, and integrate additional service elements into the NDID, all before March 2021. The system would benefit every economic activity.13 In addition, GoS was committed to achieving Sustainable Development Goal target 16.9 to “provide legal identity for all, including birth registration” by 2030. Furthermore, an NDID system would accelerate GoS’s progress towards the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) Regional Action Framework on Civil Registration and Vital Statistics Decade (2015-2024). 14 Sector Context at Appraisal 5. 2015 marked a decade since market liberalization was begun in Samoa. The country enacted the Telecommunications Act in 2005, making it one of the first Pacific Island states to privatize its state-owned telecommunications company. Market liberalization had changed the patterns of telephony service usage. Three 8 See Declaration of the ICT Ministerial Meeting, Tonga, June 18, 2010. Secretariat of the Pacific Community (2010) e-Talanoa: Issue 1. Retrieved from https://www.jica.go.jp/Resource/project/fiji/002/materials/pdf/e_talanoa_issue_01_01.pdf 9 Pacific Regional Telecommunications Backbone Network Assessment and Implementation Options Study. World Bank/Polyconseil (2009) Several sets of options analyses (technical, economic, financial) of the cable system had been conducted by the Bank with considerations at regional, subregional, and point-to-point cable route options, cooperation with neighboring countries, and alternative satellite connections. 10 See Pacific Regional Connectivity Program. https://projects.worldbank.org/en/projects-operations/project-detail/P113184 11 According to the description on additional financing to the second phase of Pacific Regional Connectivity Program Project, the East Micronesia Cable System “will connect Kiribati (Tarawa), Nauru and FSM (Kosrae) to Guam via the existing HANTRU-one cable system and landing point in FSM (Pohnpei).” See https://documents.worldbank.org/en/publication/documents-reports/documentdetail/687711494852044530/micronesia-second- phase-of-pacific-regional-connectivity-program-project 12 The final shortlist of options was narrowed down to the Samoa-Fiji route on the basis that it offers a straightforward point-to-point link to the Southern Cross Cable Network at reasonable operating costs. 13 There were several other uses of NDID, such as know-your-customer requirements in financial services, unique identification of patients, students and passport applications, etc. 14 See Economic and Social Commission for Asia and the Pacific (UNESCAP). https://sdgs.un.org/un-system-sdg-implementation/economic-and- social-commission-asia-and-pacific-unescap-24510 Page 7 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) telecommunications service providers, Bluesky Samoa (later rebranded as Vodafone Samoa in April 2020), Digicel, and Computer Services Ltd., and four main internet service providers offered mobile and fixed internet services. Telecoms market liberalization promoted competition and stimulated price reductions that allowed more Samoans to access telephony services. At appraisal, around 73 percent of the population had access to 3G networks. The proportion of households with mobile phones increased dramatically from 34 percent in 2006 to 96 percent in 2011. By end-2014 Samoa had approximately 1,300 fixed broadband subscribers and around 27,000 mobile broadband subscribers. The rapid adoption of broadband was in line with the targets proposed by the Ministry of Communications and Information Technology (MCIT) in the 2012 National Broadband Policy (see Appendix 6.1). 6. Samoa relied on satellite and a single undersea cable for first mile connectivity 15 (internet’s first entry point to the country). At the time, American Samoa was connected to Hawaii through the American Samoa-Hawaii Cable System (ASH, decommissioned as of June 2020), and the Samoa-American Samoa (SAS) cable connected Apia and Samoa to Pago Pago in American Samoa, offering a maximum capacity of 1 gigabit per second (Gbps). 16 Bluesky held a monopoly on ASH/SAS as its primary user while other telecommunications providers such as Computer Services Limited and Digicel purchased smaller amounts of lease capacity and relied on alternatives such as geostationary and other three billion (O3b) 17 satellites. Bluesky also controlled the cable landing station in Apia. This posed a barrier for connectivity for telecom operators other than BlueSky and resulted in a high price for international bandwidth, approximately $1,500 per megabits per second (Mbps) per month, 18 which also prohibited access to and availability of internet to end-users. Rationale for Bank Involvement 7. Samoa urgently needed access to higher capacity international connectivity to meet the growing domestic demand for higher bandwidth from increased consumption of video streaming and multimedia and institutional use. The Project Appraisal Document (PAD) projected domestic demand to grow ten-fold from 420Mbps (2015) to 4Gbps (2021) and reach 29Gbps by 2028. By 2014, GoS launched a new initiative to be supported by ASH, “Samoa National Broadband Highway”, combining fiber and wireless networks across all government offices, schools, and hospitals in Upolu and Savai’i. The status quo would max out SAS cable’s threshold of 1Gbps, resulting in severe network congestion. 8. GoS recognized the ICT sector as a source of economic growth and social stability. 19 Limited infrastructure investment resulting in high prices and limited availability of internet could potentially impede Samoa’s progress towards a fully digitalized economy. In this context GoS sought to finance and operate a new cable system and sought the Bank’s support given that the Bank had a longstanding engagement in the telecommunications sector in Samoa including postal reform, telco liberalization and the privatization of SamoaTel. The Bank ensured that the Project would also mobilize private capital through a public-private partnership with the three main operators in Samoa. The Bank financed the design and establishment of the Samoa Submarine Cable Company (SSCC) which was a special purpose vehicle that would procure and operate the Samoa-Fiji cable. The Bank required a minimum 50 percent private sector financing under a 15 Middle mile connectivity refers to the national transmission network comprised of a mix of fiber optic cable, copper cable and microwave backhaul. PAD explains that Bluesky primarily relied on fiber optic cable, which was resilient to cyclone-related hazards, whereas Digicel had a metropolitan fiber loop in Apia and leased fiber from Samoa’s Electric Power Corporation and used backhaul in other areas. Both mobile network operators had a mixture of fiber, copper and microwave as backhaul with fiber/copper used predominantly in metro areas. 16 For a map of the retired ASH cable see https://www.talanei.com/2020/08/13/am-samoa-to-hawaii-cable-decommissioned/; for a map of Tui Samoa, see https://www.submarinecablemap.com/submarine-cable/tui-samoa 17 The name "O3b" stands for "Other 3 billion," referring to the approximately 3 billion people in the world who lacked reliable and affordable broadband internet access when the O3b Networks company was founded in 2007. 18 This figure was an estimation from the regulator as a reasonable price of international connectivity through SAS/ASH cable to telecom operators other than Bluesky as none of the prices for international bandwidth were made public. 19 As evidenced by the outcomes of ICT infrastructure investments made in Fiji, Papua New Guinea, Solomon Islands, Tonga, and Vanuatu. Page 8 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) private-public partnership (PPP) framework acceptable by the Bank 20 (see Annex 7.2 for details of the Bank’s conditions). GoS had set up a Project Steering Committee (PSC) that included members of the government such as MCIT, Ministry of Finance (MoF), the Attorney General’s Office, Office of the Regulator (OoTR) and private sector stakeholders such as Digicel, Computer Services Limited, and Bluesky. GoS requested support in other areas to strengthen the capacity of the government. For instance, if SSCC demonstrated monopolistic pricing or anti-competitive behavior, OoTR would need sufficient capacity to enforce regulations that promote competitive behavior. The Project ensured open access and nondiscriminatory access to international bandwidth, safeguarding the interests of consumers by adding a covenant and a disbursement condition in Component 1 that required SSCC to provide a reference interconnection offer to the regulator. The Articles establishing SSCC also capped shareholder returns. After deliberation among the PSC members, the connection route from Samoa to the Southern Cross Cable Network in Fiji was selected. This route offered reliable access to Australia and the United States and offered attractive onboard bandwidth pricing models. Theory of Change (Results Chain) 9. The Project pre-dated the use of Theory of Change (ToC) and the PAD did not include any ToC. The ToC and the visualization along with critical assumptions presented in Figure 1 were retrofitted to match the Project Development Objective (PDO) and the Project design, based on the restructured version of the Project as of October 22, 2022. Figure 1. Theory of Change (Results Chain) Ac�vi�es Outputs Outcomes/PDO Long-term Outcomes Expansion in network capacity fosters Design, supply and Increased interna�onal competition at retail market, thereby installa�on of a new cable bandwidth and monthly lowering costs. system linking Samoa to Fiji volume of data Objec�ve 1: Reduce • Improved cost of internet standard of living Construc�on of landing Increased private sector services of Samoan people sta�ons in Savai’i and par�cipa�on in telecom Upolu infrastructure • Enhanced access Objec�ve 2: to informa�on Prepayment of 10Gbps The private sector is Increase availability willing to invest in the and services capacity on Southern Cross of internet services telecom sector. par�cularly for Cable and landing services rural in Fiji. Acquisi�on of equipment, communi�es and systems and so�ware low-income Strengthening the enabling procurement for telecoms The government is willing to carry out necessary and timely policy and households environment of the ICT regulator legislative reforms for the sector and na�onal digital development of national digital ID. • Increased Cer�ficate of ID. business and job Memorandum on updated Objec�ve 3: na�onal digital ID bill Develop founda�ons opportuni�es of digital Suppor�ng MoF in project Training conducted for government Legend: Critical Assumptions management OoTR and MoF staff including digital ID Community is open to ID-related Consulta�ons with Increased ci�zen interventions through enhanced citizen awareness and consultations community on the awareness of digital ID proposed na�onal digital ID and civic par�cipa�on in Community is open to consultations on digital ID projects NDID bill and provides constructive feedback. 20Shareholders of SSCC included the Government of Samoa, Samoa National Provident Fund, Unit Trust of Samoa, Samoa Life Assurance Corporation, Bluesky Samoa Ltd, Computer Services Ltd, and Digicel Samoa Ltd. Half of the shareholders were from the private sector. Page 9 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Project Development Objectives (PDOs) 10. The original PDO as described in the PAD was to reduce the cost and increase the availability of internet services in the Independent State of Samoa. Key Expected Outcomes and Outcome Indicators 11. This ICR assessed the following objectives of the operation: (1) reduce the cost of internet services, (2) increase the availability of internet services and (3) facilitate the development of initial foundations for digital government, including digital ID (see paras. 17-19 for more information on objective 3). The Project pursued these outcomes by financing the construction of a 1,385km (this refers to commissioned length while actual is 1,693 km) 21 submarine cable system that would enhance competition in international bandwidth at the wholesale level. This was expected to lower prices at the wholesale and increase competition at the retail level, thereby lowering prices for end-users and expanding network coverage throughout Upolu and Savai’i. The Project also sought to strengthen the capacity of the regulator in addressing growing competition in the ICT sector, as well as the government’s capacity to manage the Project and establish the groundwork for digital government and digital ID. Key indicators were assessed for each of the objectives and all figures were provided by telecom operators and verified by the regulator unless indicated otherwise (See Annex 7.3). Components 12. The Project had three original components with total cost estimated at $49.94 million. Financing comprised a $16 million IDA grant, $5.76 million of counterpart contribution from GoS, $18.5 million cofinancing from the Asian Development Bank (ADB), $1.5 million grant financing from the Australia Department of Foreign Affairs and Trade (DFAT), and $8.18 million investor financing through the SSCC. Components 1, 2, and 3 were implemented by SSCC, OoTR, and Ministry of Finance (MoF), respectively (see financing plan at appraisal and actual cost in Annex 7 Tables A7.2 and A7.3). Actual cost is an estimation of total expenditure and outstanding commitments reported in the final Interim Financial Report covering period January 2023 to March 2023. The following costs ‘at appraisal’ and ‘actual’ refer to sum of all contributions from IDA, ADB, DFAT, SSCC and GoS. 13. Component 1. Samoa-Fiji Cable (at appraisal $47.64 million; actual $32.7 million). The component had three subcomponents and are detailed below. • Component 1(a). Submarine Cable System (at appraisal $37.38 million; actual $23.1 million). The subcomponent carried out the design, supply, and installation of a submarine cable system to connect Samoa (Upolu and Savai’i) to Fiji (Suva), including undertaking a marine survey and financing the cable manufacture and cable deployment- marine operations. The IDA grant was initially planned at $14.0 million; however, the actual IDA contribution was $9.77 million. • Component 1(b). Landing Stations and Ancillary Equipment (at appraisal $2.85 million; actual $2.61 million). The subcomponent included the construction of landing stations and ancillary facilities in Savai’i and Upolu, including acquisition and installation of onshore equipment. SSCC, DFAT and GoS provided financing. • Component 1(c). Additional Costs (at appraisal $7.41 million; actual $6.94 million). The subcomponent included financing of a 15-year indefeasible rights of use to provide 10Gbps capacity on the Southern Cross Cable and long- term landing services in Suva and Fiji. The submarine cable Tui Samoa was designed to connect to the Southern 21 Telegeography. https://www.submarinecablemap.com/submarine-cable/tui-samoa Page 10 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Cross Cable which connected Fiji to the rest of the world including the US (through Hawaii), Australia, and New Zealand. The additional cost included management costs associated with the operation of the SSCC. SSCC and GoS provided financing. 14. Component 2. ICT Regulatory Technical Assistance (at appraisal $1.44 million; actual $0.91 million). The component was designed to carry out a program of activities designed to enhance regulatory capacity of the Office of the Regulator, such program to include, inter alia: (a) review, development, and implementation of effective regulation for the ICT sector with a particular focus on wholesale markets; (b) review (and update) of existing legal regulatory framework; and (c) conduct a nationwide consumer survey on the benefits of ICT. The IDA grant was initially planned for $1.25 million, whereas the actual contribution was $0.82 million. GoS contributed the rest. 15. Component 3. Project Implementation and Administration (at appraisal $0.86 million; actual $1.26 million). The component carried out a program of activities designed to strengthen the capacity of MoF to process Project transactions, implementation, and management, and consisted of: (a) Project finance and transactional assistance in connection with the institutional design and operationalization of the Samoa Submarine Cable Company (SSCC) pursuant to public-private partnership arrangements, including independent appraisal of the proposed structure of SSCC; (b) overall Project coordination, financial and contract management, procurement, communications, outreach, reporting, audit, monitoring, and evaluation. The IDA grant was $0.75 million initially, whereas the actual IDA contribution was $1.04 million. GoS financed the rest. 16. Component 4. National Digital ID (NDID) system development (at restructuring $4.1 million; actual $1.04 million) was added through the first restructuring in August 2019. This component consisted of three subcomponents with SBS as the implementation agency and fully financed by IDA grant. • Subcomponent 4(a). Legal and regulatory enabling environment (at restructuring $0.5 million; actual $0.46 million); • Subcomponent 4(b). Advisory Assistance on a Samoa Digital Government Platform (at restructuring $0.4 million, actual $0.18 million); and • Subcomponent 4(c). Establishing the NDID system and upgrading the Civil Registration (CR) system (at restructuring $3.2 million; actual $0.39 million) 17. The various subcomponent activities were to be implemented in four phases. In Phase 1, the NDID and data protection and privacy law would be enacted and regulations would be promulgated, which would include public consultations. In Phase 2, the NDID system and new CR system would be procured. Phase 3 involved mass enrollment and development of initial use cases for authentications for public and private sector service delivery. Phase 4 involved integrating NDID into delivery of additional services and linking the NDID and CR systems. By January 2020, GoS had recruited consultants for the component and requested the Bank to increase the allocation for technical assistance. The Project was then restructured for the second time in January 2020, in which SDR 346,377 was reallocated between disbursement categories for this purpose. The scope of Component 4 was reduced in the last restructuring in October 2022 with the aim to complete activities and contracts underway by December 31, 2022. Consequently, the restructuring cancelled Phases 2 through 4. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) Revised PDOs and Outcome Targets Page 11 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) 18. Four Level 2 restructurings took place in August 2019, January 2020, June 2020, and October 2022. The first restructuring added a new Component 4 on digital government, including digital identification. The restructuring also added a new objective in the PDO. The first and last restructurings changed the Results Framework (RF). The revised PDO, as reflected in the Amendment to the Financing Agreement (FA) of August 2019 was: (a) to reduce the cost and increase the availability of internet services; and (b) to facilitate the development of initial foundations for digital government, including digital identification (ID). The Project closing date was extended for 23 months from July 31, 2020, to June 30, 2022, in the first restructuring. The closing date was then extended by another six months to December 31, 2022, with the last restructuring. As the second extension would have extended the Project closing date cumulatively for more than 24 months, it required the EAP Regional Vice President’s approval. The ICR Data Sheet (see Restructuring and/or Additional Financing) omits information on the second extension due to an error in the World Bank’s Operations Portal system. The data sheet also indicates that a revision in “Change in Loan Closing Date(s)” occurred in June 2020. This information refers to the extension of the closing date (from July 31, 2020, to June 30, 2022) 22 of the DFAT grant funded by the Australia-Pacific Islands Partnership Trust Fund. 23 Revised PDO Indicators 19. The first restructuring added four new PDO-level indicators to reflect the activities in the new Component 4 (See Annex 7.4). In the last restructuring, all newly added PDO-level indicators were dropped, and a new indicator (NDID institutionalized) was added. The first and last restructurings added and deleted intermediate results indicators. The unit to measure internet pricing for two PDO-level indicators, “Retail price of internet services ($/Mbps)-including sub- indicators for business and residential prices” was changed from speed (Mbps) to data volume (gigabytes or GB) to reflect the change in technology and market demands 24 that impacted internet pricing structures. This ICR notes that the change in the units of these indicators limits accurate comparison of retail prices before and after the change. Revised Components 20. See Components on the addition of Component 4 with August 2019 restructuring. Other Changes 21. Legal covenants. The FA had six legal covenants 25 at appraisal. In December 2016, a legal covenant under the Financing Agreement Schedule II, Section IV.B.I.(b)(iv)(E) stating that no withdrawal shall be made until SSCC has “provided all necessary financing required on its part for purposes of financing Part 1(c) of the Project” was waived. 26 The first restructuring added two new legal covenants associated with Component 4. One of the new legal covenants required 22 See Restructuring Paper RES41155 23 APIA TF is a programmatic, multi-sector Single-Donor Trust Fund established in December 2015 to support WB programs across the 12 Pacific Island countries including Samoa. 24 Performance of fixed internet is often measured in speed whereas that for mobile internet is measured in data volume. The change in indicators reflected changing consumer preference for mobile over fixed broadband. 25 Two notable covenants required the operationalization of the SSCC pursuant to public private partnership arrangements, including independent appraisal of the proposed structure of the SSCC and for the GoS to issue a binding offer to sell shares in, or otherwise provide for private sector. involvement in the financing of SSCC, all in an amount and in a manner satisfactory to the Association. The Bank advised GoS that a disposal of 50 percent of the shares was a minimum level to meet the satisfactory requirement. 26 The covenant required SSCC to deposit the full amount of its contribution to the Project whereas it was able to do so only in tranches. The request for a waiver was approved on the basis that the full amount would be deposited in accordance with SSCC’s Equity Subscription Agreement, or on some other basis. Page 12 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) GoS to provide evidence that is satisfactory to the World Bank that it “has enacted and given effect to laws and associated regulations that are consistent with the Principles on Identification for Sustainable Development.” 27 22. Ineligible expenditures and cancellations. A Financial Management (FM) mission in 2020 discovered that withdrawal applications included payments of invoices plus value added goods and services tax. GoS was recommended to refund to the World Bank $53,525 paid to consultancies as value added goods and services tax is not paid with Project funds. The due date for the refund was March 31, 2023, and this request was satisfied. A total of SDR 1,806,123 was cancelled from the original allocations of the $16 million IDA grant IDA D0630 reflecting the reduced scope of Component 4 (see Revised Components). Rationale for Changes and Their Implication on the Original Theory of Change 23. The 2019 restructuring added a new set of activities, outputs, and outcomes to the TOC. By February 2018, the Samoa-Fiji submarine cable, Tui Samoa, had been installed and was RFS, two and a half years before the scheduled closing date, and achieved 8.8 percent in savings ($4.392 million IDA funds) from the total project cost. As a result, GoS presented a case in line with priorities of the government to use the savings to expedite the digitalization of service delivery by setting up the foundations of digital government, including digital ID. II. OUTCOME A. RELEVANCE OF PDOs 24. Relevance of PDOs measures the extent to which the operation’s development objectives are consistent with the Bank’s Country Partnership Framework and/or Country Partnership Strategy at Project closing. The World Bank and the Pacific Regional Partnership Framework (WB-RPF) 28 was extended to FY23 through the Performance and Learning Review (PLR) which covered Samoa. 29 A regional Systematic Country Diagnostic 30 was prepared in 2023 with a new priority which was fully aligned with the outcomes envisioned by the Project: “to improve digital connectivity and services in private and public sectors”. The Project addressed the following key priorities of Samoa, outlined in the WB-RPF: • Focus Area 1: Fully exploiting available economic opportunities. 27 See Independent State of Samoa: Samoa Connectivity Project (Grant Number D063-WS) Amendment to Financing Agreement 8.1.(b)(vi)(c). Link is in Annex 6. The 10 Principles on Identification for Development have been endorsed by 24 international and regional organizations, including the World Bank Group, the Asian Development Bank, and seven United Nations agencies. They are available at: http://id4d.worldbank.org/principlesA second additional covenant was: Under FA Schedule II, Section I.A.2, GoS was to establish by no later than October 31, 2019, and maintain until the closing date, the NDID Steering Committee. 28 IBRD/IDA/IFC/MIGA Regional Partnership Framework for Kiribati, Nauru, the Republic of Marshall Islands, Federated States of Micronesia, Palau, Independent State of Samoa, Kingdom of Tonga, Tuvalu, and Vanuatu for the period FY17–FY21 (Report No. 120479 – EAP). http://documents.worldbank.org/curated/en/137341508303097110/Pacific-Islands-Regional-partnership-framework-FY17-FY21 29 Nine Pacific Island Countries (PIC9) Regional Partnership Framework Performance and Learning Review for the period FY2017–2021 (Report Number: 145750-EAP, presented to the Board on February 6, 2020). http://documents.worldbank.org/curated/en/302731583719311381/Nine-Pacific-Island-Countries-PIC9-Kiribati-Nauru-Marshall- Islands-Federated-States-of-Micronesia-Palau-Samoa-Tonga-Tuvalu-and-Vanuatu-Performance-and-Learning-Review-for-the-Period- FY2017-2021 30 World Bank.2023. Pacific Islands - Systematic Country Diagnostic Update: Growth and Resilience. Washington, D.C.: World Bank Group. (Board Doc. No.: SecM2023-0079,IDA/SecM2023-0064,IFC/SecM2023-0075,MIGA/SecM2023-0036; disclosed on March 27, 2023). https://documentsinternal.worldbank.org/search/34029025 Page 13 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) • Focus Area 2: Enhancing access to employment opportunities. • Focus Area 3: Protecting incomes and livelihoods, by laying the foundation of digital infrastructure that can help implement comprehensive mitigation efforts in addressing natural disasters, climate change and adaption and collaborate service delivery. • Focus Area 4: Strengthening the enablers of growth and opportunities, through infrastructure. 25. The Bank’s support was highly responsive to the changing priorities of GoS in establishing NDID by adding a new component and changing the PDO through a formal restructuring. At closing, the contributions of the Project remained highly relevant to Samoa’s plans to “explore progressive innovative solutions to broadening of technology use, including the development of digital ID,” as articulated in the “Pathway for the Development of Samoa FY2021/22 to FY2025/26.” 31 Furthermore, Tui Samoa allowed onward connection to Wallis and Futuna, 32 contributing to the regional goal of connecting Pacific islands closer to global markets. The objectives of the Project remain highly relevant to the development objectives of Samoa and the Pacific region. Assessment of Relevance of PDOs and Rating 26. The Project is fully aligned with the WB-RPF, Performance and Learning Reviews, and Systemic Country Diagnostic that covered Samoa and its strategy covering FY2021/22 to FY2025/26. The Project was also highly responsive to the changing priorities of GoS. Therefore, relevance of PDO is High. B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome 27. While there was a revision to the PDO at the first restructuring in 2019, no split rating assessment was followed as changes to the PDO represented an expansion in project scope. Efficacy measures the extent to which the operation’s objectives were achieved indicated in Key Expected Outcomes and Outcome Indicators. Objective 1: Reduced Cost of Internet Services 28. As conjectured at appraisal, high data capacity from Tui Samoa spurred competition downstream, with operators extending coverage and capacity of their networks. The drop in prices of internet services for individuals and businesses exceeded targets and consumers benefited the most. The retail price of internet services for subscribers in 2022 is 3.6 percent of the value in 2019 33 and 19.3 percent for businesses (Figure 2). The fall in the price of wholesale internet bandwidth, from $1,500 per Mbps per month in 2015 to $72 per Gbps per month (4.8 percent of the original price) in 2022 is also notable. However, there was further scope to reduce prices and improve the quality of service (QoS) and availability of internet (See Annex 7.5). Furthermore, the regulator’s capacity to address these issues was critically affected when a fire burned its office building. In April 2020 the OoTR building burned and caused serious damage to valuable resources and equipment financed through the Project and hampered critical functions of the Regulator supported in Component 2. The assets, such as computers, spectrum monitoring tools, and data, which were critical to the functions of the Regulator, were not fully covered by insurance. The Bank declined to 31 Ministry of Finance. 2021. “Pathway for the Development of Samoa FY2021/22-FY2025/26”. Retrieved from: https://www.mof.gov.ws/wp- content/uploads/2022/03/MOF_PATHWAY-DEVELOPMENT-SAMOA.pdf 32 The next phase in the Pacific connectivity program (3B) supported Fiji that was financed by the French government and SSCC. 33 This ICR notes that the baseline for these indicators starts from 2019 due to changes in the measurement unit described in Revised PDO Indicators. Page 14 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) refinance these assets for which insurance should have been secured as per its procurement policy, and ultimately OoTR repurchased replacements through savings from financing from other cofinanciers and funds from MoF. OoTR tried to recover data from damaged disc drives with the National Audit Office, but not all digital assets could be fully recovered. However, after the Project closing, OoTR had set up a toll-free line for citizens to file complaints on internet-related issues to be able to address the issues, and most of the complaints were associated with cost and QoS. The achievement of this objective is rated High owing to the significant drop in the cost of international bandwidth and retail prices of the internet, exceeding targets. Figure 2. Retail Price of Internet Services for Subscribers and Businesses, 2019 and 2022 Q2 2019 Q4 2022 90 80 80 70 60 50 40 30 20 16 15.4 10 0.58 0 Retail price of internet services (lowest Retail price of internet services-business published price 2GB data volume) (lowest published price 50GB data volume) Objective 2: Availability of Internet Services 29. The Project met and/or exceeded most of the targets under this objective and met the target of more than half of Samoans (55 out of 100 people) having access to 3G and 4G subscriptions. The ICR notes that while the Project measured the outcomes at the retail level, apart from providing capacity support for the regulator through Component 2, the Project did not have specific activities directed to expanding mobile services. Even before Tui Samoa’s RFS, the intense competition between Digicel and Bluesky lowered prices of internet services, which enabled more people to come online. According to GSMA, by Q1 2018, around 52 percent 34 of Samoans were online. See M&E Design. The Project exceeded all other targets under this objective. Available international bandwidth increased from 250Mbps to 14,000 Mbps (a nearly 56-fold increase) over the Project’s duration (2015-2022), enabling monthly data download volume to expand by roughly 25 times, from 650 Terabytes to 16,000 TB in the same period. The monthly peak data rate increased astronomically from 4Mbps to 10,800Mbps 35 from 2019 to 2022. This increase can be partly attributed to Tui Samoa’s fiber-optic technology, ongoing investments by telecom operators to enhance the broadband network infrastructure and increased data demand resulting from COVID-19 lockdowns. It might have 34GSMA Intelligence. “Unique mobile subscribers” for Q1 2018 divided by the total population. Unique mobile subscribers is an estimate of “total unique users who have subscribed to mobile services at the end of the period, excluding machine-2-machine (M2M). Subscribers differ from connections such that a unique user can have multiple connections.” 35 Measured as of November 2022. Page 15 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) been challenging for the task team to foresee the growth in monthly peak data rate during appraisal due to digital’s rapid growth and transformational impact globally, the impact on data demand from COVID-19 lockdowns and subsequent ripple effects on private sector investments. At project closing, 98 percent of the population in Samoa was within 4G coverage 36. However, there were still gaps in access to internet services, especially in rural households, and in QoS. See Annex 7.6. Efficacy under this objective is rated High. Objective 3: Development of Digital Identification and Foundations of Digital Government 30. While all PDO-level indicators and intermediate results indicators after October 2022 were satisfied, the Project barely achieved its initial goal of covering Phases 1 through 4 of Component 4 due to several delays (see Key Factors During Implementation). The PDO was unclear in terms of the definition of ‘initial foundations for digital government.’ Moreover, an options paper on a Samoa Digital Government Platform was produced as a deliverable in Phase 1, in anticipation of a new standalone Digital Transformation Authority and potentially a new Bank-financed operation. However, the ICR mission confirmed that the paper did not receive consideration due to changes in the administration and government priorities. The operation barely achieved this objective. Rating is Negligible. Justification of Overall Efficacy Rating 31. The 2019 Amendment to the Financing Agreement does not indicate a relative importance of the three objectives within the PDO. The operation fully achieved objectives 1 and 2 but barely achieved objective 3. Given the initial concept of the Project that focused on Objectives 1 and 2, this ICR emphasized the outcomes of these objectives. Hence, the operation almost fully achieved its objectives and efficacy is rated Substantial. C. EFFICIENCY 32. Efficiency measures how economically resources and inputs were converted to results and was measured for the entire project at closing. The Project was carried out with administrative efficiency: 33. Around 20 months elapsed from the Project Concept Note to Board Approval at a cost of $308,887.91 (around 40 percent of the total cost of supervision) at 34 staff-weeks, modest in terms of cost and staff-weeks compared to the first phase of the connectivity program (46 staff weeks at a cost of $958,718.66, around 1.7 times the cost of supervision). • Component 1, which accounted for over 90 percent of total project financing, fully achieved and/or exceeded its targets, saved 8.8 percent of total project cost ($4.392 million IDA funds), and was completed two and a half years ahead of schedule. • Component 3 pooled-in resources from another project, namely the Centralized Technical Services Support Unit (CTSSU). Established as part of the Bank’s transport project in Samoa in 2018,37 CTSSU was housed under MoF and provided high-level guidance and hands-on support on project implementation for all Bank projects in Samoa in the areas of procurement, financial management, and safeguards. 34. There were a few shortcomings that affected administrative efficiency. 36 From discussions with telecom operators during the ICR mission. 37 Samoa Climate Resilient Transport Project (P165782). See https://projects.worldbank.org/en/projects-operations/project-detail/P165782 Page 16 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) • Frequent staff turnover at OoTR led to lost productivity, loss of valuable knowledge and experience, and increased training costs for Component 2. • By October 2021, Component 4 was one year behind schedule. 38 The Bank rightly responded with an increase in supervision costs, 39 but it was insufficient to ensure timely delivery of this Component due to a multitude of factors (see Key Factors During Implementation). 35. At appraisal, the net present value (NPV) of Tui Samoa was calculated at $3.8 million (including all Bank, DFAT grants and ADB cofinancing) and the net economic impact of the Project was $201 million with an economic rate of return (ERR) of 33 percent. The Project was considered cost-effective as the benefits of the financing of Tui Samoa were expected to be reaped for the next 25 years at a 10 percent discount rate. The financial and economic analysis could not be repeated for the ICR report due to lack of data supplied by the borrower and lack of documentation of the task team on the original modeling analysis. 36. The economic analysis (Annex 4) used in this ICR estimated the maximum economic impact of Tui Samoa on GDP growth to be around 3.86 percent between 2015 and 2022. The aggregate consumer surplus of mobile connectivity in Samoa during 2015-2022 was approximately $8,686. At the per capita level this estimation is small but signifies positive impacts on consumer welfare of the price reduction and increased availability of mobile connectivity enabled by the operation. Assessment of Efficiency and Rating 37. Efficiency is rated Substantial. At appraisal the Project was assessed to be economically viable. Although ex-post NPV and ERR was not carried out in the ICR, ex-post economic analysis found that the maximum economic impact of Tui Samoa on GDP growth could be up to 3.86 percent between 2015 and 2022. The aggregate end-user consumer surplus was positive, estimated at $8,686. Despite the 12-month delay in Component 4 by the end of FY21, the task team did its best to improve administrative efficiency of the Project. D. JUSTIFICATION OF OVERALL OUTCOME RATING 38. Overall outcome rating is Moderately Satisfactory. The Project’s relevance to WB-RPF, PLR and SCR as well as Samoa’s development priorities was high. Despite the shortcomings of the Project in establishing the initial foundations of digital government including digital ID, the Project achieved significant outcomes in the first two objectives (reduction in cost and increased availability of internet services), resulting in a Substantial efficacy. Efficiency was Substantial assessed by its NPV, ERR, potential economic impacts and administrative efficiency. E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender 39. The Project prioritized foundational aspects of digital infrastructure and NDID and did not include a gender- specific activity, although it collected gender-disaggregated data as part of the RF. Increased access to digital infrastructure and digital ID can be an enabler for economic empowerment for women which can help close the gender 38 ISR Seq. No.14 39 From FY21 the number of staff weeks increased from 7.6 to 19.6 and this level of supervision was maintained until Project closing. Page 17 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) gap. See Annex 7.7. The design of the NDID system in Component 4 also included considerations for enhancing the agency of women in Samoa. Institutional Strengthening 40. The ICR mission confirmed that the support provided by the World Bank was instrumental in strengthening institutional capacity across different implementation agencies, especially the OoTR. Despite the fire that damaged OoTR’s equipment, Component 2 financed upskilling of OoTR staff through training. 40 Component 2 also equipped OoTR with a regulatory business plan that identified technical, economic, and legal issues for OoTR, and capacity needs and resources over the next one to three years. The Project assisted OoTR to create cost models for telecom services. 41 These cost models offered OoTR valuable insights such as the identification of relevant market failure, customers that would benefit from regulatory intervention, and regulatory actions with the least burden to the market. Under Component 3, the Bank delivered workshops and training, along with support through implementation support missions and ad hoc assistance on expected fiduciary roles and responsibilities, use of procurement tools, financial and contract management, reporting, audit, and monitoring and evaluation. Another valuable aspect of capacity-building encompassed support from CTSSU specialists. Mobilizing Private Sector Financing 41. The PPP arrangement in Component 1 resulted in a 50:50 share of SSCC between three state-owned enterprises (Samoa National Provident Fund, Unit Trust of Samoa, Samoa Life Assurance Corporation), and three private sector internet service providers (Bluesky Samoa Ltd, Computer Services Ltd, and Digicel Samoa Ltd.) This design incentivized private financing and the Project mobilized US$8.1 million (16 percent of total project cost at appraisal) in private financing, exceeding the Intermediate Results Indicator “Private Capital Mobilized” 42 target of US$8 million. The amount is higher if accounting for downstream investments in telecom networks triggered by Tui Samoa (See Annex 7.8). Though, there may be perceived risk in the sustainability of private capital mobilization as GoS had in 2022 considered but did not nationalize SSCC. 43 40 On key topics such as anti-competitive behavior, price regulation, and universal service at formal institutions, participation in regional and international fora, and online skills courses. 41 For services including central broadcasting facility services, tower sharing and colocation services, broadband access services, submarine cable capacity and related services, and mobile networks costs and services. 42 This indicator tracked the amount of direct financing (in the form of equity and/or debt) mobilized by private entities, using private funding, to finance investments within or investments directly linked to the operation. 43 Qui, W. 2022. “Government Takes Ownership of the Samoa Subsea Cable.” January 20. https://subtelforum.com/government-takes- ownership-of-the-samoa-subsea-cable/ Page 18 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Poverty Reduction and Shared Prosperity 42. The Project did not explicitly measure its impact on poverty reduction and shared prosperity. However, studies evidence the impacts of internet connectivity on GDP growth, 44 jobs, 45 foreign direct investment, and trade, 46 which could have spillover effects across all income levels especially in lowering barriers to entry for micro, small and medium enterprises and businesses owned by underrepresented groups. 47 The founder of Makeki Online (Samoa’s largest online marketplace) interviewed during the ICR mission highlighted that the increased use of social media enabled by Tui Samoa facilitated expansion of its user base, allowing families in rural areas to sell local produce online to a wider market. Other Unintended Outcomes and Impacts 43. Impacts from COVID. Implementing agencies attributed achievements made during COVID-19 lockdowns to Tui Samoa. Without Tui Samoa, the extensive data consumption experienced during COVID-19 lockdowns in 2020 and 2022 (the monthly volume of data downloaded by all service providers jumped from 650TB in 2019 to 1,840TB in 2021) 48 would not have been possible. 44. The observation from the ICR mission was that the digital economy in Samoa was in an early stage of development. Yet, a fragmented innovation ecosystem and limited investments in key enablers of the digital economy such as digital payments and digital skills seemed to limit its growth. See Annex 7.9. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 45. The task team should be commended for the extensive preparation for Component 1 that accelerated its implementation. The task team took advantage of lessons learned and capacity garnered from previous projects carried out in the Pacific Regional Connectivity program. The task team incorporated into the design extensive ex-ante measures to ensure low prices and promote downstream competition through grant financing covenants (e.g., capped shareholder rate of return, reference interconnection offer, and nondiscriminatory open access obligations). 44 See Jorgenson D.W., Vu K.M. The ICT revolution, world economic growth, and policy issues. Telecommun. Pol. 2016;40(5):383–397. doi: 10.1016/j.telpol.2016.01.002; Niebel T. ICT and economic growth – comparing developing, emerging and developed countries. World Dev. 2018;104:197–211. doi: 10.1016/j.worlddev.2017.11.024; Romer P. Endogenous technological change. J. Polit. Econ. 1990;98(5):S71–S102. doi: 10.3386/w3210; Qiang, Christine Zhen-Wei, Carlo Rossotto, and Kaoru Kimura. 2009. “Economic Impacts of Broadband.” In Information and Communications for Development. Washington D.C.: World Bank; Czernich, Nina, Oliver Falck, Tobias Kretschmer, and Ludger Woessmann. 2009. Broadband Infrastructure and Economic Growth; Katz, Raul. 2009. “Estimating Broadband Demand and its economic impact in Latin America”. presented at the III Conference Acorn-Redecom, Mexico City, September 4; Zaballos, Antonio García, and Rubén López-Rivas. 2012. Socioeconomic Impact of Broadband in Latin American and Caribbean Countries. Inter-American Development Bank 45 Kelly, Tim, and Carlo Maria Rossotto, eds. 2012. Broadband Strategies Handbook. Washington DC: World Bank; Katz, Raul, Stephan Vaterlaus, Patrick Zenhäusern, and Stephan Suter. 2010. “The impact of broadband on jobs and the German economy.” Intereconomics: Review of European Economic Policy 45 (1): 26–34. 46 Latif, Zahid, Shahid Latif, Liu Ximei, Zulfiqar Hussain Pathan, Shafaq Salam, and Zeng Jianqiu. "The dynamics of ICT, foreign direct investment, globalization and economic growth: Panel estimation robust to heterogeneity and cross-sectional dependence." Telematics and Informatics 35, no. 2 (2018): 318-328. 47 Kathuria, Sanjay, Arti Grover, Viviana Maria Eugenia Perego, Aaditya Mattoo, and Pritam Banerjee. Unleashing e-commerce for South Asian integration. World Bank Publications, 2019. 48 ISR Seq. No. 13 Page 19 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) 46. The Project was in an advanced stage by the time of approval. The task team had had extensive discussions with GoS and industry stakeholders on the arrangements of SSCC and procurement arrangements before the concept note stage. Involving all stakeholders at an early start was beneficial as key stakeholders recognized and acted on the opportunity to expand the scope of Tui Samoa (adding spurs to Wallis and Futuna and Fiji’s Vanua Levu – financed outside the scope of the Project) that increased the traffic potential and the economic viability of Tui Samoa. Consequently, SSCC was established with a business license a month before the Project became effective (as per grant covenant and disbursement condition). A limited international bidding was used to accelerate the bidding process. A year into implementation, SSCC entered a contract with the successful bidder. 47. There were some shortcomings in the design of the Project: • Component 2 could have benefitted from additional supply-side regulatory mechanisms to increase investments in middle and last mile networks that would have addressed QoS or affordability issues raised by end-users. • The timeline for Component 4 was highly ambitious and did not have a buffer for potential delays involved in enacting a legislation 49 and/or other unforeseen events. The delays necessitated a restructuring of the project and only upstream work including expansive community consultations on the NDID bill and draft procurement documents for an NDID system could be completed by project closing. B. KEY FACTORS DURING IMPLEMENTATION Factors Outside the Control of the Government and/or Implementing Agencies 48. The Project was carried out efficiently and in a satisfactory manner until after the 2019 restructuring when a series of unforeseen incidents severely affected implementation (see below) and led to delays. These challenges led GoS to request the Bank to reduce the scope of Component 4 and extend the closing date. At the time of the August 2019 restructuring, the Bank team felt that activities planned in Component 4 could be satisfactorily implemented. However, the following unforeseen events were too disruptive: • The state of emergency declared between March 2020 and July 2022 due to the COVID-19 pandemic restricted travel and made it challenging for GoS to receive technical assistance remotely by advisors who could not travel to Samoa. Moreover, the advisors were in Europe and the time differences, with no overlap of business hours between Europe and Samoa, made constructive collaboration between the Government and advisors more difficult. • A three-month political stalemate that ensued from the 2021 election led to a hold in decision-making at GoS which made it difficult for the Project to advance the NDID bill. Even after the new administration took office it took several additional months for decisions to be made as changes were made at the higher echelons of the civil service. Changes in the Attorney General’s office also delayed decisions on the NDID bill. • The unfortunate passing of the Government Statistician and CEO of SBS (lead of the implementing agency) in November 2021 added further delays to finalizing the NDID bill. A new Government Statistician and CEO was not appointed until August 2022. 49. In addition, other factors impeded a swift progress of Component 4: 49 At the time of writing the ICR in August 2023, the NDID bill was awaiting a third and last reading before voting by members of the parliament. Page 20 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) • Due to the inability to travel and significant difference in time zones of the locations of technical and legal advisors, collaboration resorted to email conversations and sharing of documents. Documentation of the conversations between advisors and GoS and the involvement of the Bank in providing technical oversight could be improved. • The technical advisors had no prior experience with Samoa, and some of their recommendations required close oversight by the Bank team. There were disagreements between technical advisors and the WB which required further discussions. There were also disagreements between Technical and Legal advisors on substantive issues that also added to delays. 50. There were also salient issues that required more time for GoS and the Bank team to deliberate and negotiate on before the Project could be extended. For instance, GoS was considering the nationalization of SSCC which would have conflicted with the covenants of its Grant Agreement with the Bank and jeopardized any further extensions to the Project to conclude activities in Component 4. Following assessment that the NDID bill might take longer than a 12- month project extension period to pass Parliament, and upon GoS confirmation that it would not nationalize SSCC, the Bank supported the extension of the project with an earlier closing date to December 31, 2022, to complete ongoing upstream activities under Component 4. GoS requested new procurements for OoTR’s spectrum equipment which the Bank could not agree on as it would not have been possible to conclude all procurement activities by December 31, 2022. 51. The last restructuring (October 2022) followed a retroactive extension of the project closing date from June 30, 2022, to December 31, 2022. GoS shared a revised restructuring request in July 2022 for extension of the closing date by six months, a reduced scope of Component 4, and reallocation of funds between disbursement categories. The ISR from August 2022 downgraded the ratings of the Project from Satisfactory to Moderately Satisfactory and from Satisfactory to Moderately Unsatisfactory for the progress towards achievement of PDO and overall implementation progress, respectively. The downgraded ratings were to reflect delays in Component 4 to date. Factors Within the Control of the Government and/or Implementing Agencies 52. Mobilization of capacity through central support units, such as CTSSU, that provide hands-on support for implementing agencies and PMU staff for all Bank-financed projects proved to be highly effective. During the Project, CTSSU shared the same building as MoF, and the Project gained significantly by having locally-based personnel and on- the-ground support for procurement and financial management. 53. The participatory citizen engagement approach in Component 4 during which every village provided feedback on the NDID bill was the first successful community consultation in the country of this scope. The Project leveraged the existing social system in Samoa, namely the matai (chief), to streamline the consultation process. Initially the PMU had consultations on the NDID bill only with the village majors and Sui o Tamaitais (representatives of village women’s committees) and they would relay the information and collect feedback from the rest of the villagers. However, the village majors and Sui o Tamaitais expressed the challenges for them to relay the information to the rest of the villagers due to the highly technical nature of the bill. Hence, the PMU changed the format of the consultations to one in which all residents in each village were heard from directly. 54. The initial project risk assessment did not account for whether insurance of Bank-financed assets would have been sufficient and comprehensive in the event of a hazard and offer complete coverage for any potential damage. The damage Page 21 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) to OoTR’s equipment and data assets caused by the fire hampered the critical functions of a regulator and diminished its ability to contribute to the PDO. Page 22 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 55. The RF could have benefitted from fewer indicators, and a better selection of indicators. • At appraisal, there were 14 PDO-level indicators and two intermediate results indicators. At the time of closing the Project had 12 PDO-level indicators and 10 intermediate results indicators. • Certain indicators, such as “the number of grievances registered”, “Impact on telecom sector of World Bank Technical Assistance” and perception-based indicators such as the “number of beneficiaries that felt the project investment reflected their needs” did not align with the activities of the Project and the expected outputs and outcomes of the Project as captured in the TOC. Indicators such as “Access to Internet Services” and “Retail price of internet services” are measured at the retail level and may not be appropriate to measure the direct impacts of (or attribute the outcomes wholly to) Tui Samoa. • Indicators measuring availability and affordability (e.g., by income group or region), or QoS could have been more instrumental in understanding the tangible impacts of the internet especially in rural areas and for low- income families. The RF could have also documented policy/regulatory milestones as intermediate results indicators that addressed the recurring complaints on affordability and QoS from consumers. • The task team revised technology-related indicators as needed (see Revised PDO Indicators); however, this made it challenging to compare the cost of internet before and after the Project. M&E Implementation 56. During implementation MoF did not hire an M&E specialist and OoTR did not implement a formal M&E process, despite the agreement at appraisal.50 While SSCC and telecommunications service providers supplied data to OoTR, this was only done during supervision missions when requested by the task team. Therefore, any monitoring and updates to the RF were carried out by the task team. Monitoring and Evaluation and Use 57. There was limited use of RF indicators outside of the Project as there were no formal M&E processes within implementing agencies. An Implementation Status & Results Report (ISR) filed in October 2021 documented that the Bank had proposed to OoTR to establish a sectoral M&E process that could evidence sectoral performance to inform government policy for the ICT sector. The World Bank’s documentation on M&E indicators could have been better. Additional intermediate results indicators under Component 3 were added in ISR Seq. No. 8, with an indication that the new indicators will be discussed in the August 2019 restructuring paper. However, the restructuring paper omitted the discussion of new indicators under Component 3. Also, ISRs do not indicate the unit of measurement for the intermediate results indicator “National Installed Data Capacity” and the task team did not correct the error in its target value until the 17th ISR. For the ICR, the task team confirmed that the unit of measurement of National Installed Data Capacity is Mbps. 50 At appraisal, it was decided that MoF would carry out M&E responsibilities by hiring an M&E specialist while core data collection and analysis Page 23 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Justification of Overall Rating of Quality of M&E 58. M&E quality is rated Negligible, given the significant shortcoming in M&E implementation and use. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE 59. Environmental and Social Safeguards Compliance. ISRs rated Overall Safeguard Compliance over the lifetime of the Project as Satisfactory. See Annex 7.10. 60. Financial Management (FM). The ISR rated FM as Moderately Unsatisfactory, Moderately Satisfactory, and Satisfactory on 6, 51 7, 52 and 4 53 out of 17 ratings, respectively. FM ratings were downgraded to Moderately Unsatisfactory due to poor contract management, lack of effective controls over monitoring of contracts’ unpaid balances, issues with timely and accurate submission of interim financial reports and late submission of quarterly withdrawal applications for the designated account, and late submissions of the SSCC audits. Except for the financial year ending 30 June 2016, all audited financial statements had been submitted by MoF with audits performed by the Office of the Auditor-General. In July 2023 the Bank requested the GoS to confirm additional information on the October-December 2022 IFR and to submit an updated IFR for the Bank’s clearance. The current designated account balance of $473,159 shall be documented by MoF. As of September 2023, the Bank reviewed the documents supporting the final withdrawal application that were due by 30 April 2023 (four months after the project’s closing date). The final balance in the designated account after processing the final withdrawal application will need to be refunded to the Bank. The final project audit will be for the year ending June 30, 2023, and will be due on December 31, 2023. 61. Procurement. Trainings to PMU staff and ongoing support in using the Systematic Tracking of Exchanges in Procurement (STEP) system were provided to address frequent delays in submission of procurement plans. The rating for procurement was downgraded four times over the course of the project period from Satisfactory to Moderately Satisfactory due to delays in recruitment of a project manager within MoF to oversee project implementation within three months after the effectiveness date as per legal covenant. 54 In December 2017, a series of Change Orders had been processed for Component 1. As these changes had not been notified to the World Bank and ADB for technical concurrence and no objection, this resulted in a direct liability to the GoS, and the Procurement rating was dropped from Moderately Satisfactory to Moderately Unsatisfactory. 55 On two other occasions the rating was dropped from Moderately Satisfactory to Moderately Unsatisfactory due to delays in procurement by OoTR for Component 2, 56 and issues in accurately reflecting the implementation status of the approved procurement activities within STEP. 57 62. Grievance Redress Mechanism (GRM). The Ministry of Natural Resources and Environment (MNRE) provided open access for members of the public who wished to lodge a complaint or issue. The Project Team was in regular contact with MNRE for updates on any issues raised and no substantive complaints (See Annex 7.10.) were reported. The team remained in touch with the ADB safeguards specialists during implementation of Component 1. Component 2 continued would be undertaken by the OoTR through a formal M&E process. It was agreed that SSCC and other telecommunications service providers would participate in this formal M&E process and supply the data to OoTR on a routine basis. 51 FM was rated MU in ISR Seq. No. 8, 9, 10, 11, 12, 13. 52 FM was rated MS in ISR Seq. No. 5, 6, 7, 14, 15, 16, 17. 53 FM was rated S in ISR Seq. No.1, 2, 3, 4. 54 ISR Seq. No. 3 55 ISR Seq. No. 6 56 ISR Seq. No. 8 57 ISR Seq. No. 14 Page 24 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) its focus on assistance and support to the ICT Regulator and due to the nature of activities did not attract any grievance issues. C. BANK PERFORMANCE Quality at Entry 63. The Bank team made a prudent decision to embark on an SOP using a multidonor strategy. The operation was highly relevant to the regional and national policies and plans. By appraisal the Bank team had amassed extensive technical and regional knowledge and operational skills. This, along a simple project design (before adding Component 4) helped the Bank team implement Components 1 through 3 with a shorter preparation and implementation times. The Bank team tactically established a memorandum of understanding with ADB for an effective institutional coordination. The Project had a few shortcomings at entry. The Bank team could have better documented the original financial and economic analyses that could have helped re-estimate the Project’s NPV and internal rate of return during the ICR stage. Institutionalizing M&E mechanisms in each of the implementing agencies, especially OoTR, could have helped streamline reporting requirements during implementation. The Project was classified as Environmental Category B. See Annex 7.10. for safeguard policies triggered. Quality of Supervision 64. Overall, the Bank’s implementation support was adequate. A total of 17 ISRs reported progress and key challenges in project implementation. FM supervision took place every six months based on the fiduciary risk rating. A joint review mission with ADB was conducted from August 20 to 24, 2018 for the Mid-term Review. Aide-memoires, back-to-office reports, and other key data on the Project were shared by ADB to ensure the Project remained in compliance with World Bank safeguards requirements. The supervision arrangement with ADB was highly beneficial to GoS as it streamlined any reporting/compliance requirements. Aide-memoires highlighted project status, project progress since last mission, and key issues that required action from the implementing agencies or further support from the Bank team. Every aide memoire had an annex on sectoral analysis that closely monitored the developments in the telecoms sector. When Component 1 incurred cost savings the Bank proactively led constructive discussions with GoS on their use. Though the Bank team remained responsive to the priorities of GoS, adding Component 4 introduced additional complexity to the Project. 65. The two-year timeline that was planned for Component 4 was highly ambitious but considered achievable at the time of restructuring in August 2019, before a series of unforeseen events, including the COVID-19 pandemic, contributed to significant delays. ISR Seq. No. 12 indicates that the Bank team advised GoS that GoS could initiate the procurement process for the NDID system solutions provider before the disbursement condition was met (i.e. in parallel to the legislative process). However, GoS decided against this as the contracts could only be signed after the condition had been met (and a liability for GoS). By October 2021, Component 4 was delayed by 12 months. 66. There was only one change in the task team leader throughout the Project and in May 2022 after the conclusion of most key activities of the Project. Delays in obtaining GoS confirmation on its plans vis-a-vis the ownership structure of SSCC, and further requisite dialogue with GoS to confirm its requested reduced scope for Component 4 preceded World Bank consideration and subsequent approval of a retroactive extension for the project for six months to December 31, 2022. During the ICR mission, implementing agencies and the PMU expressed appreciation for the Bank’s continuous support and advice through implementation support missions and regular meetings. Page 25 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Justification of Overall Rating of Bank Performance 67. The overall Bank performance rating is Satisfactory. The rating reflects on the relevance of the operation, strategic approach in using an SOP, effective engagement with other stakeholders and efforts made during implementation to prioritize the needs of GoS in using cost savings of Component 1. The rating also considers the shortcomings at entry and supervision. D. RISK TO DEVELOPMENT OUTCOME 68. Risk to development outcome is Moderate. There is a small likelihood of changes to the cost of internet services or their availability. The risk is more significant in the operationalization of NDID. • Cost of internet services. Various factors related to a submarine cable system can affect the cost of internet services that could impact end-users. Increased competition from new satellite technologies or additional cables connecting through Samoa can lower prices. 58 More importantly, there is scope for the regulator to further reduce prices of international bandwidth. SSCC is a member of the South Pacific Marine Maintenance Agreement which is an insurance scheme to fund the costs of an outage or cable break. It is unlikely that unforeseen damages to Tui Samoa may increase costs of internet. Overall, there is minimal risk in changes to any of these factors associated with Tui Samoa that would increase the cost of internet services. • Availability of internet services. There is moderate risk in the availability of internet services due to Samoa’s vulnerability to natural disasters. Samoa is at high risk of tropical cyclones, tsunamis, and to some extent, earthquakes, that could compromise the physical security of submarine cables and land facilities. Unintentional man-made physical damages (e.g., fishing, anchoring) are more common. Submarine cables, like other digital infrastructure, are vulnerable to cyber-attacks. 59 However, GoS’s increased efforts on strengthening Samoa’s cybersecurity and two other submarine cables also operating in Samoa instill resilience in the network and lower the likelihood of this risk materializing. • Development of foundation of digital government including digital ID. The NDID legislation is a first step in a long-term investment in integrated IT systems. Although the Project has fulfilled the outcomes envisioned in the PDO, there is a substantial risk in the operationalization of the NDID system from political, governance and institutional capacity perspectives. While the government’s commitment in the establishment of the NDID has been reflected in detail in the ICT Sector Plan 2023-2027 and the Digital Transformation Strategy, the uncertainty in implementation arrangements (e.g., budget, capacity) could delay the positive welfare effects of a national digital ID scheme on Samoan citizens and residents. V. LESSONS AND RECOMMENDATIONS 69. This Project distills several lessons learned and opportunities for small island developing states or countries with small economies characterized by remoteness. The Project evidenced that robust digital infrastructure could encourage the adoption of digital technologies and development of new sectors (see Other Unintended Outcomes and Impacts), 58 At the time of the ICR-writing Samoa was connected to two new cables (Hawaiki and Manatua cables), which further decreased the cost of international bandwidth. 59 These attacks can alter the confidentiality, integrity, and availability of data passing through Tui Samoa. This could result in disruption in economic activities, distortion of citizens’ trust in information flows, and erosion of privacy as well as national security. Page 26 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) allowing countries to diversify economies, boost GDP growth, enhance access to information and services, and improve the standard of living of Samoan people. 70. An SOP can be an efficient and effective approach to carrying out projects in a region. The approach enabled the Bank team to align the Project to a long-term goal of the region and build partnerships with regional key stakeholders such as DFAT and ADB. Tui Samoa afforded international connectivity to Wallis and Futuna, enhancing the supply of a regional public good. It can be argued that the SOP approach contributed to the cost savings in Component 1. For example, during preparation, the Bank team updated the financial, economic and technical analysis carried out by Polyconseil in 2009, which helped cut down preparation cost and time. Though the initial preparation of an SOP may be high (preparation for the Fiji-Tonga connectivity project was more than 3 times the cost for Samoa), the approach can drastically cut down the cost for follow-on projects and produce cumulative impacts in the region. The Bank team also understood from experience the potential risks of collaborating with the private sector and used grant covenants and disbursement conditions to ensure open access and nondiscriminatory pricing of the new international bandwidth. Given the success of Component 1, the SOP approach and the lessons learned from its Pacific operations should be considered for replication and scale-up in other regions. 71. Risk assessment should include resilience considerations. One lesson from the fire in the OoTR building is that the risk assessments should also include insurance coverage. This is important especially for digital infrastructure that is costly and serves a critical function. 72. Support from CTSSU specialists was especially helpful in accurately reflecting actual implementation status of approved procurement activities in the STEP system. For certain functions within the responsibility of the PMU or the implementing agencies where capacity is limited, mobilizing resources from all Bank-financed projects in the country or the region could be a cost-effective solution. 73. Underestimating the time and preparation it requires to enact legislation can result in project delays. One recommendation is to sequence legislative work to occur as upstream as possible (e.g., via project preparation advances) to avoid any delays in the next set of activities that are linked to the passage of the bill. It is essential for task teams to understand that enacting a bill is a complex and multi-stakeholder process, one which requires sufficient time for stakeholder consultations and comprehensive reviews. Especially on a pivotal bill such as the NDID bill that has far- reaching consequences on data protection, privacy, and inclusion, it is imperative to allocate additional time for thorough deliberation and the democratic process for diverse perspectives to be heard and incorporated into the drafting of the bill. 74. As stated, sufficient time should be allocated for the preparation and implementation of community consultations involving digital ID such that the process, which is essential, does not cause delays to a project. This approach can be instrumental in managing the public’s concerns in data protection, privacy, and inclusion, and should be included in any project involving digital ID. The NDID bill was presented to every village in the country and comments from the consultations were reflected in the bill. In this Project, consultations not only elevated citizens’ awareness of the benefits of a digital ID system, but also provided avenues for citizens to voice concerns and collectively find solutions for remedy. Enhanced citizen awareness would also help streamline future ID-related interventions in the country. The Bank team also leveraged the existing social governance structure (e.g. matai, Sui O Tamaitais) to streamline the consultation process, which could have posed delays to the Project. Community consultations on technical topics such as an NDID system should be carefully planned and presented in a manner that is accessible to the audience. For instance, the village majors and Sui o Tamaitais in villages could not relay the information on the NDID bill, prompting the PMU to invite everyone from the village to the consultation process. Page 27 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) 75. Synchronizing the technical designs and the legal framework for a national digital ID is important to reduce delays and inefficiencies. This requires effective collaboration between technical experts and legal advisors. Projects should also ensure that technical and legal advisors for such a system have sufficient country knowledge to understand the social, cultural, and political contexts that can influence the effectiveness of the solutions tailored to the country context. The Project also evidenced that aligning working hours between the borrower and external advisors (when frequent in-person missions are difficult to organize) can optimize efficiency during implementation. 76. M&E indicators for first-mile connectivity can be standardized within the World Bank unit to ensure outcomes that are wholly attributable to project activities. RF indicators that measure retail level outcomes (e.g., the number of people accessing the internet, price of internet for individuals/businesses) complicate the task of attributing project activities to the results of these indicators. Standardized indicators for submarine cable financing could simplify the monitoring process for all projects related to submarine cable financing and facilitate the comparison of economic benefits. 77. Standardizing cofinancing arrangements with other multilateral development banks could streamline collaboration and enhance efficiency of the project and possibly all projects under an SOP. The Bank’s Memorandum of Understanding with ADB yielded a platform that streamlined implementation arrangements and was appropriate to the capacity of Samoa in areas of compliance with safeguards or procurement. This ensured that the borrower was not overburdened with adherence to disparate policies. Such agreements could also strengthen the Bank’s. engagements with financing/donor institutions and accelerate the implementation of projects under an SOP. . Page 28 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Impact on Telecom Sector of WB Technical Assistance Composite score:1- low impact to 5-high impact) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Impact on Telecom sector of Number 1.00 5.00 5.00 World Bank TA to OOTR (composite score: 1- low 19-Jun-2015 19-Jun-2015 22-Dec-2022 impact to 5-high impact) Comments (achievements against targets): The Project achieved this target. Objective/Outcome: Users of Mobile Internet Services (number of unique subscribers per 100 people) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Access to Internet Services Number 27.00 55.00 55.00 (number of subscribers per 100 people) 19-Jun-2015 19-Jun-2015 22-Dec-2022 Page 29 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Comments (achievements against targets): Project achieved this target. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Retail price of internet Amount(USD) 43.00 19.00 5.00 0.58 services (lowest published price 2Gb data volume) 19-Jun-2015 31-Jul-2020 31-Dec-2022 22-Dec-2022 Comments (achievements against targets): The unit of the retail price of internet services-business was changed from US$ per Mbit/s per Month to data volume (GB) in August 2019. The baseline and target before the revision were US$43/Mbit/month and US$19/Mbit/month, respectively. After the revision, the baseline and target were US$16/2GB and US$5/2GB, respectively. Project exceeded the formally revised target of US$5 /2GB. Actual achieved retail price is under 12 percent of the revised target. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Retail price of internet Amount(USD) 630.00 100.00 30.00 15.40 services-business (lowest published price 50Gb data 19-Jun-2015 31-Jul-2020 31-Dec-2022 22-Dec-2022 volume) Comments (achievements against targets): Page 30 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) The unit of the retail price of internet services-business was changed from US$ per Mbit/s per Month to data volume (GB) in August 2019. The baseline and target before revision were US$630/Mbit/month and US$100/Mbit/month, respectively. After the revision, the baseline and target were US$80/50GB and US$30/50GB, respectively. Project exceeded the formally revised target of US$30/50GB. Actual achieved retail price is 51.3 percent of the revised target. Objective/Outcome: Direct Project Beneficiaries Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Direct Project beneficiaries. Number 0.00 96,000.00 110,500.00 19-Jun-2015 19-Jun-2015 22-Dec-2022 Comments (achievements against targets): Project exceeded this target of 96,000 direct project beneficiaries by 15 percent. Direct Project beneficiaries are the population of unique subscribers of mobile or landline services. Data was from telecom operators gathered by the task team and confirmed by the regulator. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Project beneficiaries (female) Number 0.00 48,000.00 60,000.00 19-Jun-2015 19-Jun-2015 30-Jun-2022 Comments (achievements against targets): Project exceeded this target of 48,000 project beneficiaries (female) by 25 percent. Page 31 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Objective/Outcome: Grievances registered related to delivery of project benefits addressed. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Grievances registered related Percentage 0.00 80.00 100.00 to delivery of project benefits addressed. 19-Jun-2015 19-Jun-2015 22-Dec-2022 Comments (achievements against targets): Project exceeded this target of 80 percent by 25 percent. Objective/Outcome: Beneficiaries that feel project investment reflected their needs - female. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Beneficiaries that feel project Number 0.00 36,000.00 65,000.00 inv. reflected their needs - female. 19-Jun-2015 19-Jun-2015 22-Dec-2022 Comments (achievements against targets): Project exceeded this target by 81 percent. Slightly different from the calculation of direct project beneficiaries, this figure was based on estimates from subscriber, grievance data and online sources (Facebook and DataReportal) gathered by the task team. Page 32 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Objective/Outcome: Beneficiaries that feel project investment reflected their needs - male. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Beneficiaries that feel project Number 0.00 36,000.00 65,000.00 investment reflected their needs - male. 19-Jun-2015 19-Jun-2015 22-Dec-2022 Comments (achievements against targets): Project exceeded this target by 81 percent. This figure was based on estimates from subscriber, grievance data and online sources (Facebook and DataReportal) gathered by the task team. Objective/Outcome: Wholesale Internet Bandwith Price ($/Mbps/month) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Wholesale Internet Bandwith Amount(USD) 1,500.00 400.00 72.00 Price ($/Mbps/month) 19-Jun-2015 19-Jun-2015 30-Jun-2022 Comments (achievements against targets): Project exceeded this target. Actual achieved price reflects an 82% reduction in the originally targeted price. Objective/Outcome: Available International Bandwidth (mbps) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Page 33 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Available International Number 250.00 3,000.00 14,000.00 Bandwidth (mbps). 19-Jun-2015 19-Jun-2015 22-Dec-2022 Comments (achievements against targets): Project exceeded this target. Actual achieved is 4.7 times over the target. Objective/Outcome: Coverage of the NDID system Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion NDID institutionalized Yes/No No Yes Yes 30-Aug-2019 31-Dec-2022 22-Dec-2022 Comments (achievements against targets): Project achieved this target. An NDID unit was established by SBS, with a policy and strategic plan for NDID adopted by Government. A.2 Intermediate Results Indicators Component: Component 1 (a) Submarine Cable System Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Page 34 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Length of Fiber Optic Kilometers 0.00 1,300.00 1,385.00 Network Built (km) 19-Jun-2015 19-Jun-2023 30-Jun-2022 Comments (achievements against targets): The Project achieved this target. Component: Component 1 (b) Landing Stations and Ancillary Equipment Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Private Capital Mobilized Amount(USD) 0.00 8,000,000.00 8,097,426.00 19-Jun-2015 19-Jun-2015 22-Dec-2022 Comments (achievements against targets): The Project exceeded this target by 1.2 percent. Component: Component 3. Project Implementation and Administration Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion National installed data Number 0.00 8,000.00 9,500.00 Page 35 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) capacity 19-Jun-2015 19-Jun-2015 22-Dec-2022 Comments (achievements against targets): Project exceeded target of 8,000 by 1,500 Mbps. The indicator measures future operator expectations. This indicator was added under Component 3 in ISR Seq. No. 8, with an indication that the new indicator will be discussed in the August 2019 restructuring paper. However, the restructuring paper omitted the discussion of any new indicators under Component 3. While none of the earlier ISRs documented the unit of measurement of this indicator, the task team corrected an error in its target value in the 17th ISR. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Available (lit optical and Number 250.00 3,000.00 20,000.00 contracted satellite) International Bandwidth 19-Jun-2015 19-Jun-2015 22-Dec-2022 (mbps) Comments (achievements against targets): Project exceeded target of 3,000 Mbps. Actual achieved at completion is 6.7 times the target amount. According to ISR Seq. No. 8 and 17 the indicator measured capacity of lit optical fiber and contracted satellite capacity which is the total capacity available to Samoan operators via established commercial contracts (not necessarily fully in use). The indicator could support long-term planning for demand. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Monthly volume of data Number 650.00 1,250.00 16,000.00 downloaded--all service 30-Apr-2019 19-Jun-2015 22-Dec-2022 Page 36 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) providers (Terabytes) Comments (achievements against targets): Project exceeded target of 1,250 TB. Actual achieved at completion is 12.8 times the target. ISR Seq. No. 17 stated that the reduction in data prices and COVID-19 lockdowns bolstered total data download. August 2019 restructuring paper stated that the indicator measures “the extent of utilization of internet bandwidth across the Samoan market. This increase can be partly attributed to Tui Samoa’s fiber-optic technology, ongoing investments by telecom operators to enhance the broadband network infrastructure and increased data demand resulting from COVID-19 lockdowns. It might have been challenging for the task team to foresee the growth in monthly volume of data downloaded during appraisal due to digital’s rapid growth and transformational impact globally, impact on data demand from COVID-19 lockdowns and subsequent ripple effects on private sector investments. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Monthly peak data rate Number 4.00 7.00 10,800.00 (speed of data download from Tui Samoa cable to all 30-Apr-2019 19-Jun-2015 22-Dec-2022 service providers in Samoa) (Mbps) Comments (achievements against targets): Project exceeded the target of 7 Mbps. Actual achieved at completion is 1,543 times the target amount. According to ISR Seq. No. 17, the indicator measured the speed of data download from the Tui Samoa cable to all service providers in Samoa. This increase can be partly attributed to Tui Samoa’s fiber-optic technology, ongoing investments by telecom operators to enhance the broadband network infrastructure and increased data demand resulting from COVID-19 lockdowns. It might have been challenging for the task team to foresee the growth in monthly peak data rate during appraisal due to digital’s rapid growth and transformational impact globally, impact on data demand from COVID-19 lockdowns and subsequent ripple effects on private sector investments. Component: Component 4 (a) Legal and Regulatory Enabling Environment Indicator Name Unit of Measure Baseline Original Target Formally Revised Actual Achieved at Page 37 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Target Completion Community/CSO feedback Yes/No No Yes Yes considered in NDID bill 30-Aug-2019 19-Jun-2015 22-Dec-2022 Comments (achievements against targets): The Project achieved this target. Component: Component 4 (b) Advisory Assistance on a Samoa Digital Government Platform Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Government digital platform Yes/No No Yes Yes implementation options assessment completed 01-Jun-2019 19-Jun-2015 22-Dec-2022 Comments (achievements against targets): The Project achieved this target. The E-government assessment was completed and accepted by MCIT in July 2022. Component: Component 4 (c): Establishing the NDID system and upgrading the CR system Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion NDID implementation Yes/No No Yes Yes strategy developed 01-Jun-2019 19-Jun-2015 22-Dec-2022 Page 38 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Comments (achievements against targets): The Project achieved this target. A NDID implementation strategy was developed by Project’s closing date. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion NDID awareness campaign Yes/No No Yes Yes and public consultations launched 01-Jun-2019 19-Jun-2015 22-Dec-2022 Comments (achievements against targets): The Project achieved this target. GoS shared a consultation report with WB in November 2022 indicating that NDID awareness campaign and public consultations had been launched. B. KEY OUTPUTS BY COMPONENT Objective/Outcome 1 Reduction in cost of internet services 1. Retail price of internet services (lowest published price 2GB data volume) Outcome Indicators 2. Retail price of internet services-business (lowest published price 50GB data volume) 3. Wholesale Internet Bandwith Price ($/Mbps/month) Page 39 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) 1. Length of fiber optic network built (km) 2. National installed data capacity Intermediate Results Indicators 3. Available (lit optical and contracted satellite) international bandwidth (mbps) 1. Kilometers of undersea cable built 2. Acquisition of equipment, systems and software for the telecoms Key Outputs by Component regulator (linked to the achievement of the Objective/Outcome 1) 3. Special Purpose Vehicle for cable construction established 4. Trainings conducted for staff of OoTR Objective/Outcome 2 Increased availability of internet services 1. Access to Internet Services (number of subscribers per 100 people) Outcome Indicators 2. Available International Bandwidth (mbps) 1. Private Capital Mobilized 2. Monthly volume of data downloaded--all service providers Intermediate Results Indicators (Terabytes) 3. Monthly peak data rate (speed of data download from Tui Samoa cable to all service providers in Samoa) (Mbps) 1. Kilometers of undersea cable built 2. Acquisition of equipment, systems and software for the telecoms Key Outputs by Component regulator (linked to the achievement of the Objective/Outcome 2) 3. Special Purpose Vehicle for cable construction established 4. Trainings conducted for staff of OoTR Objective/Outcome 3 Development of foundations of digital government including digital ID Outcome Indicators 1. NDID institutionalized Intermediate Results Indicators 1. Community feedback considered in NDID bill Page 40 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) 2. Government digital platform implementation options assessment completed (Yes/No, Custom) 3. NDID implementation strategy developed(Yes/No, Custom) 4. NDID awareness campaign and public consultations launched (Yes/No, Custom) Key Outputs by Component 1. Certificate of Memorandum on updated national digital ID bill (linked to the achievement of the Objective/Outcome 2) 2. Community consultations conducted at the village level Page 41 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Natasha Beschorner Task Team Leader(s) Jinan Shi Procurement Specialist(s) Stephen Paul Hartung Financial Management Specialist Andrea Ruiz-Esparza Team Member Marjorie Mpundu Counsel Sean David Michaels Team Member James L. Neumann Counsel Ross James Butler Social Specialist Claire Marion Forbes Team Member Nicholas John Valentine Social Specialist Supervision/ICR Fawah Ngeniform Akwo, Siou Chew Kuek Task Team Leader(s) Andrea Ruiz-Esparza Team Member Myat Kay Khine Procurement Specialist(s) Janet Virginia Gamarra Rupa Financial Management Specialist Dean Georgakopoulos Procurement Team Shivnesh Roynendra Prasad Team Member Nicholas Gerard Williams Procurement Team Rosemary Alexandra Davey Environmental Specialist Eka L Vakacegu Yabaki Team Member Jonathan Daniel Marskell Team Member Page 42 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Craig Andrew Clark Social Specialist Kyoung Yang Kim Team Member Nicholas John Valentine Environmental Specialist James L. Neumann Team Member John Haydon Team Member Thomas John Callander Social Specialist Duangrat Laohapakakul Counsel Wolfhart Pohl Environmental Specialist B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY12 .275 16,761.32 FY13 5.066 34,438.18 FY14 10.205 87,485.90 FY15 18.617 138,320.55 FY16 0 31,121.00 FY17 0 760.96 Total 34.16 308,887.91 Supervision/ICR FY12 .250 497.20 FY15 0 1,704.37 FY16 12.858 81,138.65 FY17 7.260 50,268.32 FY18 5.216 73,231.41 FY19 10.699 138,210.53 Page 43 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) FY20 7.555 92,318.54 FY21 19.580 97,907.48 FY22 19.084 106,707.05 FY23 20.326 154,171.86 FY24 5.735 30,907.78 Total 108.56 827,063.19 Page 44 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) ANNEX 3. PROJECT COST BY COMPONENT Amount at Approval Actual at Project Percentage of Approval Components Closing ($ million) (%) ($M) Component 4 (a) ): Legal and regulatory enabling 0 .50 0 environment Component 4 (b) Advisory Assistance on a Samoa Digital 0 .40 0 Government Platform Component 4 (c): Establishing the NDID system and 0 3.20 0 upgrading the CR system Component 1 (a) Submarine 0 33.00 0 Cable System Component 1 (b) Landing stations and ancillary 0 2.85 0 requipment Component 1(c) Additional 0 7.41 0 costs Component 2. ICT Regulatory 0 1.47 0 Technical Assistance Component 3. Project implementation and 0 1.11 0 administration Total 0.00 49.94 0.00 Page 45 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) ANNEX 4. EFFICIENCY ANALYSIS 1. The economic impacts analysis in this ICR assumed that a 10-percentage point increase in broadband penetration correlates with a 1.38 percent increase in GDP in developing countries. 60 The calculation is as follows: - “Access to Internet Services (Number of subscribers per 100 people)” increased from 27 to 55 between 20215 and 2022, incurring an increase of 28 percentage points. - Broadband impact on GDP is calculated as: 28/10 x 1.38%. 2. At the level of the end-user the aggregate consumer surplus of mobile connectivity in Samoa during 2015-2022 was approximately US$8,686. At the per capita level this estimation is small but signifies positive impacts of the price reduction and increased availability of mobile connectivity enabled by the operation. It is expected that increased competition in the telecoms sector and advancement in the digital economy will increase the consumer surplus. This calculation used the historical average revenue per user (ARPU) (annual) as an end-user’s willingness to pay for a mobile phone at the time. 61 Considering the current ARPU (measured in 2022) as the ‘cost’ of mobile connectivity (actual amount the end-user paid), the difference between the historical and current ARPU could be regarded as consumer surplus, or net gain in value. Any savings can be reallocated towards other goods or services. Figure A4.1. Calculating the Value of Mobile Connectivity to End-users in Samoa, 2015-2022 60 Qiang, Christine Zhen-Wei, Carlo Rossotto, and Kaoru Kimura. 2009. “Economic Impacts of Broadband.” In Information and Communications for Development. Washington D.C.: World Bank. https://documents1.worldbank.org/curated/en/645821468337815208/pdf/487910PUB0EPI1101Official0Use0Only1.pdf 61 See Enriquez, L., Schmitgen, S., & Sun G. 2007. The true value of mobile phones to developing markets. The McKinsey Quaterly Web exclusive. February. Retrieved from: https://17333479535038929333.googlegroups.com/attach/e9de8f3995c5f57b/Mckinsey%20-%20Mobile%20Phones%20the%2 0True%20Value%20In%20Developing%20Markets.pdf?part=0.1&view=1&vt=ANaJVrH3mJVlNCqEY4J1j0BIGHoRAH375lTa98T_e DKVrt-BTos5n4w0ER6GbfX1jkCj5UadeTjBBeDGAOnN2ITAhEohAx3aF9UEp3AOI4nZrkumniYl7TI Page 46 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Source: World Bank staff calculation using annual Average Revenue Per User (ARPU), by mobile connection data from GSMA Intelligence. ARPU is defined by GSMA as “total recurring (service) revenue generated per connection per month in the period. Despite the acronym, the metric is strictly average revenue per connection, not per subscriber.” GSMA reports the weighted average of total ARPU for mobile national operators (MNOs) in the market and ARPU is only calculated when a majority connections market share of MNOs (= 50%) report ARPU. Assumption: Historical ARPU proxies end user’s willingness to pay at the time and remains fixed. Page 47 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) ANNEX 5. BORROWER, COFINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS The following comments were received from the Borrower in September 2023. They are summarized as the comments were provided in the Word version of the draft ICR from August 2023: 1. It is not certain where this (the ratings in Sequence 15 of the ISR) comes from as there was no Aide Memoire for the July 2022 mission received. The only Aide Memoire received around this period was for the May 18 to 20, 2022 mission. 2. The spelling of Internet is inconsistent and should always be spelt with a capital according to the UN World Summit of the Information Society (2003, Geneva) 3. The final IFR for Jan-Mar 2023 was completed on time and submitted to Ministry of Finance (MOF) for upload to Client Connection, however it was only recently that the Borrower was aware that World Bank (WB) had not received it. During discussions with WB finance team, they were also advised that there is no button for this report on Client Connection. Therefore, the Borrower has provided the report for their review which is ongoing. Also advised WB finance team, that although the project was completed in December 2022, it does not mean reports are also completed as these can only be prepared afterwards after all transactions have completed during the grace period. Final figures can be provided after WB review. 4. The sentence on “The fall in the price of wholesale internet bandwidth, from $1,500 per Mbps per month in 2015 to 72 Gbps per month” is confusing as it appears to compare cost with the bandwidth. 5. Several lockdowns and Statement of Emergency (SOE) in Samoa during the COVID19 should also be considered as another factor in the delay, when the technical and legal Consultants carrying out these components could not travel to Samoa. Most of the implementation especially meetings and discussions were done virtually, and this was a new and unique project whereby local expertise was lacking. However, the Project Team gave their best to try and continue the project. 6. Proposed monitoring and evaluation from OoTR was still in discussion and due to revised extension, this was one of the additional activities that was declined in the final restructure phase of the project. 7. Need to differentiate between the Project Accounts Audit and the Audited FS from the Entity i.e., SSCC. If this is the case. 8. All audits for the project have been submitted on time, the delay in WB review of IFR has always been an issue, e.g., the Dec 22 review only came in late July yet the final IFR for the grace period ending 31st March was already submitted, refer earlier comment regarding this issue of the IFR. Appreciate if the author refers to MOF and the project counterpart for clarification on this before finalizing the FM section, as even the draft Financial Accounts have already been completed way before this. 9. The final audit will provide a full accounting of the final year of the project’s finances and confirm the amount to be returned to WB from the designated account. 10. The Bank project team had always been aware of the change orders in December 2017. The only reason the change order was declined were for those related to the spare parts for the cable. WB had advised these items have commercial nature and are not eligible for funding. Page 48 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) 1. Australia-Pacific Islands Partnership Grant TF0A2332 Grant Agreement and Corrigendum. https://documents1.worldbank.org/curated/en/440051470255791109/pdf/RAD512738919.pdf https://documents1.worldbank.org/curated/en/787831467742830025/pdf/RAD674940238.pdf 2. Audited Financial Statements. https://documents.worldbank.org/en/publication/documents- reports/documentlist?qterm=p128904&docty_exact=Auditing+Document&disclstat_exact=Disclosed 3. Disclosable Version of the ISR – WS: Pacific Regional Connectivity Program: Phase 3 – Samoa – P128904 – Sequence No : 1 through 17 (English) https://documents.worldbank.org/en/publication/documents- reports/documentlist?qterm=P128904&docty_exact=Implementation+Status+and+Results+Report 4. Government of Samoa’s ICR. 5. IBRD/IDA/IFC/MIGA Regional Partnership Framework for Kiribati, Nauru, the Republic of Marshall Islands, Federated States of Micronesia, Palau, Independent State of Samoa, Kingdom of Tonga, Tuvalu, and Vanuatu for the period FY17–FY23 (Report No. 120479 – EAP). https://documents1.worldbank.org/curated/en/137341508303097110/pdf/120479-WP-P156647- PUBLIC-SydneyRPFFA.pdf 6. Nine Pacific Island Countries (PIC9) Regional Partnership Framework Performance and Learning Review (Report Number: 145750-EAP; presented to the Board on February 6, 2020. https://documents1.worldbank.org/curated/en/302731583719311381/text/Nine-Pacific-Island- Countries-PIC9-Kiribati-Nauru-Marshall-Islands-Federated-States-of-Micronesia-Palau-Samoa- Tonga-Tuvalu-and-Vanuatu-Performance-and-Learning-Review-for-the-Period-FY2017-2021.txt 7. Official Documents- Memorandum of Understanding between Asian Development Bank and IBRD Ref. Grant D063-WS (English). https://documents.worldbank.org/en/publication/documents- reports/documentdetail/979941468304771169/official-documents-memorandum-of-understanding- between-asian-development-bank-and-ibrd-ref-grant-d063-ws 8. Official Documents- Amendment to the Financing Agreement for Grant D063-WS (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/463661568835799882/Official-Documents- Amendment-to-the-Financing-Agreement-for-Grant-D063-WS. 9. Official Documents- Financing Agreement for Grant D063-WS (Closing Package) (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/227731473702021266/Official-Documents-Financing- Agreement-for-Grant-D063-WS-Closing-Package 10. Procurement Plan. https://documents.worldbank.org/en/publication/documents- reports/documentlist?qterm=p128904&docty_exact=Procurement+Plan 11. Project Appraisal Document (PAD). https://documents1.worldbank.org/curated/en/813211467999714829/pdf/PAD1264-PAD-P128904- IDA-R2015-0150-1-Box391454B-OUO-9.pdf 12. World Bank.2023. Pacific Islands - Systematic Country Diagnostic Update : Growth and Resilience. Washington, D.C. : World Bank Group. (Board Doc. No.: SecM2023-0079,IDA/SecM2023- 0064,IFC/SecM2023-0075,MIGA/SecM2023-0036; disclosed on March 27, 2023). https://documentsinternal.worldbank.org/search/34029025 Page 49 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) ANNEX 7. SUPPLEMENTAL TEXT A.I. Project Context and Development Objectives Context Sector Context at appraisal A7.1. Broadband targets. The MCIT issued the National Broadband Policy in 2012 calling for higher penetration of high-speed services. The MCIT proposed broadband adoption targets for 2015 and 2020 (Table A7.1) Table A7.1. Broadband Adoption Targets 2015 2020 Households Businesses Households (%) Businesses (%) (%) (%) Urban 11-20 ~30 Urban 31-40 ~60 Rural 0-10 11-20 Rural 21-30 ~40 Source: MCIT 2012. A7.2. The Bank responded to the GoS to support the financing of the undersea cable in order to contribute to meeting the broadband targets. To reduce any risks involved in the PPP arrangement (e.g., net benefit to private sector is detrimental to the interests of end-users), the Bank added covenants and disbursement conditions in the IDA grant which would require: (a) early establishment and operationalization of the SSCC as its own legal entity, including adoption of by-laws, articles of association, shareholders agreement, and related contractual instruments for the financing and operation of SSCC, (b) an offer to involve the private sector in financing the SSCC in an amount and in a manner satisfactory to IDA and (c) the preparation of an independent appraisal of the proposed structure for SSCC, including ownership, financing and governance arrangements, business model, divestiture arrangements, and the mechanism for ensuring financial equilibrium in the interests of users of ICT services in Samoa. A7.3. Key Expected Outcomes and Outcome Indicators (1) Reduce the cost of internet services Wholesale Internet Bandwidth Price ($/Mbps/month): From appraisal until 2018 (inauguration of the new cable system) the indicator estimated the cost of bandwidth using the SAS/ASH cable, geostationary satellite, and O3b satellite, as determined by the regulator (as prices were undisclosed). From 2018 onwards this indicator measured the pricing for 1Gbps capacity purchased per the disclosed SSCC’s pricing schedule in US$/Mbps/month. Actual prices were lower depending on the volume purchased. Retail price of internet services – subscribers: This indicator measured the lowest price of 2GB data volume based on pricing published on operators' websites. The Bank team conducted this market survey, and the indicator was verified by the regulator. Retail price of internet services – business: This indicator measured the lowest price of 50GB data volume based on pricing published on operators' websites. The Bank team conducted this market survey, and the indicator was verified by the regulator. Actual prices were subject to negotiation and any related and/or complementary purchases by the business. Page 50 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) (2) Increase the availability of internet services Access to internet services: This indicator measured the number of unique subscribers of mobile broadband (3G and 4G) per 100 people. Available (lit optical and contracted satellite) International Bandwidth (Mbps): The indicator represented the total capacity available to Samoan operators (that would also meet anticipated future demand) via established commercial contracts through the cable systems and satellite. Monthly Volume of Data Downloaded – all service providers (Terabytes): This indicator measured the actual consumption of data measured by the total volume of data downloaded by all operators on a monthly basis. Telecom operators submitted the data to the regulator for verification. Reduction of prices of internet services and increased availability of internet services contributed to a rising trend in monthly volume of data downloaded. (3) Facilitate the development of initial foundations for digital government including digital ID NDID institutionalized: This indicator measured whether or not an NDID unit had been established by the Samoa Bureau of Statistics (SBS), with a policy and strategic plan for NDID adopted by Government, and a certification of memorandum issued by the Attorney General (AG) on the NDID bill. The PMU and SBS verified the indicator. Community feedback considered in the NDID bill: This indicator measured whether the draft of the NDID bill had incorporated feedback from citizens through community consultations. The PMU and SBS verified the indicator. Components Table A7.2. Project Financing Plan (at Appraisal) US$ Components million Financier(s) IDA ADB DFAT SSCC GoS 1. Samoa-Fiji Cable 1(a) Submarine cable system (including 37.38 14.0 18.50 0.00 0.00 4.88 approximately 8% contingency) 1(b) Landing stations & 2.85 0.00 0.00 1.50 0.98 0.37 ancillary equipment 1(c) Additional costs 7.41 0.00 0.00 0.00 7.20 0.21 Subtotal 47.64 14.00 18.50 1.50 8.18 5.46 2. Regulatory Technical 1.44 1.25 0.00 0.00 0.00 0.19 Assistance 3. Project Implementation and 0.86 0.75 0.00 0.00 0.00 0.11 Administration GRAND TOTAL 49.94 16.00 18.50 1.50 8.18 5.76 Page 51 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) Table A7.3. Project Financing Plan (Actual) US$ Components million Financier(s)     IDA ADB DFAT SSCC GoS 1. Samoa-Fiji Cable             1(a) Submarine cable system (including approximately 8% contingency) 23.12 9.77 13.35 - - - 1(b) Landing stations & ancillary equipment 2.61 - - 0.87 1.16 0.59 1(c) Additional costs 6.94 - - - 6.94 - Subtotal 32.67 9.77 13.35 0.87 8.10 0.59 2. Regulatory Technical Assistance 0.91 0.82 - - - 0.10 3. Project Implementation and Administration 1.26 1.04 - - - 0.22 4. National Digital ID System Development 1.04 1.04 - - - - GRAND TOTAL 35.98 12.76 13.35 0.87 8.10 0.90 A7.4. Revised PDO Indicators PDO Indicators The first restructuring (Aug 2019) added new PDO indicators for Component 4. • Percentage of Samoa’s population who have received their credentials from the NDID system (of whom are women and girls) – End of Project target: 80% • Number of institutions using the NDID system to authenticate their clients/customers – End of Project target: 5 (e.g. 1-2 banks, Money Transfer Operators, passport applications, health information system, education management information system) In the last restructuring (Oct 2022), a new PDO indicator “NDID institutionalized (Yes/No)” was included. All newly added indicators from August 2019 were dropped: • Percentage of Samoa’s resident population who have received their credentials from the NDID system • Percentage of population who have received their credentials from the NDID system of whom are women and girls • Number of institutions using the NDID system for automated identity authentication of their clients Intermediate results indicators The first restructuring (Aug 2019) added four new intermediate results indicators under Component Page 52 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) 3: • National installed data capacity (Number) • Available (lit optical and contracted satellite) International Bandwidth (mbps) (Number) • Monthly volume of data downloaded--all service providers (Terabytes) • Monthly peak data rate (speed of data download from Tui Samoa cable to all service providers in Samoa) (Mbps) The following nine intermediate results indicators were added to Component 4 in the first restructuring: • Law establishing National Digital ID System is enacted (Yes/No) • Community/CSO feedback considered in NDID bill (Yes/No) • Government digital platform implementation options assessment completed (Yes/No) • NDID implementation strategy developed (Yes/No) • NDID awareness campaign and public consultations launched (Yes/No) • NDID system enrollment begins (Yes/No) • NDID system begins automated authentication (Yes/No) • New civil registration software is operational (Yes/No) • NDID and CR systems sharing data on births and deaths (Yes/No) The last restructuring added a new intermediate indicator “Community/CSO feedback considered in NDID bill (Yes/No)” and deleted the following intermediate indicators in Component 4: • Community/CSO feedback considered in NDID bill (Yes/No) Government digital platform implementation options assessment completed (Yes/No) • NDID implementation strategy developed (Yes/No) • NDID awareness campaign and public consultations launched (Yes/No) B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome Objective 1: Reduced Cost of Internet Services A7.5. There was further scope to reduce prices and improve the quality of service (QoS) and availability of internet. First, affordability was still a key challenge in remote parts of Samoa and was a topic of political interest. Residents interviewed during the ICR mission conveyed that some families had one mobile broadband subscription that was shared among family members by hotspot. In 2021, the cost of 1GB per gross national income per capita for Samoa was 4.96 percent (Table A6.4), above the regional median (3.78 percent) and far above the affordability target of 2 percent of monthly GNI per capita set by the United Nations Broadband Commission for Sustainable Development. A Fintech executive in an interview remarked that internet costs are still high for small and medium enterprises due to data caps. Benefits from opting for plans with higher data caps sometimes do not justify the additional expenses and makes it challenging for the business to expand operations into data-intensive services. Second, telecom operators felt that SSCC’s pricing of the domestic cable to Savai’i was not competitive and opted to use microwave backhaul. This contributed to a low use rate of the cable. Third, the cost of internet did not Page 53 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) align with residents’ expectation for QoS. The observations made during the ICR mission was that the capacity of terrestrial networks was limited, and this affected the reliability and efficiency of internet connections. For instance, only one of the major telecom operators had an extensive terrestrial fiber network while the other leased dark fiber from the government and relied heavily on microwave backhaul. Table A7.4. Cost of 1GB per Gross National Income per capita (source: Alliance for Affordable Internet (A4AI)) Cost of 1GB (% of GNI per capita) Fiji 3.01 Kiribati 5.62 Federated States of Micronesia 8.98 Nauru 1.64 Palau 1.89 Republic of Marshall Islands N/A Samoa 4.96 Solomon Islands 8.85 Tonga 2.05 Tuvalu N/A Vanuatu 3.78 Median 3.78 Average 4.46 Objective 2: Availability of Internet Services A7.6. During the ICR mission it was evident that telecom operators had increased the number of telecom towers by around 40 percent since the start of the Project. However, there were still gaps in access to internet services. A household survey conducted in 2022-2023 indicated that around 11 and 18 percent of households in urban and rural areas (respectively) did not have an internet connection. 62 A few of the primary schools in Savai’i were still in underserved areas and without access to the internet. QoS was also a challenge due to frequent congestion of the networks. The founder of Makeki indicated that issues with connection were affecting their business operation. E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender A7.7. Makun, Singh, and Lal (2020) show, using data from Pacific Island Countries including Samoa from 2000 to 2018, that mobile use and internet access is positively associated with life expectancy, female labor force participation, and reduction in the infant mortality rate. This was evident during the ICR mission as Makeki observed an increase in the number of women using the online marketplace to sell their products. Also, women interviewed expressed that broadband enabled them to participate in online educational platforms, such as the United States Government’s Academy of Women Entrepreneurs and 62Statistics Bureau of Samoa. Samoa MICS Plus, 2022-2023. https://www.sbs.gov.ws/images/sbs- documents/Population_and_Demography/2023/SAM_MICSPlus_Wave1_Snapshot.pdf Page 54 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) its DreamBuilder platform, which aims to teach women about entrepreneurship and offers mentoring opportunities. Mobilizing Private Sector Financing A7.8. Increased demand for broadband also brought opportunities for local telecom operators to invest in the expansion and upgrading of the network. The ICR mission confirmed that since 2018, both operators had increased the number of towers by 40 percent. Accounting for cost of licenses and tower construction, overall investment for each operator can be estimated to be around US$1.8 to US$2 million a year since 2018. Anticipating increased demands for connectivity from Tui Samoa, by March 2017, Bluesky Samoa had switched to 4G networks. By 2020 Digicel’s networks were 100 percent Long Term Evolution (LTE) 63 and Vodafone Samoa had expanded its network using LTE-1800 spectrum that can connect more consumers and reduce congestion. 64 The company also introduced fiber-to-the-home technology, in addition to copper networks, with fiber optic connections at speeds up to 1Gbps. The Project also attracted foreign direct investment, new job opportunities, and expansion of the port sector. TE SubCom, a global supplier of undersea communications, inaugurated a US$5 million Samoa Cable Depot at Matatutu Wharf in 2018, in partnership with SSCC. The depot was established as a servicing center for over 65,000km of telecom and power cable systems under the South Pacific Marine Maintenance Agreement. 65 The ICR mission confirmed that the depot brought around WST 120,000 per year in revenue for the Samoa Ports Authority and 20-30 contractual jobs since 2018. Other Unintended Outcomes and Impacts A7.9. Readily available and cheaper internet enabled a growing number of people and businesses to adopt digital technologies, with improvements in productivity, innovation, social welfare, and access to information and services as intended at appraisal. For instance, digital marketing was on the rise with small operators in tourism who used the internet to promote their services and facilitate bookings. Farmers accessed the Agritouch app developed by the Ministry of Agriculture and Fisheries to gather information on farming and related trainings. In Samoa, the primary use of the internet was social media, and it offered a platform to host a wide range of information, including food prices, weather updates, flight cancellations, blood donation requests, and more. The internet also allowed the Samoan people to be closer to families and its diaspora overseas. For instance, relatives living overseas could send food to their friends and family in Samoa through Seki Eats, Samoa’s first food delivery app launched in 2019. Yet, a fragmented innovation ecosystem and limited investments in key enablers of the digital economy such as digital payments and digital skills seemed to limit its growth. Companies faced challenges in platform-to-consumer delivery due to the lack of a formal addressing system in Samoa and the costs associated in registering for a mailbox. When Maua launched an e-commerce shipping platform in 2019, it was able to do so by developing its own mapping technology. Cash was the main form of payment and 63 Telegeography. 2020. Comms Update: Digicel Samoa completes LTE rollout. September 18. Retrieved from: https://www.commsupdate.com/articles/2020/09/18/digicel-samoa-completes-lte-rollout/ 64 Samoa Observer. 2020. Vodafone Samoa reinvests $8 million back into network. August 28. Retrieved from: https://www.samoaobserver.ws/category/samoa/69493 65 https://www.samoaobserver.ws/category/samoa/14891 Page 55 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) half of Samoans did not have a bank account or use formal financial services. 66 All banks had internet banking and there were two mobile wallets in the market; however, the payment settlement time was slow, and citizens were unfamiliar with these services. This is expected to change with the launch of the Samoa Automated Transfer System in 2023. Businesses generally felt that proactive government policies could foster the growth of the digital ecosystem and drive innovation. A7.10. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Environmental and Social Safeguards Compliance. GoS prepared the necessary Initial Environmental Examination, Environmental and Social Impact Assessment, and Environmental and Social Management Plan. Temporary environmental impacts during the construction phase were localized to near-shore areas of the cable landing and easily mitigated with the Environmental and Social Management Plan. No adverse or irreversible social or environmental impacts were experienced during marine operations or landing at Suva, Savu, Wallis, Futuna, Savaii or Apia. The PMU incorporated feedback from key stakeholder groups and villages in proximity to the cable landing sites into the Environmental Examination, Environmental and Social Impact Assessment report, and Environmental and Social Management Plan. These documents were disclosed in Samoa and through the World Bank’s Infoshop in April 2015. Financial Management (FM). A desk review conducted on November 14, 2017, and subsequent supervision missions concluded that MoF maintained an acceptable FM system while an acceptable FM system was partially established and maintained by SSCC. The review found that, while having a consultant perform accounting and finance functions using an account system (Xero), SSCC had not formalized or documented all policies and procedures and was yet to appoint an auditor as stipulated in OP/BP10.00. 67 As for staffing, accounting and finance functions of the Project were implemented by one staff at MoF and a consultant appointed by SSCC. Grievance Redress Mechanism (GRM). Only in the ISR dated December 2017 68 did MNRE receive a complaint from a member of the public regarding the lack of environmental assessment or proper permits and the risks of ‘toxicity’ of the undersea cable (despite assessments indicating that there are no risks of toxicity with undersea cables). MNRE responded to the complaint and reasoned that the complaint might be a result of the lack of community consultation prior to construction in the area. Given this experience, the task team ensured that any citizen concerns around privacy, security, and inclusion in the proposed NDID system were dealt with proactively through sufficient community consultations. Safeguards. The Project triggered four Safeguards Policies at appraisal, namely: Environmental Assessment (OP/BP4.01), Natural Habitats (OP/BP4.04), Physical Cultural Resources (OP/BP4.11) and Involuntary Resettlement (OP/BP4.12). Two of the three landing sites of the submarine cable were located at existing facilities, while new infrastructure included installation of ducts along public roads connecting the cable to landing sites and cable stations. The road and infrastructure locations were notionally 66 Government of Samoa. 2023. Samoa’s New Digital Payment System to Boost Financial Inclusion and Support Economic Activity. May 18. Retrieved from: https://www.samoagovt.ws/2023/05/samoas-new-digital-payment-system-to-boost- financial-inclusion-and-support-economic-activity/ 67 Under the Bank’s OP/BP 10 with respect to projects financed by the Bank, the borrower and implementing agency are required to maintain financial management systems – including accounting, financial reporting, and auditing systems adequate to ensure they can provide the Bank with accurate and timely information regarding the project resources and expenditures. 68 ISR. Seq. No. 6 Page 56 The World Bank WS: Pacific Regional Connectivity Program: Phase 3 - Samoa (P128904) identified as government-owned land; however, Involuntary Resettlement (OP/BP4.12) was trigged to ensure due diligence in land tenure investigations, along with preparation of a resettlement policy framework. A country-level social analysis concluded that OP/BP4.10 on Indigenous Peoples 69 was not applicable to the social context of Samoa. 69Samoa did not satisfy all four criteria of OP/BP4.10 for application of the policy: (i) self-identification as members of a cultural group, (ii) collective attachment to habitats/territories, (iii) customary institutions, and (iv) indigenous language. Page 57