The Papua New Guinea Government has outlined a major restructuring of Papua New Guinea Power that could include provincial partnerships and partial private ownership as it seeks to turn around the troubled state-owned electricity utility.
Prime Minister James Marape.
Prime Minister James Marape outlined the strategy in Parliament in late August, describing Papua New Guinea Power’s financial and operational position as extremely serious after years of underinvestment, inadequate maintenance and poor revenue collection.
Marape said reforms underway since 2023 were intended to create a more financially sustainable and efficient electricity provider while extending reliable power to more Papua New Guineans.
The proposed approach includes restructuring Papua New Guinea Power’s operations and allowing greater participation by provincial governments and private investors.
The Prime Minister said ageing infrastructure, high operating costs and inadequate revenue collection had contributed to the utility’s present difficulties.
Reliable and affordable electricity remains one of the most important business-enabling issues in Papua New Guinea. Companies operating in the country frequently need to maintain generators or other backup systems, adding substantially to operating costs.
Improvement in electricity supply would therefore have implications well beyond Papua New Guinea Power itself. Mining, manufacturing, hospitality, retail, telecommunications and small businesses all stand to benefit from more dependable supply.
The Government has increasingly looked towards partnerships with the private sector to address Papua New Guinea’s infrastructure gap, and the Papua New Guinea Power proposals appear to extend that philosophy to one of the country’s most important state-owned enterprises.
Reform will nevertheless require careful implementation. Electricity infrastructure requires considerable capital expenditure, while tariffs need to balance the financial sustainability of the utility against affordability for households and businesses.
Provincial participation could also lead to different models of electricity generation and distribution tailored to local conditions.
Papua New Guinea has considerable renewable energy potential, including hydro, solar and geothermal resources, while major resource projects and independent power producers could potentially play a larger role in future supply.
Marape said the ultimate objective was a financially sustainable utility capable of providing reliable electricity while expanding access throughout the country.
