Overview

In the early 2000s, less than 10 percent of the population in PNG had access to electricity. In recent years, the PNG government announced an ambitious target to accelerate progress - 70 percent of its people will have access to reliable electricity by 2030. Turning on the lights in homes and businesses will undoubtedly improve living standards and drive economic growth across the country.

The 2020 national budget projected that the construction sector’s contribution to nominal GDP would increase from PGK5.4 billion (USD1.6 billion) in 2019 to PGK5.9 billion (USD1.7 billion) in 2020, PGK6.4 billion (USD1.9 billion) in 2021 and approximately PGK8 billion (USD2.4 billion) by 2024. Although business disruptions caused by the COVID-19 pandemic have led to a revision of these estimates, they highlight the positive sentiment that surrounds PNG’s construction segment in general.

With wind, water, geothermal resources and an abundance of sunshine, PNG is ideally positioned to become a leader in renewable energy. A recent study by the International Finance Corporation highlighted the enormous potential for wind power in PNG. There are multiple locations in and around Port Moresby, and coastal villages of PNG with wind speeds over 10 meters-per-second. Onshore wind projects financed with a cost of electricity of anywhere between three to six cents per kilowatt hour and that is often the cheapest form of new generation.

The PNG Electrification Partnership committed the leaders of Japan, the United States, New Zealand, and Australia to helping PNG realize its goal of connecting 70 per cent of the country to electricity by 2030. The US has launched its PNG Electrification Program committing USD60 million over five years and a plan to make 200,000 connections. Rather than fund all its projects entirely, USAID is aiming to use seed funding to leverage private sector investment into PNG’s electricity sector. An initial USD57 million (PGK200 million) has been allocated for this purpose and the project is looking to generate investment worth some USD200 million (PGK701 million).

Leading Sub-Sectors

• Hydropower
• Solar
• Geothermal resources

Opportunities

Small-scale solar and hydropower generation equipment, telecommunications systems including the internet, and refrigeration that can be applied at the town and village level represent opportunities for U.S. firms. Through the USAID PNG Electrification Project (PEP) there are opportunities for U.S. businesses to supply small scale solar products and equipment into the PNG market. USAID has commenced consultations with local businesses and U.S. companies.

Resources

• PNG Climate Change and Development Authority
• PNG Power Ltd
• Solar Energy Association of PNG
• National Energy Authority