The government and Shenzhen Energy of China recently signed the K3.3 billion Ramu 2 hydropower project.
According to State Enterprise Minister William Duma, although the conditional power purchase agreement with PNG Power had been signed, there were other financing arrangements that the project consortium needed to work on with their own parties before the commencement.
“The first hurdle has been dealt with now with the signing today,” he said. “As soon as they organise their financing, we will start. We are looking at an initial investment of K200 million for the early work programme – building roads, setting up camp – an immediate capital investment of money into our country.”
Duma said Morobe and the Eastern Highlands would each own 10 per cent equity in the project. Landowners from each of these places would have a 10% share while the state, 60%.
“We are giving equity to the two impacted provincial governments and landowners plus the project will be paying the lease of K350,000 every year,” he said. “On top of that, the landowners will receive an upfront payment of K10mil for their landowner companies.”
After a strong bidding process managed by Kumul Consolidated Holdings, Duma said the National Executive Council had picked the consortium led by Shenzhen Energy.
Not only will the project supply electricity to the Wafi-Golpu mine and maybe the Ramu Nico project in Madang, but the project will also provide jobs and benefits to businesses and landowners.
“This project might even outlive the Wafi-Golpu mine,” Duma said.
