Government signs K3.3bil power deal

By HELEN TARAWA
A K3.3 BILLION Ramu 2 hydro-power project was signed yesterday by the Government and Shenzhen Energy of China.
State Enterprise Minister William Duma said the conditional power purchase agreement with PNG Power had been signed but there were other financing arrangements that the project consortium needed to do with their own parties before the commencement.
“The first hurdle has been dealt with now with the signing today.
“As soon as they organise their financing, we will start,” he said.
“We are looking at initial investment of K200 million for the early work programme – building roads, setting up camp – an immediate capital investment of money into our country.”
Duma said Morobe and Eastern Highlands would each own 10 per cent equity in the project.
Landowners from both provinces will each have 10 per cent shares while the State will have 60 per cent.
“We are giving equity to the two impacted provincial governments and landowners plus the project will be paying lease of K350,000 every year,” he said.
“On top of that, the landowners will receive an upfront payment of K10mil for their landowner companies.” Duma said the National Executive Council had picked the consortium led by Shenzhen Energy after a robust bidding process managed by the Kumul Consolidated Holdings.
The Ramu 2 hydro-power project will provide jobs and spin-off benefits to the landowners and businesses.
The project will supply electricity to the Wafi-Golpu mine and possibly the Ramu Nico project in Madang too.
“This project might even outlive the Wafi-Golpu mine,” Duma said.