Papua New Guinea : Improved Energy Access for Rural Communities

Energy /

In Papua New Guinea (PNG), approximately 10% of the population has access to electricity. Lack of access to affordable, reliable power is limiting economic growth in provincial centers, and contributing to poverty in rural areas. Access to electricity is even lower in the provincial urban centers and virtually non-existent in rural areas. Low access rates in rural areas is primarily due to (i) difficult geographical access conditions, (ii) lack of generation capacity in the Provincial centers to allow grid extension, (iii) high cost of diesel power generation in the isolated Provincial urban centers providing a disincentive to PNG Power to connect additional customers due to the uniform national tariff, (iv) high cost of extending distribution systems due to lack of suitable contractors in the provinces, and (iv) low level of Government grant funding of distribution connections .

PPL is currently implementing Tranche 1 of the Town Electrification Investment Program, which is increasing the supply of clean energy (predominantly hydropower) to three provincial centers (Popondetta in Northern Province, Kimbe in West New Britain and Buka in the Autonomous Region of Bougainville). This will (i) provide additional generation capacity to allow extension of supply to unserviced rural customers, and (ii) reduce the cost of power generation by replacing high cost diesel generation with low cost hydropower. The Town Electrification Investment Program will also construct transmission lines along main population corridors to connect the hydropower sites and the main urban areas, thereby substantially reducing costs required to connect rural communities along the alignment. Therefore, the Town Electrification Investment Program is supporting core power sector infrastructure in a number of provinces which provides the basis for increasing access to power for rural communities located along the main transmission corridors.

However, although the Town Electrification Investment Program is constructing the core transmission network, power distribution construction (low voltage connections to villages) in the Provinces is still prohibitively expensive due to isolation of the power grids and lack of qualified local contractors. Additionally, sustainability of infrastructure development in rural PNG faces ongoing issues related to lack of community ownership from local landowners. Government budget allocation for grid extension has been inadequate to significantly impact the low rural access rate. During the initial design phase of Town Electrification Investment Program, the Government recognized the opportunity to expand access to energy among rural communities along the proposed transmission lines, and therefore requested ADB to support trialing of implementation models such as community based civil works contracts to lower the cost of implementation and improve community ownership. The Government requested the trialing in 3 Provinces to demonstrate the impact in a range of different geographical and cultural settings . If successful, PPL and the Government have proposed to replicate the model in other PNG Provinces through upscaled grant financing. Project cost estimates have been based on preliminary community surveys. Detailed design will be conducted prior to project implementation. Preliminary estimates have indicated that rural communities will benefit financially from replacing expensive kerosene lighting and self generation (small diesel generators) with higher quality distributed electricity . Initial surveys have indicated a high capacity and willingness to pay for power services; however site surveys prior to community selection will confirm willingness to pay.

Livelihoods for rural communities in PNG provinces has improved

PPL has increased access to power for rural communities

1. PPL extends power distribution grid to rural communities

2. PPL trials community based civil works contracts for powerline construction

3. Community capacity building undertaken to improve productive utilization of electricity

1) PPL extends power distribution grid to rural communities:

All power equipment have been delivered to project sites. Household (HH) connections including schools and health facilities are ongoing in the three project sites;

i) Popondetta- 537/1643 households connected and energized.

ii) Kimbe- 513/1661 households connected and energized.

iii) Buka- 424/988 households connected and energized.

2) PPL trials community based civil works contracts for powerline construction:

About 426 community based civil works contracts issued to about 5,579 recipients (approx 42% are women) and work is ongoing for all 3 target provinces:

i) Popondetta- 119 CBC contracts

ii) Buka- 61 CBC contracts

iii) Kimbe- 246 CBC contracts

3) Community capacity building undertaken to improve productive utilization of electricity:

Safe Electricity training was conducted for about 4000 people in the 3 project communities and also a financial literacy training was conducted for 67 people with HIV/AIDS training conducted for 3,769 people. About 42% were women who participated in these trainings.