National Energy Access Transformation Project

active

The project consists of four components.Component 1: Rehabilitation, reliability enhancement of PPL infrastructure, and on-grid electrification. Rehabilitating PPL’s distribution networks at the Port Moresby and Ramu systems, as well as PPL-managed provincial mini-grids, to improve the capacity and reliability of electricity services and increase on-grid and grid-equivalent household connections for electrification, through:Subcomponent 1.1 Rehabilitation and modernization of distribution networks: including rehabilitation and modernization of selected PPL’s distribution network facilities, and the provision of mobile substations.Subcomponent 1.2 Grid densification and expansion for household connections: through (a) medium voltage/low voltage grid expansion and densification at selected locations; and (b) connections of Eligible Households through the provision of Eligible Connection Costs.Subcomponent 1.3 Pilot Public Private Partnerships in PPL mini-grids clean energy modernization: including piloting the provision of Viability Gap Financing (“VGF”) through a VGF Grant to a private company participating in the Project that will build, operate, own, and transfer mini-grid, through PPL.Component 2: Renewable energy micro-grids and rural energy market development. Expanding energy access in remote communities that are not served by PPL through:Subcomponent 2.1 Micro-grid systems: providing Investment Grants through NEA to private service providers to install, operate, and maintain renewable energy-based micro-grid systems in rural areas.Subcomponent 2.2 Solar home systems (SHSs) and products: increasing the uptake of quality-verified SHSs and solar products in rural areas, through establishing a funding mechanism to provide Catalytic Grants and Results-Based Financing (“RBF”) Grants to eligible solar companies to extend their supply chains, develop markets, and scale-up the sales of Verasol-certified off-grid solar energy kits.Component 3: Energy sector institutional development. Strengthening PPL and NEA's capabilities to plan, survey, design, coordinate, and implement NEROP to achieve the Recipient’s national energy access targets and to support them in conducting strategic studies for the energy sector. Subcomponent 3.1 NEA institutional development: technical assistance for key studies for Project implementation, sector policy development, and related capacity-building programs to be conducted by NEA.Subcomponent 3.2 PPL institutional development: technical assistance for site identification and pre-feasibility studies for small hydropower and other variable renewable energy, and support for technical capacity development of PPL.Component 4: Project management. Support for Project management to NEA and PPL through:Subcomponent 4.1 NEA Project management: provision of technical assistance for Project implementation and coordination, and monitoring and evaluation, including establishing the Project Team (“PT”) and contracting the Owner’s Engineer (“OE”), Grant Administrator and Independent Verification Agent (“IVA”) within NEA to manage the Respective Part of the Project. Subcomponent 4.2 PPL Project management: Provision of technical assistance for PPL for Project implementation and coordination, and monitoring and evaluation, including establishing an Employer’s Project Manager (“EPM”) to manage the Respective Part of the Project. The project is conceived as part of a broader World Bank program: Accelerating Sustainable Energy Transition Multiphase Programmatic Approach (MPA) (P181555). This programmatic engagement signals the World Bank’s long-term and bolder commitment to work with the Governments in the EAP region to accelerate the scale-up and grid integration of renewable energy in participating countries. The MPA programmatic engagement will not only benefit PNG for the implementation of its energy transition pathway but will also contribute to regional and global climate change mitigation and adaptation efforts. It will support: (i) scalable and replicable investments to facilitate RE scale-up and grid integration across countries in the East Asia and the Pacific (EAP) region (horizontal dimension); and (ii) priority investments identified in NEROP for electrification, rehabilitation, and upgrade of PPL’s distribution network and institutional development in PNG (vertical dimension). In this context, the proposed project is selected as the first phase of the Accelerating Sustainable Energy Transition MPA that will accelerate renewable energy scale-up and grid integration in participating countries across the EAP region. The proposed project contributes to all three pillars of the MPA, Pillar 1: ‘Enabling policies and strengthening institutions’ through the TA activities under component 3, Pillar 2: ‘Expanded and more flexible energy systems’ through enhancement of the distribution networks and mini-/micro-grids, and Pillar 3: ‘De-risking clean energy investments’ through the collaboration with IFC and provision of capital grant for a pilot mini-grid built and operated by a private company.