The financing will underpin network investment and hydro power upgrades.
PPL Acting Managing Director, Carolyn Blacklock, announced this during the PNG Investment Conference in Brisbane recently.
During her presentation, Blacklock announced the current plans with the ADB.
Blacklock said PPL has bold and aggressive plans that are focused on two areas:
- Reduce tariff to around half of current levels, in the next 5 to 10 years;
- Increase electrification to around 70 percent of population.
To achieve this, a new business model is needed.
“We are building a compelling and clear plan for reform, including rapid electrification and reduced costs of generation to attract low cost capital to undertake what is expected to be around US$1.4 billion over the next decade,” she said.
Blacklock says to achieve 50 percent tariff reduction, they need a new paradigm in energy supply with a return to low cost power and other renewables.
In the interim she said while the hydros are being built, they need to transition to gas-generated power.
“But the gas has to be dealing with international oil prices. PNG power is not party to the current gas sales agreements. And thus we are unfairly subject to international oil price fluctuations.
“One of currently cheap power compared to diesel could and will turn very quickly to end up being expensive power compared to hydro power.
“We have asked Government to intervene to create certainty for PNG Power for all gas fired power stations existing and planned,” she said.
To achieve a 70 percent electrification, they need to significantly increase connectivity roll out.
“We believe that accessible electricity at an affordable price is a game changer, and we believe it’s about time.
“At present we join around 1,600 connections per year. To achieve 70 percent of electrification we need to join 125,000 new connections every year,” said Blacklock.
She added on the generation front they are going to need and are already taking on domestic Independent Power Producers to reduce the capital burden on the company but increase access to less-cost power at the same time.
She said PPL was turning their attention to powering mines, matching demand curves carefully to counteract against over investment in expensive generation.
Blacklock informed potential investors that PPL was not there to make investors instant millionaires that have a power station to sell.
“We will in a planned methodical boring no surprises way be sticking to a lease cost power development plan. If we are to reduce the tariff, we must not deviate into sweetheart or special deals.”