Projects of Policy and Regulation Sector

2021 Nauru Water and Electricity Tariff Study

Organization: DHInfrastructure


As part of the Asian Development Bank's (ADB) ongoing Solar Power Development Project (Grant 0664-NUA) in Nauru, DHInfrastructure's Brendan Larkin-Connolly was hired by the Nauru Utilities Corporation (NUC) to examine the prevailing policies and utility service's tariffs for water and electricity services and prepare recommendations for tariff regulation reforms to sustain NUC financial sustainability. Specifically, NUC wanted to better understand how the addition of the ADB funded 6 MW solar PV and battery energy storage system (BESS) project would impact the level tariffs need to be set at to achieve cost recovery in the future. This project built off DHInfrastructure's prior assignment with NUC as part of the ADB Technical Assistance (TA), TA-8475 NAU: Tariff and Subsidy Policy Reform project that was carried out from 2015 to 2016.

Service Provided

The project was carried out over two phases. Phase One included (a) updating the NUC revenue requirement model and linked documents; (b) preparing a cost reflective tariff methodology and tariff petition guidelines for use by NUC; (c) updating tariff structure with differentiated tariff by class; and (d) developing tariff and regulation recommendations for NUC with a set of policy action items. Phase Two focused on the support to the government of NUC and included consultations with the NUC Board of Directors and other government stakeholders to discuss the proposed recommendations.