PNG Power blames high project costs

 PNG Power Ltd says high project costs have made it very difficult to deliver hydro power, despite 

PNG having some of the best water systems in the world.

Acting chief executive officer John Tangit, said this at the signing of a US$8.2 million (K18.55 million) energy sector development project for establishment of a new hydropower project at Naoro-Brown River in Central on Wednesday.

“If you understand the economics of it, it’s very difficult in terms of having to do the pre feasibility and then the detailed feasibility, and then raising capital for these civil structures, which are very capital-intensive.”

“The civil structure of these projects is huge in terms of money figures.”

World Bank country manager Laura Bailey concurred with Tangit, saying she had worked in several countries around the world, and it was only in PNG that she saw how difficult it was to set up projects.

“It (hydropower) is not as straight forward as funding a road,” she said.

“It’s really challenging to put together the finance packaging for power.

“It was only in PNG that PNG Power helped me understand exactly why it is so.”

The four-year project is financed by an International Development Association credit and a grant from the Global Environment Facility and will be implemented by the Department of Petroleum and Energy and PNG Power Ltd.