PRIME Minister Hon. James Marape has called on Dirio Gas and Power Company, PNG Power Ltd (PPL) and relevant stakeholders to provide a full report on the Dirio situation that is impacting power consumers in Port Moresby. This request comes in light of the existing Power Purchase Agreement (PPA).
Prime Minister Marape reiterated his government’s commitment to providing low-cost,
reliable, and clean electricity not only for power consumers in Port Moresby and Lae but
also for urban centers and rural communities across Papua New Guinea.
The Prime Minister expressed concern that the terms of the PPA between Dirio and PPL,
designed to deliver affordable and reliable power to consumers, have not been fully
realised as the Government had anticipated when the agreement was signed. He noted
that this situation also applies to other PPAs with private power producers such as Edevu
and Niu Power, as well as entities that supply diesel-generated power under various
agreements.
“PNG Power has been a weak company that we’ve inherited as a Government. Over the
last five years, the Ministry of State-Owned Enterprises has been trying to clean this place
up, with a lot of work put into it,” Prime Minister Marape said.
“Under our government, we’ve brought in, for instance, one of the best PPAs we’ve done
as a country in a long while, supplying from Edevu to Port Moresby. That’s 54 megawatts
of electricity that should be sold to PPL at the cheapest rate under the PPA arrangement.
Just like Edevu, both Dirio and Niu Power are supposed to provide low-cost and reliable
power to Port Moresby, enabling PPL to sell affordable and reliable power to its
consumers.
“That was the intention, and both of these projects were conceptualised before we took over as Government in 2019. We have gotten them off the ground, and they should be meeting Port Moresby’s power needs accordingly as expected,” Prime Minister Marape said.
“Under the various PPA agreements, Dirio and Niu Power were to provide cheaper and reliable power to PPL to enable it to sell low-cost, reliable power to consumers. That was the intended outcome, but I’m surprised to learn that the cost of power through Dirio is said to be higher than what was agreed upon and anticipated.
“The intention of my government is for low-cost power for our consumers through Edevu, Dirio, and Niu Power. That’s why we have PPAs. Our government’s policy is clear: we aim for cheaper, cleaner energy from hydro, solar, geothermal, and other clean energy sources, as well as gas fired power, as is the case with Dirio through the PNG LNG Project.”
The Prime Minister clarified that Dirio is owned by five provincial governments and landowners of the PNG LNG Project under agreed terms and conditions.
He emphasised that once the report on Dirio is received by the end of the week, the
Government will consider reviewing the PPA and its terms and conditions. Where necessary,
negotiations with PNG LNG Project and other relevant stakeholders will be conducted to ensure the availability of low-cost power for consumers, which was the original intent.
He also noted that PPL had previously purchased more costly power from Moitaka and Kanudi power projects. In response, the Government sought cleaner and cheaper energy sources, which led to partnerships with Dirio, Edevu, and Niu Power.
“If the original Government intention under PPAs is not being realised, then we will undertake a holistic review of the entire power supply system in our country. I assure you that I have requested a full report from the relevant stakeholders. Once the report is in, we will be able to make informed assessments on the way forward for the benefit of our power consumers in Port Moresby and nationwide,” Prime Minister Marape said.
