Outgoing Minister for State Owned Enterprises, Hon. William Duma, has announced that the State owes PNG Power Limited K200 million in unpaid bills.
Speaking during the ministerial handover-takeover program in Port Moresby, Mr. Duma said PNG Power(PPL) is one of the most important SOEs in PNG.
“It is more than just business. It is the supplier of the essential critical public service of electricity to our people. We need affordable and constant supply of power to run homes, schools, hospitals, public services, and to advance the economy through business empowerment,” he said.
Minister Duma said the core challenge is affordability, “PNG Power must be affordable to procure and pass on to the consumer at a reasonable price. However, for many years this has not been possible, so PPL has been in a constant loss-making position,” he said.
“Its tariffs did not cover its costs, much of its plant was decades past its design life, and it was locked into agreements that require it to pay for generation capacity in US dollars whether or not the power is used.”
The numbers tell the story he said, PPL’s average tariff is about 87 toea per kilowatt hour, while its cost of supply is about K1.15 per kWh. This means the company loses money on every unit it sells.
“Only about 80 toea in every Kina billed is collected. State agencies owe PPL K200 million in unpaid bills,” Mr. Duma said.
Minister Duma said, as of April 2026, total liabilities stood at around K1 billion. The largest creditors are the State and Independent Power Producers.
Minister Duma emphasized that, the heaviest structural cost remains thermal power purchased in Port Moresby under 2019 agreements with two gas-fired IPPs at Caution Bay: Niu Power and Dirio Gas and Power.
Both agreements are “take or pay”.”This means PPL pays fixed monthly capacity, operations and pipeline charges set in US dollars, whether or not the electricity is dispatched. As a result, every depreciation in the Kina increases the amount PPL has to pay,” he said.
Despite the losses, Minister Duma said reforms are underway to turn PPL around and prepare it for partial privatization, as set by government.
“We renewed management and received additional support from the National Government. When this turnaround began, PNG Power had long been a company in deep trouble with a bleak outlook going back decades. We have been turning that around,” he said.
He announced that due to the formal reform path set by NEC since 2024, PPL recorded a small profit.
“In June 2026, a small profit of K1.7 million was recorded, based on record revenue of K108 million. This is a good sign,” Mr. Duma said.
Going forward Minister Duma acknowledged the CEO of PNG Power Mr. Paul Bayly, the Board and staff of PNG Power, Kumul Consolidated Holdings and development partners for their collaboration in the past years and pledged his full support to Minister Maru whose taking over the political responsibility of PPL.