41504-025: Town Electrification Investment Program - Tranche 2 | Asian Development Bank

Papua New Guinea: Town Electrification Investment Program - Tranche 2

Sovereign (Public) Project | 41504-025 Status: Active

The Asian Development Bank is working with Papua New Guinea on a program to deliver reliable and affordable power supplies to provincial centers. The second tranche will rehabilitate two existing hydropower plants and build another run-of-river plant, allowing provincial centers to cut diesel use and power costs. Only about 12% of the population had access to grid-connected power as of end-2015.

Project Name Town Electrification Investment Program - Tranche 2
Project Number 41504-025
Country Papua New Guinea
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3544-PNG: Town Electrification Investment Program - Tranche 2
Ordinary capital resources US$ 55.90 million
Loan 3545-PNG: Town Electrification Investment Program - Tranche 2
concessional ordinary capital resources lending / Asian Development Fund US$ 5.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector

Energy / Electricity transmission and distribution

Gender Equity and Mainstreaming Some gender elements

The components proposed for financing under the requested PFR are:

Component 1: Rehabilitation of two hydropower plants: (i) Yonki Toe of Dam (YTOD) hydropower plant, and (ii) Warangoi hydropower plant, which are currently operating below their full capacities. After rehabilitation, these plants will be capable of operating at their rated capacity of 28.0 MW-18 MW YTOD, and the 10 MW Warangoi plant. Moreover, the proposed rehabilitation will extend the economic life of these plants by another 20 to 25 years and ensure that they are brought to current standards.

Component 2: Construction of Ramazon run-of-river small hydropower plant with a preliminary capacity of 3 MW. The project will include construction of a (i) concrete weir, (ii) 5 km pipeline, (iii) penstock, (iv) powerhouse, and (v) new access road from the existing road to the powerhouse and internal roads within the project area.

Project Rationale and Linkage to Country/Regional Strategy

On 25 November 2010, ADB approved a multitranche financing facility (MFF) of $120.0 million comprised of Asian Development Fund (ADF) and ADB ordinary capital resources (OCR) for the Town Electrification Investment Program (TEIP). The government contributed $30.0 million to help finance the total program cost of $150 million. Afterwards, on 6 December 2010, ADB approved the tranche 1 of the facility, consisting of (i) $16.4 million in ADF financing, (ii) $40.9 million in OCR financing, and (iii) $14.3 million of government counterpart contribution, for a total tranche 1 cost of $71.6 million. Lastly, on 9 December 2015, ADB approved the administration of a grant not exceeding NZ$7.0 million (equivalent to $4.8 million) from the Government of New Zealand as additional financing for tranche 1. The MFF availability period has been extended up to 30 June 2020.

PNG has significant underutilized indigenous renewable energy sources, particularly hydropower and solar, for which the generation costs of energy are considerably lower than that of diesel. The TEIP is assisting PNG to meet the MFF outcome of improved utilization of reliable and clean power in provincial urban centers by supporting the development of least-cost renewable energy sources to (i) improve the reliability and quality of power supply in order to stimulate economic growth; and (ii) replace diesel generation, thereby reducing power generation costs and creating incentives to improve access rates. The TEIP also supports the extension of the distribution grid to increase access to electricity in the provinces.

In addition to tranche 1 and its additional financing, the government seeks ADB financing for (i) refurbishment of two existing hydropower plants; and (ii) construction of the Ramazon hydropower plant, consisting of a 3 megawatt (MW) run-of-river hydropower plant.

The government is expected to submit the periodic financing request (PFR) for tranche 2 the final tranche under the MFF by the end of August 2016 which summarizes the analysis and due diligence completed. The proposed tranche 2 will support the objectives of the MFF by improving the use of reliable, clean power in the provincial urban and peri-urban centers. The existing project management unit (PMU) under tranche 1 will be responsible for the implementation of tranche 2. The proposed tranche 2 is included as a firm 2016 project in the ADB country operations business plan, 2016-2018.

Impact Improved economic condition of the population in the targeted provincial centers.
Project Outcome
Description of Outcome Improved utilization of reliable, clean power to three provincial urban centers.
Progress Toward Outcome

2018 July: YTOD and Waronggoi contracts concluded and ready for signing.

2018 September: The implementation progress of the Project is slow. Since effectiveness of the Project, a construction supervision consultant contract, with a value of about $1.89 million has been signed. Moreover, two out of three small hydro power turnkey contracts under the Project, with a total value of $32.95 million are ready for signing. However, no disbursement has been made and the two award-ready contracts have not been able to be signed, because the SLA has not been signed, which is the condition for disbursement of loan proceeds.

Implementation Progress
Description of Project Outputs

PNG Power Ltd (PPL) rehabilitates three aging hydropower plants to bring them back to their rated capacity of 28.0 MW

PPL constructs and connects to the grid 3.0 MW of hydropower capacity

Capacity building is undertaken for implementing agency and project beneficiaries

The Project Management Unit renders efficient project management services.

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

YTOD and Waronggoi contracts concluded and ready for signing.

To be assessed later.

To be assessed later.

For the Romazaon contract, the JV issue has been resolved, but has delayed the signing.

Too early to determine.

Too early to determine.

Too early to determine.

Too early to determine.

Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Broad stakeholder consultation was undertaken during project design, inlcluding Government officials (national, provincial, and local), landowners, development partners and NGOs.
During Project Implementation Stakeholder consultation will continue during project implementation.
Responsible ADB Officer Lee, Woo Yul
Responsible ADB Department Pacific Department
Responsible ADB Division Transport, Energy and Natural Resources Division, PARD
Executing Agencies
Energy Division of the Department of Petroleum and Energy
P.O. Box 494
Waigani, NCD
Papua New Guinea
Concept Clearance -
Fact Finding -
MRM 28 Sep 2016
Approval 04 Jul 2017
Last Review Mission -
Last PDS Update 26 Sep 2018

Loan 3544-PNG

Approval Signing Date Effectivity Date Closing
Original Revised Actual
04 Jul 2017 19 Jul 2017 12 Oct 2017 30 Jun 2020 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 55.90 Cumulative Contract Awards
ADB 55.90 04 Jul 2017 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 04 Jul 2017 0.06 0.00 0%

Loan 3545-PNG

Approval Signing Date Effectivity Date Closing
Original Revised Actual
04 Jul 2017 19 Jul 2017 12 Oct 2017 30 Jun 2020 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 20.70 Cumulative Contract Awards
ADB 5.00 04 Jul 2017 1.88 0.00 37%
Counterpart 15.70 Cumulative Disbursements
Cofinancing 0.00 04 Jul 2017 0.00 0.00 0%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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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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Tender Title Type Status Posting Date Deadline
L3544/3545 (COL) – PNG: Town Electrification Investment Program – Tranche 2 [WHRP-ICBV1-02/17-TEIP2-W02] Invitation for Bids Closed 25 Aug 2017 16 Feb 2018
41504-PNG: Town Electrification Investment Program – Tranche 2 [YTOD-ICBV1-01/17-TEIP2-W01] Invitation for Bids Closed 14 Jul 2017 13 Oct 2017

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
PROJECT SUPERVISION CONSULTANT Loan 3545 08 Jan 2018 MULTICONSULT ASA NEDRE SKOYEN VEI 2, 0276 OSLO NORWAY Energy Division of the Dept of Petroleum & Energy CONSULTANCY 1,894,974.00 1,983,582.00

Procurement Plan

None currently available.