GM- PG Energy Sector Development Project
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Development objective
Since October 2009, the World Bank team has had a series of discussions with representatives of Department of National Planning and Monitoring, Treasury and key entities in the electricity sector, as well as representatives of ADB and JICA, to understand the needs and priorities in the electricity sector as an input to defining the focus and scope of World Bank support in the energy sector. Three broad areas for possible World Bank-supported technical assistance were identified based on GoPNG priorities and areas of focus for other development partners:- Technical assistance in developing the next hydropower project to supply the Port Moresby grid and setting the stage for further medium and large hydropower developments in the Port Moresby area;- Technical assistance in the areas of policy and strategy in the electricity sector, with a focus on rural and renewable energy;- Capacity building to assist the Government in preparing for its role in new hydropower projects.Based on these discussions the following OVERALL project scope is proposed (for combined IDA and GEF financing)follows. The GEF financing would be targeted towards specific barrier removal activities activities relating to renewable energy policy and rural electrification policy and strategy. These are listed at teh end of this section.OVERALL PROJECT SCOPEComponent 1: Technical Assistance for Energy Sector Policy and Strategy Development.Implementing Agency: Department of Petroleum and Energy (Energy Division).Activities proposed to be supported under this component would include:o Renewable Energy policy. This would include support for consultations and consensus-building among stakeholders; drafting of the policy document;o Rural Electrification Policy. A draft policy was prepared in 2004 but never finalized. This would include review and updating of the draft policy, including support for consultations and consensus-building among stakeholders;o Strategic Environmental and Social Assessment (SESA) to provide GoPNG guidance on institutional and regulatory issues to ensure sustainable management of the potential direct, indirect, induced, and cumulative adverse environmental and social impacts from implementation of these policies.o GIS Stocktaking and Development of a Stage 1 'Potential Rural Electrification Projects' Database. This would involve preparation of GIS overlays of population, infrastructure (e.g. roads, energy infrastructure, telecoms) and water resources;o Analysis of alternative models of community and rural electrification projects including cost structure, as an input to the ICCC process of developing tariffs for electricity supply in areas outside the PNG Power exclusive supply areas.o Preparation of a Rural Electrification Strategy. A number of entities are already involved in implementing electrification projects in areas outside the main grids. Incorporating the experience from on-going initiatives will be an important element in developing the strategy. Input from potential participants and beneficiaries will be important.o Technical Assistance related to DPE / GoPNG role in the oversight of the Naoro Brown Hydropower Project.o Preparing for DPE / GoPNG role in other new hydropower power generation developments.Component 2: Technical Assistance for Development of hydropower to supply the Port Moresby grid.Implementing Agency: PNG Power.Three sub-components are proposed. The first focuses on activities required to prepare the next hydropower project to supply the Port Moresby grid. The second focuses on activities to identify and assess subsequent hydropower developments to supply the Port Moresby grid. The third covers activities to improve PNG Power's position as an off-taker of new generation projects.GEF FINANCINGThe GEF financing (for COMPONENT 1 activities ONLY) will address the issue of barriers to Development of Renewable Energy-based Mini-grids through support for activities to overcome the key barriers identified above, namely lack of enabling environment and very limited availability of information on opportunities and development mechanisms. Some or all of the following activities would be considered for GEF financing. The exact scope will be determined as project preparation proceeds.- Development of the Rural Electrification Policy and Strategy, taking into account the benefits of renewable energy-based mini-grids;- Development of the Renewable Energy Policy;- Assembling all information on renewable energy resources in the country (including small hydro) and information on demand centers into a national GIS database of information necessary to identify and undertake preliminary preparation of renewable-energy based mini-grids;- Assessment of renewable energy-based mini-grid experience in PNG as an input to the development of the Rural Electrification Strategy;- Support for information exchange regarding success in sustainable development of renewable-energy-based mini-grids in other countries, through bringing practitioners from elsewhere to PNG to inform the discussions on development of policy and strategy;- Consensus-building activities within PNG to facilitate ownership of the policies and strategies, and understanding of the mechanisms to develop renewable-energy-based mini-grids.- Technical assistance to pilot implementation arrnagements of the Rural Electrification Strategy;- Project management.
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