Improving access to finance the key to solar power expansion in Papua New Guinea

Improved access to finance could the rapid development of solar power, according to Jon Pittar, Managing Director of solar provider, Solar Solutions PNG. If the government is to achieve its energy goal of giving access to power to 70 per cent of the population by 2030, he believes solar-powered systems must be provided to rural communities.

PNG night light. Source: Michael Power

Solar Solutions is one of six main solar providers in PNG.

Since entering the market in 2013, it has sold thousands of home lighting systems to rural and remote communities, as well as street and security lighting in both rural and city environs.

‘We’re in tough economic times,’ Managing Director Jon Pittar tells Business Advantage PNG, ‘and with approximately only 10 per cent of the population in formal employment, people are restricted in how much they have to pay for power.

Solar can provide a low-cost alternative.

Pittar says the cost of laying the wires for a fully-operational grid is in excess of K100,000 per kilometre and it then costs up to K2400 to take the power from source to the houses, and then people have to pay for a meter, and then they have to pay for power.

He says historically in PNG mini-grids haven’t been successful and are an expensive option in which a fault in the system will affect all users. Individual housing units mean, on the other hand, that if a problem occurs, it only affects one unit and is easily repaired.

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‘You give a community lighting and communication and that community is going to develop’

‘We have to recognise in PNG that a large portion of the community aren’t going to be able to pay for power, so if we want to assist them to get better outcomes for health, better outcomes for education, they need to be provided home lighting systems in order to assist in their economic development.

‘You give a community lighting and communication and that community is going to develop.

‘So in five years’ time, 10 years’ time, there is going to be a demand for 240-volt power and mini-grids. But you’ve got to help give them a kickstart.

‘We still believe 12V home lighting systems are the most affordable and scalable way to get basic power and lighting to the rural communities who will not be able to afford to access the grid.’

Finance

Pittar, who is also the Vice-President of the recently formed Solar Energy Association of PNG, says the banks want property as collateral before they will lend, and SMEs are usually unable to offer this.

‘The banking sector has a requirement for companies to own assets before they will extend credit. These assets do not include inventory. The communal land model here makes proving land ownership extremely difficult,’ he observes.

He’s hoping the IFC will do in PNG what it has done in some other smaller Pacific nations and will act as a guarantor for SMEs in the solar sector who have a proven track record.

Promisingly, the IFC and PNG Power Limited have begun consultations with business on expanding renewable energy sources with a proposal for a pilot rooftop solar program in the capital, Port Moresby.

Solar lighting at Port Moresby Yacht Club. Source: Solar Solutions

Solar Solutions has carried out a number of projects around the country including street lights at the University of Papua New Guinea (UPNG), providing external and internal lighting for PNG–Australia Law & Justice projects, and a large-scale lighting project with PNG Ports in Alotau, Motukea & Rabaul.

Expansion

The range of 12V solar products has expanded since solar was first introduced into PNG six years ago.

Initially, it was home lighting kits, but Solar Solutions PNG now offers ‘a total program’ for village electrification, which consists of four lights, phone charging, accessories like TVs for schools and biomass cooking stoves.

Pittar says the biomass stoves use one-quarter of the wood normally used in open fires and they create far less smoke.

‘Advances in technology have now seen us offer solar-powered fridges, security cameras and freezers and our latest agency is Future Pump, a 100 per cent solar-powered water pump.’

Originally developed for irrigation, the pump can be used to get water from wells, water tanks, or the nearby river.

The IFC’s Country Manager for the Pacific, Thomas J Jacobs, and Carolyn Blacklock, Acting Managing Director of PNG Power, will both be speaking on related issues at the 2018 PNG Investment Conference at the Sofitel Brisbane on 6 & 7 August. To view the conference program or register to attend, visit www.pnginvestmentconference.com.

Comments

  1. I truly believe providing a sustainable power source like solar to almost 40 percent of rural dwellers ,will enhance growth ,not only in development, but in other areas as well.

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