The Prime Minister Peter O’Neill has signed the Papua New Guinea Electrification Partnership with Australia, Japan, the United States and New Zealand, whose aim is to provide power to 70 per cent of the country’s population by 2030. Currently, only 13 per cent of PNG’s population has reliable access to electricity.
The agreement was signed with the Australian Prime Minister Scott Morrison, the US Vice-President Mike Pence, the Japanese Prime Minister Shinzo Abe, and the New Zealand Prime Minister Jacinda Ardern on Sunday during the APEC Leaders Meeting.
It is reported that the anticipated cost will be US$1.7 billion.
The planned investment will be in new generation capacity, as well as transmission and distribution lines with the aim of connecting households, service providers and businesses to the grid.
‘Continued efforts to improve institutional and regulatory frameworks are also required in order to unlock private investment,’ a statement from Scott Morrison said.
Australia will reportedly provide A$25 million to the project in its first year.
PNG currently has operational power generation capacity of about 250MW across its three electricity grids—Port Moresby, Ramu and Gazelle—but the government’s stated goal is have about 1000 MW of installed capacity by 2030.
‘At the moment, vast swathes of PNG go dark at night,’ the statement said.
‘The new initiative aims to lift living standards by providing power to essential services like schools and hospitals, as well as helping local businesses to grow.
The agreement is described as aiming at ‘principles-based, sustainable infrastructure development that is transparent, non-discriminatory, environmentally responsible, promotes fair and open competition, upholds robust standards, meets the genuine needs of the people of Papua New Guinea and avoids unsustainable debt burdens.’
More than half of PNG’s power comes from hydro, and it is likely this will continue to be a major emphasis of the planned roll out.
‘The partnership is intended to be delivered in alignment with Papua New Guinea’s own plans and priorities and implemented in close conjunction with PNG Power Limited,’ the Morrison statement said.
‘It signals a strong commitment from these countries to supporting growth enabling investment in key economic infrastructure in Papua New Guinea.’
Beyond the obvious benefits to PNG, the deal appears designed to counter the influence of China in the Pacific.
In September, there were reports that China was pressuring PNG to sign a US$1.25 billion deal for a new 180MW hydro plant ahead of the APEC summit.