Papua New Guinea: Port Moresby Power Grid Development Project

Sovereign Project | 43197-013 Status: Approved

Summary

ADB is helping Papua New Guinea boost access to reliable electricity in its largest urban center, Port Moresby. The project will upgrade and extend the transmission and distribution grid, improve substation capacity, and upgrade and rehabilitate two hydropower plants. It will also assist power grid operator PNG Power limited in expanding renewable energy generation and improve services.

Latest Project Documents

Consulting Notices See also: CMS

No notices are currently available for this project.

Procurement Notices See also: Operational Procurement

No notices are currently available for this project.

Procurement Documents


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Project Name Port Moresby Power Grid Development Project
Project Number 43197-013
Country Papua New Guinea
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2998-PNG: Port Moresby Power Grid Development Project
Ordinary capital resources US$ 51.70 million
Loan 2999-PNG: Port Moresby Power Grid Development Project
Asian Development Fund US$ 15.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change
Sector / Subsector

Energy - Electricity transmission and distribution

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The proposed Port Moresby Grid Development Project will upgrade and extend the transmission and distribution grid in the national capital, Port Moresby, thereby improving the reliability and quality of power supply to the main urban center in Papua New Guinea (PNG), improving the energy efficiency of power delivery, and enabling delivery of essential power to rapidly expanding areas of Port Moresby. A project preparation technical assistance (PPTA) will be undertaken for the due diligence of the proposed project.
Project Rationale and Linkage to Country/Regional Strategy In Papua New Guinea (PNG), power grids are restricted to urban areas, and supply is often unreliable and represents a high percentage of household expenditure. In Port Moresby, power outages are becoming increasingly frequent due to insufficient generation and undersized and poorly maintained transmission and distribution systems. Because of the unreliability of the power supply, there is considerable self-generation and back-up generation capacity in the urban areas, which is maintained and operated at high cost and low efficiencies. Lack of access to affordable, reliable power is limiting economic growth in urban areas and constraining growth in smaller urban centers. Load forecasts for the Port Moresby power grid have increased significantly in recent years and demand is expected to rise significantly in coming years, fuelled by high economic growth associated with the proposed LNG Plant as well as continued growth in the mining sector and associated industry. Large additional generation is planned to support the expanding demand and the existing Port Moresby grid requires (i) upgrading to support the additional load, and (ii) extension to supply new industrial and residential areas. System upgrades are required to lower system losses and to improve grid efficiencies. This will result in downward pressure on tariffs due to operational efficiencies. The components of the project include upgrading and construction of substations, construction of transmission lines, and construction of distribution networks.
Impact PPL customers (residential and business) undertake more economic activities

Project Outcome

Description of Outcome Better power supply for Port Moresby
Progress Toward Outcome Detailed design for works has commenced.
Implementation Progress
Description of Project Outputs

1. PPL upgrades and rehabilitates hydropower capacity

2. PPL upgrades distribution system on Port Moresby grid

3. PPL upgrades substation capacity

4. Project management and capacity building

Status of Implementation Progress (Outputs, Activities, and Issues)

1. IA is drafting bidding documents for Rouna 1 and Sirinumu Hydropower projects in anticipation of the results framework tests. Bidding to commence in Q2 2016.

2. Yet to be implemented. Procurement stage.

3. Rebidding for Kilakila sub-station closed on 29 Feb 2016. Bid evaluation report is expected in early Q2 2016. Contract award should be made soon after.

4. Procurement training for PMU staff conducted in August 2013. PMU engineers attended hydropower training in Nov 2015 in NZ. 3 PMU staff attended safeguard training in Germany in Feb 2016.

Gender awareness training conducted by ADB Gender Consultant for PPL PMU staff in October 2014.

Consultancy contract awarded to Fichtner GMB. Civil works and Goods procurement in progress.

Geographical Location

Safeguard Categories

Environment B
Involuntary Resettlement B
Indigenous Peoples C

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation

Business Opportunities

Consulting Services Consulting firms will be engaged using the quality- and cost-based selection method with a quality cost ratio of 90:10 (considered justified due to the technical complexity of the power grid upgrades). Consultants may also be recruited through individual consultant selection (considered justified given the difficulties in finding consulting companies with the broad technical spread required, and a limited pool of consultants with required technical and country expertise). All consultants will be recruited in accordance with ADB's Guidelines on the Use of Consultants (2010, as amended from time to time). The PMU will be responsible for contracting all consulting services, equipment, and civil works.
Procurement A procurement capacity assessment was completed for PPL. It indicated that PPL has significant experience in procuring goods and services and has sufficient procurement experience and human resources to manage procurement for the project, including the preparation of bidding documents, evaluation of technical proposals, and monitoring of contract performance. The assessment found some areas that require realignment to comply with ADB systems: (i) lack of specific technical specification or bill of quantities and price schedules, (ii) bid-opening procedures, (iii) procurement method contract value thresholds, and (iv) lack of a complaints procedure. Based on this risk evaluation, the PMU will include an international procurement specialist who will train PPL staff in preparing tender documents and managing the preparation of ADB tender documents. ADB's Anticorruption Policy (1998, as amended to date) was explained to and discussed with the government, IPBC, and PPL. The specific policy requirements and supplementary measures are described in the project administration manual. PPL's asset management procedures were assessed and considered sufficient to operate and maintain the assets under the project

Responsible Staff

Responsible ADB Officer Syed Hussain Haider
Responsible ADB Department Pacific Department
Responsible ADB Division Papua New Guinea Resident Mission
Executing Agencies
Independent Public Business Corporation(IPBC)
Level 4 Pacific Place
Cnr. Musgrave Street and Champion Pde.
PO Box 320, Port Moresby, NCD

Timetable

Concept Clearance 28 Feb 2011
Fact Finding 03 Sep 2012 to 14 Sep 2012
MRM 28 Sep 2012
Approval 26 Apr 2013
Last Review Mission -
Last PDS Update 31 Mar 2016

Loan 2998-PNG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Apr 2013 01 May 2013 16 Dec 2013 31 Jul 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 68.00 Cumulative Contract Awards
ADB 51.70 26 Apr 2013 3.67 0.00 7%
Counterpart 16.30 Cumulative Disbursements
Cofinancing 0.00 26 Apr 2013 1.55 0.00 3%

Loan 2999-PNG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Apr 2013 01 May 2013 16 Dec 2013 31 Jul 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 15.00 Cumulative Contract Awards
ADB 15.00 26 Apr 2013 0.05 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 26 Apr 2013 0.00 0.00 0%
Title Document Type Document Date
Project Agreement for Port Moresby Power Grid Development Project Project/Program Agreement May 2013
Loan Agreement (Special Operations) for Port Moresby Power Grid Development Project Loan Agreement (Special Operations) May 2013
Loan Agreement for Port Moresby Power Grid Development Project Loan Agreement (Ordinary Resources) May 2013
Port Moresby Power Grid Development Project Gender Action Plans Apr 2013
Port Moresby Power Grid Development Project Reports and Recommendations of the President Apr 2013
Port Moresby Power Grid Development Project Project/Program Administration Manual Apr 2013
Port Moresby Power Grid Development Project: Procurement Plan Procurement Plans Apr 2013
Port Moresby Power Grid Development Project Concept Papers Feb 2011

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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