K146mil loan to boost power

 By MERESEINI MARAU in Delhi

THE Papua New Guinea government has secured a loan of US$66.8 million (K146.57 million) from the Asian Development Bank for the completion of the Port Moresby grid development project.

The loan agreement was signed in New Delhi on Wednesday by Minister for Treasury Don Polye and the new ADB president TakehikoNakao.

The total cost of the project is US$82.6 million. The remaining US$15.8 million will be met by the PNG government and PNG Power Ltd.

To make up the US$66.8 million , the ADB has drawn US$52.1 million from the Ordinary Capital Resources and US$14.7 million from the Asian Development Fund.

The signing was done during the 46th annual meeting of the ADB. It was the first loan signed by Nakao since he took up office on Monday.

“This is a memorable moment for me,” he said.

The project will help boost electricity access rates in Port Moresby to 74% and extend the city’s power grid to an estimated 3,000 ro low-income families. 

Nakao said PNG had a large potential because of its resources and people.

Polye told Nakao that the loan would enable PNG to complete a very important project crucial to the social and economic development of the country and its people.

He said the project would help accommodate the growing demand for electricity in Port Moresby.

This multi-million dollar project is in line with the government’s development policies – the PNG development strategic plan (2010-2030) and the medium-term development plan (2011-2015).

The government’s Vision 2050, which includes the two policies above, aims to transform, among other things, the provision of reliable and affordable electricity.

Xianbin Yao, director-general of ADB’s Pacific department, said the project would  connect ‘‘currently un-served households to reliable, good quality electricity”.

“Improved power supply in the target areas will enhance quality of life and encourage low-income families to engage in small-scale income generation activities.

“The US$66.7 million loan will also help maximise and improve the use of hydropower by upgrading and rehabilitating two hydro-power plants currently generating electricity for Port Moresby.  

“This should reduce fossil fuel consumption while increasing access to, and the reliability of, the Port Moresby power grid. 

“Ultimately, the project will assist Port Moresby power grid operator PNG Power Ltd in expanding renewable energy generation, and significantly improve the quality of electricity.

“The project will be implemented over four years, with PNG government contributing US$16.3 million.”

Yao said since joining the ADB in 1971, PNG had received 75 loans worth US$1.5 billion, an ADF grant worth US$15 million and 148 technical assistance projects worth      US$62.8 million.