47356-002: Power Sector Development Investment Program | Asian Development Bank

Papua New Guinea: Power Sector Development Investment Program

Sovereign (Public) Project | 47356-002 Status: Proposed

The government has requested ADB to finance the investment program to support the government's target of 70% of household's electrification by 2030. The proposed investment program is in line with ADB's Country Partnership Strategy (2016-2020) which prioritize energy as key area of support in renewable energy generation, improving transmission and distribution efficiencies and its expansion to peri-urban areas. The proposed investment program will respond to government's national development and sector strategies by promoting sustainable development in peri urban and rural areas and by increasing the grid penetration from 12% to approximately 19% by 2028 and replacing diesel generation with renewable energy sources in provincial centers. The investment program will also enhance operational efficiency of PPL and address institutional capacities, policy framework and facilitate private sector mobilization in off-grid areas.

Project Details

Project Officer
Haider, Syed Hussain Pacific Department Request for information
Country
  • Papua New Guinea
Sector
  • Energy
 
Project Name Power Sector Development Investment Program
Project Number 47356-002
Country Papua New Guinea
Project Status Proposed
Project Type / Modality of Assistance Grant
Loan
Technical Assistance
Source of Funding / Amount
Loan: Power Sector Development Program
Ordinary capital resources US$ 572.00 million
concessional ordinary capital resources lending / Asian Development Fund US$ 40.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Energy / Energy sector development and institutional reform

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The government has requested ADB to finance the investment program to support the government's target of 70% of household's electrification by 2030. The proposed investment program is in line with ADB's Country Partnership Strategy (2016-2020) which prioritize energy as key area of support in renewable energy generation, improving transmission and distribution efficiencies and its expansion to peri-urban areas. The proposed investment program will respond to government's national development and sector strategies by promoting sustainable development in peri urban and rural areas and by increasing the grid penetration from 12% to approximately 19% by 2028 and replacing diesel generation with renewable energy sources in provincial centers. The investment program will also enhance operational efficiency of PPL and address institutional capacities, policy framework and facilitate private sector mobilization in off-grid areas.

The impact of the program will be improved socio economic conditions and aligned with PNG Vision 2050. The outcome will be a consumption to clean and reliable power supply in the investment program areas improved. This will be achieved through following outputs: (i) transmission network strengthened and expanded in three main grid areas, (ii) distribution network expanded, (iii) renewable energy for provincial grids increased, (iv) capacity of monitoring system enhanced, (v) private sector investments in rural electrification mobilized, and (vi) Institutional support and capacity of EA/IAs, program beneficiaries and stakeholders enhanced.

Project Rationale and Linkage to Country/Regional Strategy About 12% of PNG's population has access to electricity, but grid penetration in provincial capitals is less than 4% with negligible access to electricity in rural areas. PNG' per capita consumption ratio of electricity is also one of the lowest in the world. Geographical spread coupled with rugged terrain and very thin population density, makes it more challenging to develop rural electrification infrastructure in the country. PNG has a total 600 megawatt (MW) of installed capacity generated by hydropower (40%), diesel (38%), gas fired (14%), and geothermal (8%). Out of the total generating capacity, 320 MW is managed by PNG Power Limited (PPL), the only government utility company responsible for the electricity generation, transmission and distribution. The remaining 280 MW is generated by the mining industry as captive power stations for their own consumption. There is no national grid in PNG, and therefore, the country is powered by three main grids (Port Moresby, Ramu and Gazelle) operated by PPL which only serves the main urban centers. In addition to these three main grids, provincial capitals are powered by inefficient loss making diesel based isolated grids (19 in total) which leaves no incentive for PPL to expand the grid further into rural areas.
Impact Improved socio economic conditions and poverty reduction through increased utilization of clean and reliable electricity
Outcome Consumption of clean and reliable power supply in the program areas improved.
Outputs

Transmission network strengthened and expanded

Distribution network expanded

Renewable energy for provincial grids increased

Capacity of PPL monitoring system enhanced

Private sector investments in rural electrification mobilized

Institutional support and capacity of EA/IAs, program beneficiaries and other stakeholders enhanced.

Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Haider, Syed Hussain
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
Timetable
Concept Clearance 13 Oct 2017
Fact Finding 18 Jun 2018 to 29 Jun 2018
MRM 26 Jul 2018
Approval -
Last Review Mission -
Last PDS Update 29 Sep 2017

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