Chinese government provides grant to Chuuk State (Micronesia) to fund road improvements

On March 11, 2020, the 21st Congress of the Federated States of Micronesia approved a resolution (C.R. No. 21-128, C.D. 1) allocating grant funds previously committed by the Chinese government to the Chuuk State for road improvements. Per the resolution, more than USD 20 million in Overseas Development Assistance - potentially including Chinese government grants - for road improvement projects had previously been allocated to Chuuk on an unspecified date. However, the project in Chuuk for which these funds were allocated "was never consummated or implemented." It is unknown if the new amount allocated is USD 20 million, or a different amount. The specific road improvement project(s) to be financed via the funds allocated in March 2020 are unknown. It is also unknown whether the funds were committed via one large grant from the Chinese government, or via multiple grants with discretionary elements.

Additional details

1. This project may be funded via one or several Economic and Technical Cooperation Agreements (ETCA). This is for several reasons. First, the resolution itself references "grants" (plural) from the Chinese government that are being pulled from. Second, grants that are unallocated or partially allocated when committed, but later allocated to specific infrastructure projects, are a common financing mechanism associated with ETCAs. Third, there are several ETCAs that were signed by FSM and China for which no evidence about their subsequent allocation exists. However, there is no direct evidence linking this project to a particular ETCA. This issue warrants further investigation. 2. There is a risk that the grant captured in this project is being double counted if the original grant from the Chinese government is both (1) in the TUFF dataset and (2) not coded as an umbrella project. However, the chance that the funds referenced were granted via an ETCA (which AidData codes as umbrella projects) is fairly high. Further, if this projects was not funded via an ETCA or similar umbrella grant, AidData cannot identify a project in the TUFF database that is a uniquely likely candidate for the provision of the original funds: a non-ETCA grant which is related to infrastructure construction/sufficiently general to include infrastructure construction, but which is also unallocated to a specific project and/or allocated to a Kosrae State or infrastructure project that never took place. Project ID#69215 and ID#67602 are the only two projects that meet these criteria, and the former is a grant of only 250,000 USD from 2005, while the later is very likely an ETCA. As such, there is a sufficiently low chance that these grant funds are being double counted that this project can be recommended for aggregates. 3. Similar allocations of past unused grant funding can be found in Project ID#90074 and #900073.

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