The ADB board of directors has approved a multitranche financing facility for the Town Electrification Investment Program, which will contribute to the state utility PNG Power’s 10-year power development plan through to 2018.
It will fund, in two stages, renewable energy facilities, including run-of-river hydropower plants and transmission systems in about six provincial centers.
The first tranche of the investment program will support run-of-river hydro plants in Northern Province and the Autonomous Region of Bougainville, as well as a 66kV transmission line in West New Britain.
The transmission facility will provide access to about 1MW of spare generation capacity from the Lake Hargy hydropower plant, as well as up to 3MW of biomass-generated electricity from palm oil plantations.
The first tranche funding will include a loan of $40.9m from ordinary capital resources, and one of $16.4m equivalent from the concessional Asian Development Fund, with annual interest charges based on ADB’s LIBOR-based lending facility.
Collectively they will finance 80% of the first tranche cost of $71.6m, with the Government of Papua New Guinea providing counterpart funds of $14.3m.
The full program is due for completion in December 2016, with first tranche activities finished by December 2013.
