Partial privatisation of PNG Power now underway

The Marape–Rosso Government says it is going ahead with the partial privatisation of PNG Power Limited, with plans now moving into the negotiation stage.

Minister for State Enterprises William Duma made the point that the process of privatising an essential state-owned service is complicated and must be done properly and transparently.

Mr Duma said the National Government is now considering restructuring options proposed by KordaMentha, which will form the next steps of negotiation.

“The National Government has restructuring scenarios proposed for the scheme of arrangement outlined by KordaMentha, which will form the basis of its discussions and negotiations”, he said.

The Minister said it has taken a lot of coordination to reach this stage.

“I look forward to this effort continuing now that we have a roadmap, and all parties must continue to make their contribution to negotiations.”

Mr Duma explained that the proposed scenarios look at parts of PNG Power’s operations that could be privatised, along with possible timeframes.

“PPL’s operations cover a range of grids from large down to micro levels, so there may not be a standardised approach to each of these networks.”

He acknowledged that PNG Power has become a burden on the State, but also stressed its potential if managed commercially.

The NEC has approved the 2024-2026 PPL Corporate Plan and directed that tenders be prepared in line with the decision on partial privatisation.

Mr Duma said NEC had also approved the PNG Power Privatisation Roadmap earlier this year, which allowed Kumul Consolidated Holdings to bring in professional consultants.

These consultants provided reports covering stabilisation plans, solvency tests, legal reviews, and valuation work needed for the privatisation process.

He said a significant part of the findings were consistent with previous market analysis.

According to Minister Duma, the recommendations included: a short-term stabilisation plan to improve PNG Power’s finances, a clear assessment showing the need for shareholder support during the transition, and the need to settle creditor issues and ongoing court matters to avoid delays.

He said these matters must be addressed immediately.

The Minister stressed that there should be no more delays.

“For many years, there has been a lot of talk, but no action in relation to the privatization of PPL.”

He said the Marape–Rosso Government is committed to completing the partial privatisation process.

“The Marape-Rosso Government will deliver PPL’s partial privatisation with due consideration of the range of issues involved, and in the interests of Papua New Guinea and investors.”