PNG RENEWABLE ENERGY GETS $46 MILLION IN ADB LOANS

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Bougainville hydro plant stands to benefit

By Gorethy Kenneth PORT MORESBY, Papua New Guinea (PNG Post-Courier, Dec. 1, 2010) – Bougainville’s multi-million kina hydro power plant stands to benefit from an Asian Development Bank (ADB) loan that has been approved.

ADB has extended 120 million-kina [US$45.5 million] in loans to Papua New Guinea (PNG) for renewable energy facilities that will help the country meet electricity supply gaps in urban centers. The ADB board of directors has approved a multi-tranche 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 hydro power 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, and a 66 kilovolts transmission line in West New Britain.

The transmission facility will provide access to about 1 megawatts of spare generation capacity from the Lake Hargy hydro power plant and up to 3 megawatts of biomass-generated electricity from palm oil plantations.

The first tranche of the funding will include a loan of 40.9 million-kina [US$15 million] from ordinary capital resources, and one of 16.4 million-kina [US$6million] equivalent from the concessional Asian Development Fund, with annual interest charges based on ADB’s LIBOR-based lending facility.

Collectively they will finance 80 percent of the first tranche cost of 71.6 million-kina [US$27 million], with the Government of PNG providing counterpart funds of 14.3 million-kina [US$5 million].

The full program is due for completion in December 2016, with first tranche activities finished by December 2013.

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