By JOE GURINA
Landowners and provincial governments from Eastern Highlands and Morobe will benefit from a free equity share from the Ramu 2 Hydropower project which is an arrangement under the Marape government.
Minister for State Owned Enterprises William Duma told a media briefing today that this is the first ever arrangement achieved from any past governments.
Minister Duma said under the arrangement, the landowners and provincial governments from Eastern Highlands and Morobe will receive 40 percent equity shares that will have 10 percent given to each landowners and provincial governments, while the State retains 60 percent.
He said this is the first time landowners and provincial governments from Eastern Highlands and Morobe are privileged to receive free equity shares from this arrangement.
Duma also mentioned that there will be K10 million upfront payment for landowner companies to help them participate in spinoff activities from the hydro project.
He said K350, 000 annual lease payment for 25 years will be paid directly to the provincial government and landowners as well.
“So for the first time in such large scale projects, our provincial government and our landowners will become equity partners with a total of 40 percent in the project,’’ Duma said.
Minister Duma was speaking after the signing of Ramu 2 project implementation between the State and the developer Shenzhen Energy Co at the Government House today.
He said the National Executive Council has appointed the Consortium led by Shenzhen Energy after a robust bidding process managed by KCH through its transaction advisor Advisian of Worley Parsons Group in 2017.
Duma said the key milestone for the project now paves way for the Consortium led by Shenzen Energy to enter into a conditional Power Purchase Agreement with PNG Power Limited.
He said the signing of the Implementation Agreement reiterates the Marape Government’s commitment to achieving least cost energy solutions for local industries, but more so attracting foreign direct investment and growing the economy through strategic nation-building infrastructures such as the 180 Megawatts Ramu 2 Hydroelectric project.
He said the project is not likely to start next year or any time soon with early works that will cost the consortium about K200 million to put up road infrastructures and other necessities like grid lines adding, “those things will take time to organize.’’