Non Project Grant Aid

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Non Project Grant Aid

  1. 1. Japan non-project grant aid<br />
  2. 2. JICA Non-Project Grant Aid<br />Project overview<br /><ul><li>Exchange of Notes signed on Jan. 21, 2009 between Japan and FSM
  3. 3. Japan to provide 200MYen (1,953k$) Grant to FSM
  4. 4. FSM to purchase products to mitigate its economic difficulties
  5. 5. Procurement agent to be employed by FSM for product procurement
  6. 6. Transaction of the fund usage should be reported to Japan
  7. 7. FSM to establish “Counterpart Account (C/A)” separately
  8. 8. All proceeds from sales of products should be deposited
  9. 9. Total deposit amount ≥ Half of 200MYen
  10. 10. Deposit should be made within 3 years
  11. 11. Usage of C/A fund should be consulted among both countries
  12. 12. “Consultative Committee” to discuss matters raised on Exchange of Notes</li></li></ul><li>Utilization program (Memo of Understanding)<br />JICA Non-Project Grant Aid<br /><ul><li>All foreign grants to be equally benefited to four states (Constitution) + National Government
  13. 13. Petroleum Corporation (FSMPC) to coordinate all processes as executing agent
  14. 14. FSM decided to purchase “Diesel” to mitigate difficulties of energy sector
  15. 15. Funds to be used based on “Four Initiatives”</li></ul>Reduce long-term liabilities of FSMPC <br /><ul><li>Early release of government guarantee</li></ul>Establish minimum oil storage reserves of four states<br /><ul><li>Minimize domestic price volatility</li></ul>Implement structural cost reduction programs<br /><ul><li>Pass on sustainable price savings to consumers</li></ul>Implement an Electricity Sector Relief Package<br /><ul><li>Strengthen ability of utilities to manage volatile oil prices</li></li></ul><li>Product PURCHASE<br />Total Grant Fund: 1,953.3k$<br />Crown Agent’s Fee: 58.4k$<br />Product Purchase Limit: 1,894.8k$<br />Shipment:<br />
  16. 16. Progress status (as of OCT. 14, 2010)<br />All JNPGA fund already drawn at August end, 2010<br />Agent fee: 58.4 (k$)<br />Diesel (CIF): 1,894.8<br />Total: 1,953.3 (= 200MYen)<br />Interest saving benefit for FSMPC<br />1,894.8 x 7.5%p.a. x 1/12 = 11.8 k$/mo.<br />Usage of diesel stock (FOB: 1,444.6k$) <br />Deposit to Counterpart Account (C/A): 722.3 - 1,444.6*<br />Remainder to be handled by States: 722.3 - 0.0<br /> total: 1,444.6 - 1,444.6*<br />Next step action<br />FSM to establish C/A at Bank<br />FSM to develop Depositing plan through Jan. 2012<br />FSM to decide C/A fund utilization<br />Need to consider “equal benefit”<br />Fund utilization to be discussed with Japan<br />(* FSMPC’s handling fee to be deducted)<br />

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