Papua New Guinea: Town Electrification Investment Program - Tranche 2

Energy / Electricity transmission and distribution

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.

In PNG, grid-connected power is still largely restricted to the main urban areas. By the end of 2015, approximately 12% of the overall population had access to electricity. The majority of provincial centers are supplied entirely through diesel generation, resulting in high generation costs but still with a low quality of power supply. Lack of access to affordable and reliable power is limiting economic growth in provincial centers.

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.

Under tranche 2, 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.

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.

PPL rehabilitates two aging hydropower plants to bring them back to their rated capacity of 28.0 MW

Capacity building undertaken for implementing agency and project beneficiaries

The PMU renders efficient project management services

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.