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Markham Valley Renewables: affordable energy through inclusive economic growth


A PNG Biomass plantation in the Markham Valley in Morobe Province

One of the companies working toward powering Papua New Guinea (PNG) with renewable energy is PNG Biomass who operates an integrated renewable energy project in the Markham Valley in Morobe Province. The Project consists of a 30MWe baseload dispatchable biomass power plant with secure fuel supply from 16,000 hectares of sustainable, certified and dedicated tree plantations. PNG Biomass will also oversee construction, operation and dispatch of an adjacent 11MWp installed capacity solar PV farm on behalf of PNG Power. Together, the biomass power plant and solar farm will provide the Ramu grid with up to 40MW renewable energy to service the midday peak demand.


PNG Biomass is a clean, renewable and sustainable energy initiative. The Project is the first utility scale renewable biomass and solar power generation project in PNG. It is a cost-effective independent power producer (IPP) that is economically, socially and environmentally sustainable. PNG Biomass substantially enhances PNG’s reputation in mitigating climate change and helps transition the country to a fully renewable energy sector.


The Project has been developed following the best international standards and safeguards thanks to the involvement of several international development partners since early stages. It will help catalyse private sector renewable energy development in PNG by demonstrating that utility-scale renewable IPP projects can be financed on project finance basis, paving the way for further development of private sector renewables projects in the country.


This Project is also unique for another reason, it relies crucially on the active participation of landowners and communities. At the core of the Project is the objective to power PNG with affordable, domestic low-emission renewable energy through an inclusive economic growth model that empowers local communities.


EMPOWERING COMMUNNITIES


Throughout the Markham Valley, PNG Biomass has been working since 2011 on establishing plantations for its fuel supply and therein creating employment, business opportunities, and benefits for local communities. The Project actively engages landowners and communities.


They participate by leasing parts of their land for plantation establishment, utilise a range of direct employment opportunities – with many contracted to the Project through community owned Business Groups – and women are especially taking advantage of various business opportunities. This way the Project is already creating significant income streams for landowners and communities through land rentals, employment, and business opportunities – such as intercropping.

The Project will generate an estimated 400 national jobs during construction. Ongoing operation of the power plant and tendering of plantations will scale up to 500 national jobs and approximately 2,500 indirect local jobs over the 25-year project life, as estimated by an independent economic impact assessment. PNG nationals will constitute more than 90 per cent of the total workforce, with a specific focus on employing women, and the Project aims to be 100% nationally managed within 15 years.


At the moment, PNG Biomass has 40 employees in its main management company. In addition, the Zif Faring Business Group contracts over 90 local people to PNG Biomass and there are over 200 daily local labour jobs on the plantations. This means that the Project has already created 330 actual jobs (FTE), even before power plant construction has commenced and the ramp up of plantation establishment.


To further empower local communities, PNG Biomass has a number of community development programs that focus on enhancing local food security, providing financial literacy training, and using natural resources such as native stingless bees to create local business opportunities. There is a strong emphasis on addressing gender equality, family and sexual violence, and the protection of children and vulnerable persons. PNG Biomass is also supporting youth initiatives that set out to find clean, renewable and sustainable solutions for their communities to drive change and social progress.


Today, there is already a local productive economy slowly originating from the Project in the Markham Valley. In other words, the Project is built around the idea of inclusive rural economy growth by creating tangible extra income for local households. PNG Biomass will generate an estimated K29.6 million every year in household incomes, which over 25 years will provide a K740 million input to drive inclusive economic growth in the Markham Valley.

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