The World Bank Digital Samoa Project(P180807) @#&OPS~Doctype~OPS^blank@pidconcoverpage#doctemplate Project Information Document (PID) Concept Stage | Date Prepared/Updated: 22-Dec-2023 | Report No: PIDDC00322 Dec 22, 2023 Page 1 of 10 The World Bank Digital Samoa Project(P180807) @#&OPS~Doctype~OPS^dynamics@pidbasicinformation#doctemplate BASIC INFORMATION A. Basic Project Data Project Beneficiary(ies) Operation ID Operation Name Samoa P180807 Digital Samoa Project Region Estimated Appraisal Date Estimated Approval Date Practice Area (Lead) EAST ASIA AND PACIFIC 21-Jun-2024 15-Oct-2024 Digital Development Financing Instrument Borrower(s) Implementing Agency Investment Project Ministry of Finance Office of the Regulator, Financing (IPF) Ministry of Communications & Information Technology Proposed Development Objective(s) To increase resilient, inclusive and safe access to broadband and enhance the capacity of the Recipient to deliver digitally enabled public services. @#&OPS~Doctype~OPS^dynamics@pidprojectfinancing#doctemplate PROJECT FINANCING DATA (US$, Millions) Maximizing Finance for Development Is this an MFD-Enabling Project (MFD-EP)? No Is this project Private Capital Enabling (PCE)? No SUMMARY Total Operation Cost 20.05 Total Financing 20.05 of which IBRD/IDA 20.05 Financing Gap 0.00 DETAILS World Bank Group Financing International Development Association (IDA) 20.05 IDA Grant 20.05 Dec 22, 2023 Page 2 of 10 The World Bank Digital Samoa Project(P180807) @#&OPS~Doctype~OPS^dynamics@envsocriskclassification#doctemplate Environmental and Social Risk Classification Concept Review Decision Moderate The review did authorize the preparation to continue Other Decision (as needed) B. Introduction and Context Country Context 1. Samoa1, a lower-middle income country in south-central Pacific Ocean in the Polynesian region, is largely dependent on tourism, remittances, and fiscal aid. Tourism accounts for a quarter of Samoa’s GDP, a third of the country's total foreign reserves and employs around 15 percent of the workforce.2 The border closure and restriction on domestic economic activities due to the COVID-19 pandemic affected local businesses with spillover effects into other sectors, resulting in a real GDP decline of 15 percent cumulatively over fiscal years 2020-2022.3 In 2022, GDP per capita was US$3,743.21, approximately 10 percent lower than that just four years prior, in 2018 (US$4,189.10).4 After the reopening of the country to tourism, the economy is expected to bounce back with 5.0 percent real GDP growth in FY2022/23 and taper off to around 2.3 percent in FY2027/28.5 In 2018, more than one- fifth of the population lived under the basic-needs poverty line (21.9%), approximately 3 percentage points higher than the poverty rate in 2013/14 (18.8%).6 2. Samoa’s small population and geographic remoteness pose challenges for economic diversification. Due to its small population of around 222,3827 people (2022), Samoa relies heavily on external trade, foreign investment and fiscal aid for sustained economic growth. This also makes the country more vulnerable to external shocks. High-speed internet, e-commerce, digital payments, and other emerging technologies can foster the growth of the digital sector and help Samoa overcome the tyranny of distance and connect to global value chains. Investing in green technologies to power the digital economy can also make Samoa more attractive for foreign direct investments. 3. Samoa is also highly vulnerable to climate change and experiences natural disasters once every five years on average8. Resilience is a key priority of the Government of Samoa, with prominence given to ex-ante investments in resilient9 infrastructure. Enhanced resilience also safeguards sustainable growth and economic diversification. Under a very high emissions scenario Samoa is expected to experience an increase in temperature in the range of 1 The country’s name was changed from Western Samoa to Samoa in July 1997. 2 Samoa News. 2023. " Samoa’s tourism industry provides a big chunk of the country’s GDP" February 19. https://www.samoanews.com/regional/samoas-tourism- industry-provides-big-chunk-countrys-gdp 3 IMF Article iv. 2023 4 World Development Indicators. GDP per capita (current US$) 5 IMF Article iv. 2023 6 Samoa Poverty and Hardship Report 2023 7 World Development Indicators. 8 The IMF Article iv. 2023 9 This term will be defined in subsequent project documents. For the PCN, resilient refers to the ability of ICT systems to withstand, recover from and change in the face of an external disturbance such as a natural disaster. Dec 22, 2023 Page 3 of 10 The World Bank Digital Samoa Project(P180807) 0.5-1.1°C10 by 2030. In addition, rise in sea level is projected to be in the range of 7-17 cm by 2030. The compounding effects of sea level rise, heightened frequency of extreme rainfall, escalating intensity of cyclones11, and ocean acidification will increase Samoa’s vulnerability, significantly affecting livelihoods and security. Samoa is largely dependent on tourism and a substantial portion of its population is engaged in agriculture and fisheries which are intricately linked to changes in the environment. Any changes in the natural environment such as coral bleaching, loss in biodiversity, decline in fish species, etc., will significantly strain sustainable economic growth and well-being of Samoa’s citizens. Furthermore, around 70 percent of the population live in low-lying coastal areas which are susceptible to natural disasters. This is the same case for infrastructure and hence, the physical investments of the Project will require adaptation measures in addition to climate change mitigation efforts. Sectoral and Institutional Context 4. Samoa was one of the pioneers in the Pacific region to liberalize the telecoms sector. A new telecommunications legislation (Telecommunications Act 2005) passed in June 2005 to liberalize the market, established key regulatory components of a competitive market and instituted the Office of the Regulator (OoTR) to provide regulatory oversight. The World Bank provided technical assistance in advancing the regulatory reform through a US$4.48 million development credit12. Samoa boasts one of the highest rates of mobile phone coverage in the Pacific region. The Telecommunications sector is highly competitive, with the presence of two regional operators (Digicel Samoa and Vodafone Samoa, which are privately owned by Telstra and Amalgamated Telecom Holding Limited, respectively). 5. The Government of Samoa (GoS) invested in an undersea cable, Tui Samoa, that expanded international bandwidth of the country from 250Mbps to 14,000Mbps over 2015-2022. The new cable proved invaluable during COVID-19-related lockdowns and enabled monthly data download volume to expand by 25 times from 650 Terabytes to 16,000 TB. The investment was supported by World Bank’s US$16 million IDA grant (See WS: Pacific Regional Connectivity Program: Phase 3 – Samoa P128904). The Tui-Samoa submarine cable system is owned and operated by Samoa Submarine Cable Company Limited (SSCC), established in April 2015. SSCC was created by the Government of Samoa and the company’s six founding shareholders Samoa National Provident Fund (SNPF), Unit Trust of Samoa (UToS), Samoa Life Assurance Corporation (SLAC), Bluesky Samoa Ltd (BSL), Computer Services Ltd (CSL) and Digicel Samoa Ltd (DSL). 6. GoS is strongly committed to national digital transformation. For example, GoS is planning to introduce a digital ID to improve the delivery of and access to services. The National Digital Identification Bill 2023 has undergone two readings at the Parliament and GoS is preparing to integrate the digital ID into government services in anticipation of the enactment of the bill. The Bank is supporting GoS through the planned Samoa Finance Sector Resilience (SFSR) (P181456) project, which aims to significantly reduce the cost of remittances and increase financial inclusion by availing access to services outside of Apia. The success of both the digital ID rollout and the SFSR project are heavily dependent on the proposed infrastructure upgrades and expansions as proposed by the Samoa Digital project. 7. Limited fixed fiber network remains a barrier for innovation of fixed broadband services and creates a bottleneck for the ICT industry. Fixed broadband services are generally faster and more reliable than mobile broadband connections and are seen as critical enablers to facilitate the expansion of access, uptake and to 10 https://www.mnre.gov.ws/wp-content/uploads/2021/03/Samoa-Climate-Change-Policy-2020-2030.pdf 11 According to Samoa Climate Change Policy 2020 there is likely to be an increase in the average maximum wind speed of cyclones by between 2% and 11% and an increase in rainfall intensity of about 20% within 100 km of the cyclone center 12 Telecommunications and Postal Sector Reform Project (P075739) Dec 22, 2023 Page 4 of 10 The World Bank Digital Samoa Project(P180807) support the transition to a digitally enabled and vibrant economy. In stark contrast to the significant improvement of mobile broadband services13 in Samoa, the fixed broadband infrastructure and uptake lags considerably behind. Fixed broadband household subscriptions currently stands at 6.1% which is significantly lower than the regional average14 (27.72%) and the average in GDP per capita decile (47.8%).15 A survey of the market also reveals that the lowest entry level fixed broadband costs approximately US$5516, compared to approximately US$24 for a similar package in Fiji. The limited fixed fiber infrastructure outside of Apia in Upolu and in Savai’i also present considerable challenges to the network operators in limiting their potential to improve broadband services and expand coverage. The limited fixed fiber network has, likewise impeded GoS’s plan to increase accessibility of ICT services to rural areas of Samoa. 8. This Project seeks to address the remaining challenges to overcome for Samoa to fully reap the benefits of the digital economy. (a) The cost of connecting remote villages is commercially unviable given the significant fixed costs of maintaining services in a market characterized by sparse population spread over a relatively wide geographical area. The low average revenue per user in remote villages further compounds the challenge of connectivity, serving as a disincentive for telecom operators to invest in these areas. As a result, there are still 47 districts identified by OoTR as unserved and underserved areas in which more than 60 percent of the population live17. Connecting remote villages and improving the performance of existing networks will allow Samoan citizens to access not only essential government services and information but also telehealth and online educational resources. Broadband access can further enhance market access, enabling residents of remote villages to sell fresh produce through e-commerce and seek other economic opportunities. (b) The Samoa National Broadband Highway (SNBH), GoS’s intranet used by around 27 government ministries and agencies, schools and hospitals, and the government datacenter have reached their capacity and need to be replaced.18 Since launching in 201419, SNBH has been serving as a critical infrastructure enabling the various agencies of government to connect to a central, “closed�20 network. The SNBH equipment is already at its end of life and needs to be replaced. To the extent that the SNBH implementation stimulated private sector investment in the sector, the SNBH intervention can be seen to have performed a valuable role and delivered material gains. Furthermore, the GoS’s datacenter, which is expected to host the digital ID system has also exceeded its capacity and has frequent electricity outages, resulting in services being impacted. (c) Cybersecurity is a growing concern with Samoa’s increasing reliance on digital technologies , necessitating further investments and capacity building to strengthen the country’s resilience. As a nation with an estimated 132,00021 active users on social media, the country has seen a rapid rise in risks related to cyberbullying, identity theft and online exploitation of youths (particularly females). Despite the scarcity of cyber-related data in Samoa, the rise of cyberattacks in the country corresponds with regional trends. In the first quarter of 2023 the Asia Pacific region had a 16 percent year-on-year surge in weekly attacks per 13 According to GoS, around 98 percent of the population have 4G mobile broadband coverage; Telegeography figures show that the population penetration for mobile subscriptions stands at 49.7%, which is less than the regional average of 74.15%. 14 Same as above. Regional average is the average of PIC-9 excluding Nauru, Marshall Islands and the Federated States of Micronesia. 15 Telegeography data for total fixed broadband subscriptions as of June 2023. 16 Speed at 100mbps and capped at 45GB, which throttles to 1mbps once data cap is exceeded. 17 Based on 2021 census data on population by location from the Samoa Bureau of Statistics and MCIT’s list provided to the WB ta sk team on underserved and/or unserved areas. 18 https://china.aiddata.org/projects/37695/ 19 Financed by US$20m loan from the Export-Import Bank of China. SNBH is a 6km fiber ring, and a wireless transmission network. 20 SNBH does not provide internet to its users. 21 https://datareportal.com/reports/digital-2022-samoa Dec 22, 2023 Page 5 of 10 The World Bank Digital Samoa Project(P180807) organization.22 GoS’s data networks and storage solutions also require increased cybersecurity measures. In the first quarter of 2023, globally, the education/research sector was hit the hardest with the highest number of attacks, followed by government/military sector and healthcare23, which all fall within priority sectors of GoS. Globally, the cost of cybercrime incidents is expected to climb from US$11.50 trillion to more than US$23 trillion between 2023 and 2027.24 Samoa has enhanced its security posture through the development of the nation’s first National Cybersecurity Strategy in 2016 and the inauguration of the nation’s first National Computer Emergency Response Team (SamCERT). However, findings from International Telecommunication Union (ITU)’s Global Cybersecurity Index (2020) indicate that Samoa still lacks cybersecurity-specific legislation such as on cybercrimes and cybersecurity, which are essential in building trust in the digital economy. Samoa has one of the highest prevalence of bullying according to a study which indicated that around 79 percent of males and 70 percent of females experienced bullying.25 Though sex-disaggregated cybercrimes data is limited in Samoa also due to lack of legal provisions to collect this type of data, studies on youth population in the Pacific show that women tend to report higher rates of emotional victimization.26 Relationship to CPF 9. The proposed Project is fully aligned with and significantly contributes to the World Bank and the Pacific Regional Partnership Framework (WB-RPF)27 and the World Bank’s strategy in East Asia Pacific. The Project incorporates recommendations from the Performance and Learning Review of the Regional Partnership Framework which extended the WB-RFP to FY232829. The Project will be implemented in parallel with Samoa Finance for Growth (P181456) which seeks to establish the enabling environment for national digital ID. Furthermore, the development objectives of the Project are aligned with WB’s EAP regional strategy in building resilience and sustainability as well as WB-RPF and will be an enabler for all focus areas of: (a) fully exploiting available economic opportunities, (b) enhancing access to employment opportunities, (c) protecting incomes and livelihoods and (d) strengthening the enablers of growth opportunities. Overall, the Project will support the World Bank’s mission of poverty alleviation on a livable planet. 10. The proposed project also meets the Bank’s criteria for the Global Challenge Program: Accelerating Digitization. In particular, the Project objectives align strongly to focus area 1: Affordable Quality Broadband, Data Hosting and Devices and Focus Area 4: High-Impact Digital Services. 11. The Project design also reflects the recommendations of the Regional Systematic Country Diagnostic, specifically on the investment focus on the Green Resilient Inclusive Development 30 agenda and strengthening 22 APAC region experienced 1,835 attacks per week per organization in the first quarter of 2023 according to Check Point Software Technologies Ltd. See https://blog.checkpoint.com/research/global-cyberattacks-continue-to-rise/. 23 Check Point Software Technologies Ltd. (2023). “Global Cyberattacks Continue to Rise with Africa and APAC Suffering Most.� April 27. https://blog.checkpoint.com/research/global-cyberattacks-continue-to-rise/ 24 Fleck, Anna. 2022. “Cybercrime Expected to Skyrocket in Coming Years�. December 2. https://www.statista.com/chart/28878/expected-cost-of-cybercrime-until- 2027/ 25 Biswas, T., Scott, J. G., Munir, K., Thomas, H. J., Huda, M. M., Hasan, M. M., ... & Mamun, A. A. (2020). Global variation in the prevalence of bullying victimisation amongst adolescents: Role of peer and parental supports. EClinicalMedicine, 20. 26 See Hishinuma, E. S., Chang, J. Y., Goebert, D. A., Helm, S., Else, I. R., & Sugimoto-Matsuda, J. J. (2015). Interpersonal youth violence perpetration and victimization in a diverse Asian American and Pacific Islander adolescent sample. Violence and victims, 30(2), 225-249; How Common Is Cyberbullying Among Adults? Exploring Gender, Ethnic, and Age Differences in the Prevalence of Cyberbullying 27 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). 28 Nine Pacific Island Countries (PIC9) Regional Partnership Framework Performance and Learning Review (Report Number: 145750-EAP; presented to the Board on February 6, 2020. 29 The task team will closely monitor the developments of the upcoming WB-RPF covering FY25 through FY29 and reflect its recommendations into the Project. 30 https://www.devcommittee.org/sites/dc/files/download/Documents/2021-03/DC2021-0004%20Green%20Resilient%20final.pdf Dec 22, 2023 Page 6 of 10 The World Bank Digital Samoa Project(P180807) the resilience of the country.31 The Project is also aligned with the goals in the “Pathway for the Development of Samoa (PDS) FY2021/22 to FY2025/26�32 and “Samoa’s Digital Pathway: Digital Transformation Strategy 2023- 2030� which will be launched in FY24. The activities proposed in the Project support in building both enablers and safeguards of the digital economy. 12. The proposed project is consistent with Samoa’s Nationally Determined Contribution (NDC) 2021 and the goals of the Paris Alignment33 in which the country seeks to reduce greenhouse gas (GHG) emissions in the energy sector by 30 percent and in the waste sector by 4 percent in 203034. Although the NDC does not make explicit statement on the digital/ICT sector, Samoa aims to achieve the NDC by reaching 100 percent renewable electricity generation (within the energy sector) by 2025. Furthermore, one of the goals of the PDS is to transition to solar, wind and hydropower to achieve 70 percent renewable energy by end of 2031. Samoa’s National Waste Management Strategy also focuses on improving the management of e-waste. The project will contribute to these objectives on mitigation by integrating energy efficiency measures in the deployment of Fiber-to-the-premise (FTTP) and SNBH and by identifying renewable energy solutions to power the infrastructure that will be built and upgraded. The upgrade and expansion of existing government data center might increase GHG emissions and present barriers to the country’s transition to low-GHG emissions. The project will incorporate relevant risk measures to reduce GHG emissions (such as by integrating a Technical Assistance to assess and determine energy efficiency standards and energy specifications, with the aim to improve energy performance levels by 20%) and meeting best international practices on ‘greening’ the data center. With these measures incorporated, carbon lock-in and transition risks are expected to be reduced to low, given that the data center is fully electrified. On adaptation and resilience, “coastal and inland infrastructure� is one of the key focus areas mentioned in Samoa Climate Change Policy 202035 for implementing climate resilience measures to reduce the impact of climate- related events. Nearly 70 percent36 of the population and infrastructure are in low-lying coastal areas that are extremely vulnerable to climate change impacts such as floods, tropical cyclones, intense rainfall, storm surges etc. These climate hazards threaten the project’s physical investments such as the middle and last mile fiber optic networks, communication towers, data center, etc. The project will reduce these adaptation risks to an ‘acceptable’ level by deploying climate-resilient fiber optics and integrating relevant adaptation measures in the digital infrastructure and data center upgrade. It will also add redundancy to the government intranet and the national broadcaster which are critical communication infrastructure needed to respond to climate events and disasters, thereby contributing to Samoa’s resilience to climate change impacts. Specific climate adaptation, mitigation and resilience measures will be detailed during project appraisal. C. Proposed Development Objective(s) To increase resilient, inclusive and safe access to broadband and enhance the capacity of the Recipient to deliver digitally enabled public services. 31 Gould, David M. (ed.); Wai-Poi, Matthew (ed.). 2023. Growth and Resilience: Pacific Islands Systematic Country Diagnostic Update, January 2023. © World Bank, Washington DC. http://hdl.handle.net/10986/39707 32 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. 33 Samoa’s Second Nationally Determined Contribution (2021). https://unfccc.int/sites/default/files/NDC/2022- 06/Samoa%27s%20Second%20NDC%20for%20UNFCCC%20Submission.pdf 34 According to “Samoa’s second National Determined Contribution� report, compared to 2007 levels (or by 53 Gg CO2e compared to the new reference year levels once the GHG emissions inventory is updated. 35 Samoa Climate Change Policy 2020 36 https://www.adaptation-undp.org/explore/polynesia/samoa Dec 22, 2023 Page 7 of 10 The World Bank Digital Samoa Project(P180807) Key Results (From PCN) a) Increase resilient37, inclusive38 and safe access to broadband • Villages passed with FTTP (village) • People living in under- or unserved communities (as defined by OoTR) provided with access to Internet (number) (disaggregated by gender) • Development of a legislative framework aligned with the Budapest Convention on Cybercrime and Lanzarote Convention (yes/no) b) Enhance the capacity of the Government of Samoa to deliver digitally enabled39 public services • Increased capacity of the government Intranet network (Gbps) • Speed (Mbps) of entry level fixed broadband service (number) D. Concept Description 13. The total Project financing is a US$20.05 million IDA grant. The first component, “Investments in Digital connectivity and Digital Government Infrastructure� (US$16.55 million), implemented by the Ministry of Communications & Information Technology (MCIT), aims to support the development of climate and disaster- resilient national digital connectivity infrastructure. The component will seek to mobilize private capital to the extent possible to optimize efficient allocations of resources and utilize private sector expertise to address bottlenecks in different parts of the connectivity value chain. The component is divided into four subcomponents. The first subcomponent provides a US$3.05 million grant to finance the purchase of software, hardware, and license to expand the coverage and improve the performance and capacity of SNBH, thereby connecting more government agencies to SNBH and securing cross-government data exchange for government services including the anticipated national digital ID. The subcomponent also includes activities to support the capacity building of SamCERT in securing the SNBH network. The second subcomponent provides a US$10.5 million grant to extend last mile connectivity for unserved and underserved areas, leveraging the SNBH backbone and green technologies to bridge the digital divide and encourage private sector participation. The third subcomponent provides a US$1.5 million grant to rollout broadband pilots in unserved or underserved communities, also to demonstrate the value of broadband connectivity and promote the growth of the digital economy. The fourth subcomponent provides a US$1.5 million grant to upgrade the Government data center with an option of migrating to a cloud computing platform. The subcomponent will also help in establishing an Internet Exchange Point within the data center to reduce the latency of connections between networks. 14. The second component, “Institutional Strengthening for enabling environment for digital economy�, is a US$3.5 million grant to support capacity building of MCIT and the Office of the Regulator (OoTR) and comprises two subcomponents. The first subcomponent is a US$2 million grant to support OoTR in maintaining and enhancing regulatory oversight of the telecommunications sector. The subcomponent prioritizes training, equipment procurement and policy review. The subcomponent will also support MCIT in carrying out a review of outdated sector polices and legislations with a view to helping to establish policies and regulation for secure and resilient digital government and digital economy. The second subcomponent is a US$1.5 million grant that comprises 37 See definition in para. 3 38 Defined as the situation where everyone in society can participate in the information society. 39 Digitally enabled public services refers to the provision of public services using digital technologies wherein the interaction with a public sector organization is mediated by an IT system. Dec 22, 2023 Page 8 of 10 The World Bank Digital Samoa Project(P180807) technical assistance and capacity building for SamCERT and rollout of a cybersecurity awareness program at the community level. 15. Overall Risk. Substantial, given substantial risks in technical design, institutional capacity for implementation, and fiduciary/procurement. The implementing agencies are familiar with the modalities of executing Bank projects and the previous experience. However, limited capacity could increase the risks of delays and non-compliance with bank processes. Preparatory assessments undertaken to support the design of components will reduce risks of delays in implementation. @#&OPS~Doctype~OPS^dynamics@legalpolicyandscreeningrisk#doctemplate Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Area OP 7.60 No Summary of Screening of Environmental and Social Risks and Impacts @#&OPS~Doctype~OPS^dynamics@contactpoint#doctemplate CONTACT POINT World Bank Shivnesh Roynendra Prasad Digital Development Specialist Ji Eun Choi Senior Digital Development Specialist Borrower/Client/Recipient Ministry of Finance Sao'leititi Maeva Betham-Vaai, CEO, Maeva.BethamVaai@mof.gov.ws Implementing Agencies Office of the Regulator Lematua Gisa Fuatai Purcell, CEO and Regulator, regulator@regulator.gov.ws Ministry of Communications & Information Technology Lefaoalii Unutoa Auelua-Fonoti, Chief Executive Officer , u.auelua-fonoti@mcit.gov.ws FOR MORE INFORMATION CONTACT Dec 22, 2023 Page 9 of 10 The World Bank Digital Samoa Project(P180807) The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects @#&OPS~Doctype~OPS^dynamics@approval#doctemplate APPROVAL Task Team Leader(s): Shivnesh Roynendra Prasad, Ji Eun Choi Approved By Practice Manager/Manager: Country Director: Stephen N. Ndegwa 22-Dec-2023 Dec 22, 2023 Page 10 of 10