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PNG Assets Have Potential To Earn, Says Bekker
by PNG Business News - June 01, 2021
PNG Power Managing Director Flagon Bekker said the company's assets have a lot of potential for generating income and maximizing their use to help the country distribute energy more efficiently.
PNG Power has the capability and assets to provide that opportunity and needs to look at the best solutions to accomplish this sort of outcome, he said. Electricity markets have altered worldwide and in the region to produce better benefit for the economies of those nations, he said.
“Reform is inevitable for the power sector in PNG as it has been and continues to be across the globe. PNG is not unique,” Bekker said.
“Reform will consist of a measured, step by step approach by PPL and the other market participants.
It will mean lower power prices for the people of PNG through transparent, competitive investment and operating processes in generation, transmission and distribution and retail business units. Reform is about change.
Change for a better stronger and more sustainable sector.”
He highlighted that, after the recent passage of enabling legislation, the National Energy Authority (NEA) will take over regulatory tasks from PNG Power and the ICCC.
He stressed that PNG Power could not be both a regulator and a participant in the business at the same time, that it could not be both the referee and the player, as well as the third umpire.
“It must now behave in a more commercial manner to implement the programs necessary to achieve the government’s electrification agenda.
PNG Power would become a competitive participant in the market in the future, with a single buyer responsible for power demand throughout the country's electrical infrastructures.
“I want all PNG Power staff to understand the vision that we have for the organisation and its important role in achieving the goals of the government; this requires that we must act in a commercial manner, especially in dealing with donors and investment parties.
“We should not be afraid of change; we must all embrace it,” Mr Bekker said when responding to the media criticism by the Energy Workers Union about the changes and the reforms initiated at PNG Power.”
Post-Courier (31 May 2021). “Bekker: PNG Power Is Able To Make Money.”
PNG Business News - April 19, 2021
Bekker Says Contract Reviews Are Important
According to PNG Power Ltd, renegotiation and reviews of current contracts with independent power producers (IPPs) make the business healthier and more competitive (PPL). PPL managing director Flagon Bekker made the statement in response to questions raised by IPP industry groups (IP3) about PPL unilaterally reviewing and renegotiating current contracts and contractually negotiated prices to supply electricity to the grid. IPPs, according to Bekker, must be adaptable enough to evolve as fiscal, technical, and environmental factors change with time. “We asked IPPs to respond to a survey late last year where we asked them for their suggestions and next steps in dealing with the current commercial status quo,” he said. “In fact, we offered four or five alternatives to renegotiation. None responded.” According to Bekker, analysis shows that in terms of pricing, spending, and the overall economy, it is best to keep IPPs' share of the total market minimal. “Egypt is the best example of countries that have kept IPPs to a smaller share of the total (market) and found it easier to weather macro-economic shock and have greater freedom in deciding where to source finance for power investment in the future,” he said. “The IPPs not only make the macroeconomy weaker, but they are also the cause of their own problems. “PPL is leading to change this. “IPPs should not resist. “They should partner by suggesting solutions for the future. “PPL will send the survey out again and we hope they respond this time.” According to Bekker, there was a lot of analysis and support focused on post-negotiation evaluations, which shows that the renegotiation process contributes to the discovery of lessons and eventually the execution of those lessons. “Off the top of my head, here is a list of countries that have renegotiated PPAs in full or in part over the years: Philippines, Brazil, India, Argentina, Mexico, Turkey, Poland, China (among others),” Bekker said.
PNG Business News - June 14, 2021
PNG Power Undergoes ISO Certification
PNG Power Limited will be subjected to an evaluation by its asset management standard unit in order to receive ISO 55001 certification. A third party will undertake the assessment and ISO 55001 certification process, which will take 12 to 18 months and include an evaluation of the company's present AM practices and processes, identification of gaps, and development of a roadmap for adoption. This will be the first phase in PNG Power's ISO 55001 accreditation process, which will be supported by USAID's PNG Electrification Partnership (USAID-PEP). The company's old and old infrastructure assets, according to PPL managing director Flagon Bekker, have continued to obstruct the delivery of dependable power to clients across the country. PNG Power has taken the first step forward in commencing the Asset Management Strategy and Framework for Management of PNG Power Infrastructure Assets, he added, under its new asset management (AM) unit. He explained that ISO 55001 accreditation is vital because it ensures that PNG Power has an asset management system (AMS) in place that caters for internal and external challenges influencing asset management in order to meet the company's goals. Risk management, ageing/aged infrastructure, supply chain and spares maintenance, maintenance optimisation, AM performance monitoring, and project/investment lifecycle assessment and planning are the six workstreams that the AM unit will focus on. PNG Power's asset management will be based on these workstreams. On the leadership front, it will be ensured that senior management has accepted responsibility for developing and communicating the AM Policy and Strategic Asset Management Plans to all stakeholders involved. The accreditation will also provide confidence that AM objectives have been defined, recorded, and disseminated within the organization, as well as that adequate planning has been put in place to meet the goals. PNG Power is also sponsored by the World Bank under its Energy Utility Performance and Reliability Improvement Project (EUPRIP) to strengthen infrastructure through rehabilitation and upgrade works, therefore the support from PEP is expected to complement the asset management strategy. PNG Power is also working with USAID PEP Activity to improve grid home connections, and the AM effort will guarantee that quality and dependable power reaches end customers.
PNG Business News - April 08, 2021
PNG Power Receives Assistance from the World Bank
The World Bank has funded a $30 million (PGK105 million) project to help the state-owned electricity provider PNG Power boost its operational and financial efficiency. The PNG Energy Utility Efficiency and Reliability Improvement Project (EUPRIP) arrives at a crucial time for PNG, with people around the country facing big problems with inadequate access to electricity, and even for those that do, unreliable power sources and long blackouts that are affecting households, industries, and critical service delivery. Though PNG has tremendous untapped energy resources, growth is lagging, and electricity connectivity remains extremely limited, with only around 13 per cent of the country's 8.6 million population having access to grid-connected electricity. The new project, which is scheduled to be completed between 2021 and 2026, will assist PPL in establishing a stable financial base and catalyze private investments in the energy sector. The scheme includes the reconstruction, reinforcement, and improvement of utilities on PNG Power Limited's (PPL) owned and managed grids in Port Moresby, Ramu, and Gazelle. The project would also help PPL boost its management and financial stability, with an emphasis on raising service quality to reach higher expectations on a regular basis. PPL will gain assistance in developing the business reform strategy, which will include smart meter installation and emerging technology implementations. In addition, through the planning and execution of a Least Cost Power Development Plan for PPL, the initiative will lead to lowering the cost of power generation and switching to clean, renewable energy. William Duma, the Minister for State Enterprises, said that supplying inexpensive and stable electricity to the PNG community is critical to the government's growth plans and that it necessitates a well-functioning service provider. Meanwhile, PPL Managing Director Flagon Bekker noted that the World Bank-funded PNG Energy Utility Efficiency and Reliability Improvement Project would allow PPL to contribute significantly to the Government's aim of connecting 70% of the population to electricity by 2030, as outlined in the PNG 2010-2030 Growth Strategic Plan. “PPL is embarking on major corporate reform initiatives,” he said. “We look forward to working alongside the World Bank team to put in place critical improvements that will ultimately deliver stronger, more reliable energy for all Papua New Guineans.” Stefano Mocci, the World Bank's Country Manager for Papua New Guinea, also stressed the importance of access to secure, affordable electricity for economic development; companies, schools, hospitals, and clinics, among countless other facilities in PNG, all need reliable, affordable electricity to keep the country developing. “This new project builds on the groundwork delivered through the World Bank’s Energy Sector Development Project, which helped prepare PNG’s National Electrification Rollout Plan, and geospatial assessments to plan optimal approaches to provide electricity to 70 per cent of the country’s population by the year 2030,” he said. “We’re proud to be helping ensure more Papua New Guineans can get connected - and stay connected – to reliable, affordable electricity in the years ahead.” Agriculture, health, road transport, water and sanitation, electricity, rural service delivery, and youth jobs are among the nine successful projects supported by the World Bank in PNG, totalling approximately US$455 million.
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PNG Business News - June 15, 2021
PNG Vanilla Company Partners Expo2020 Team
Dr. Nancy Irwin (left) with the Deputy Commissioner General for Expo2020 and Head of the PNG Expo2020 Secretariat, Mrs. Jacinta Warakai-Manua began the partnership to tell the PNG Vanilla story in Dubai, by exchanging ideas in Port Moresby last week. A vanilla production and export company is partnering with the PNG Expo2020 Team to promote their products in the Dubai World Exposition that starts in October this year. KAMAPIM, a company working with landowners in the Madang and Morobe Provinces produces top quality vanilla beans and is already exporting to the EU market. The Managing Director of the company Dr. Nancy Irwin, met with the PNG Commissioner General to Expo2020 Ambassador Joshua Kalinoe and his Deputy Mrs. Jacinta Warakai-Manua in Port Moresby last week to firm up the arrangements. Dr. Irwin said Kamapim (pidgin for develop and to improve) concentrates its efforts in producing the best quality bean for the international market through quality assurance production methods. “PNG farmers can grow anything, they have instinctive ability to grow well any crops. When I first started the project, the quality of the beans were poor, full of fungus due to lack of processing knowledge. We saw huge potential of the organically grown beans and started working with landowners through a cooperative production and marketing structure to improve quality” “The company provide extension services to farmers and buy the beans directly, ensuring farmers are paid a fair price for their efforts”, she said. Dr Irwin said the beans are tested internationally and are consistently classed as the top-quality A grade level. “While PNG has a good perception of growing environment friendly organic vanilla beans, the challenge is for the relevant Government authorities to work with farmers to improve quality. I believe the cooperative production methods applied by our company, Kamapim, could be used nationally as one of the models to improve quality for the export market as well as to maximize revenue gain for farmers”, Dr. Irwin said. She said the company is looking forward to partnering with the PNG Expo2020 Team to tell the PNG story and to connect with niche importers in Dubai and the Arab world in general. Dr. Irwin said the company would promote its products in specially branded PNG Expo2020 containers to create visibility for the country as well as to preserve quality at the company’s cost.
PNG Business News - June 15, 2021
PNGEITI Praises Open Dialogue to Reopen Porgera Mine
The PNG Extractive Industries Transparency Initiative (PNGEITI) has praised the open stakeholder dialogue culminating in reaching consensus to re-open the Pogera Mine in Enga. Parties in April this year sanctioned a “Framework Agreement for the New Pogera Project” which spells out the roadmap to reopen the mine. Mark Bristow, CEO and President of Barrick Gold last week explained key elements of “Framework Agreement for the New Pogera Project” at a public forum at the Piam Oval in Pogera witnessed by PNG Prime Minister James Marape, landowners and other leaders. In the new agreement, PNG stakeholders will together own a 51 % equity stake in the mine while Barrick Niguini Limited (BNL), a joint venture company in which Barrick and Zijin Mining Group each own 50% will hold 49 %. BNL will remain the mine operator. At the end of the first ten year period, the PNG stakeholders will have the option to purchase BNL’s 49 % PNGEITI Head of Secretariat Lucas Alkan remarked that the open discussion throughout the negotiation process on the part of the mine operating lead, Government and landowners has culminated in this agreement signed happily by all parties. “We at the PNGEITI congratulate the Government and the project lead Barrick Gold and other stakeholders for reaching a consensus decision to reopen the mine. “Pogera has been an economic powerhouse for many years and people in the country have been waiting for the outcome. “We commend the Prime Minister, the President and CEO of Barrick Gold Mr. Mark Bristow for the leadership in ensuring that the negotiations were done in the transparent and open manner. “PNG Extractive Industries Transparency highly encourages such openness in the negotiating process for resources benefits and importantly the responsibilities that each stakeholder must take on to ensure smooth flow of proceeds. “We look forward to working with the Government and the project operator in the areas of transparency and accountability to help derive best value for all stakeholders. PNGEITI commitment to reporting on developments in the mining and petroleum space is becoming stronger with new reporting dimensions taking shape as we making progress in promoting transparency and accountability in the PNG mining and petroleum industry” Mr. Alkan said.
PNG Business News - June 14, 2021
BPNG Goes For Review
Treasurer Ian Ling-Stuckey has revealed the terms of reference for a review of the Bank of PNG, as well as the members of the review panel. Former Chief Secretary Robert Igara will lead the study, which was planned in the Supplementary Budget for 2020. Former central bank governor Sir Wilson Kamit and Australian professor Dr Stephen Howes are the two members. “These very eminent people, all of whom have detailed experience of the PNG financial system and reform, will be working to a term of reference approved recently by the NEC,” Ling-Stuckey said. “It is the first review of the central bank and the Central Banking Act 2002 since Sir Mekere Morauta’s financial system reforms when he was prime minister from 1999 to 2002. “Much has changed since then, and the effects of the coronavirus pandemic, along with substantial technological advances, have made the need for a review even more urgent. “The aim is to modernise the bank and the legislation in line with international developments, and make it more responsive to prevailing circumstances while preserving its independence.” The study is scheduled to be finished in time for Parliament's November session. “An independent advisory group was also established by the late Sir Mekere when looking at the changes that led to the Central Banking Act 2000,” he said. “Igara, currently the University of Papua New Guinea chancellor, was chief secretary at the time, and Sir Wilson was the governor of the Central Bank. “Prof Howes, head of the Development Policy Centre at the Australian National University, has long been involved in PNG research and advice and consultation, particularly in relation to national development.” Reference: The National (8 June 2021). “BPNG going for review”.