PNG Power Ltd (PPL) has been issued a ‘notice of default’ by Dirio Gas & Power Company Limited (Dirio).
Dirio, PNG’s first Independent Power Producer (IPP), first commenced the sale of electricity to PPL under a long-term Power Purchase Agreement (PPA), in November 2021 to power its Port Moresby grid.
The firm says PPL now owes more than K180 million, and they have issued the notice of default under the PPA as there has reportedly been no engagement from PNG Power on how they intend to repay the amount.
“Dirio has been patient with PNG Power while they accrued greater debts, recognizing the significant importance of providing a reliable electricity supply to Port Moresby, its hospitals, schools, industries and residents,” said Dirio chairman Isaac Lupari.
“The situation has now become untenable.
“Unfortunately, PNG Power has continued to neglect its obligations under the PPA despite numerous attempts by Dirio to engage and elicit some commitment to pay Dirio and its landowner shareholders monies due under the PPA.
“Dirio does not intend to inconvenience any of the residents of Port Moresby. Hopefully, by providing advanced notice, Port Moresby users will be better prepared for any supply interruptions.”
Lupari further said despite having 45MW of capacity available, PNG Power has refused to take any more than 30MW, hindering the power generation available to Port Moresby residents.
This newsroom contacted PPL for a response but was advised that PPL will not comment at this stage as it is a matter between the State-Owned Entity and Dirio, which the PNGLNG project landowners and the governments of Hela, Southern Highlands, Central and Gulf owned.