World Bank member the International Finance Corporation is working with PNG Power to structure a public-private partnership that will invest, upgrade, maintain and operate new solar generation sources at a selection of mini-grid centres which enable electrical distribution via systems disconnected from larger electrical grids.
The National newspaper reports that the project aims to improve electricity supply to remote areas and make PNG Power's services more sustainable.
Regular power cuts and the high cost of traditional alternatives - such as diesel generators - adversely affect productivity and profitability of PNG businesses and can limit employment opportunities.
The goal of this project is to enable PNG Power to work with private partners to increase the efficiency and reliability of power generation across its remote mini-grids - serving 1.5 million people - while also introducing renewables into its energy mix and reducing reliance on diesel fuel, in turn lowering fuel costs as well as greenhouse gas emissions.
Access to electricity allows schools and hospitals to better deliver essential services and is a vital to the private sector, including SMEs and industry, the IFC said.
Despite PNG being a resource-rich nation with abundant sources of energy, access to power is very limited.
It is estimated only 13% of people have access to on-grid electricity, mainly in urban areas.
"By boosting access to reliable, affordable and cleaner power, this project has the potential to improve many peoples' lives while contributing to a sustainable economic recovery from the devastating impacts of the ongoing Covid-19 pandemic," IFC resident representative for PNG Markus Scheuermaier said.
"It will also deliver benefits to small and medium-sized businesses that are crucial to creating jobs, underscoring the vital role the private sector will play in PNG's recovery."
It is expected that attracting the private sector to these remote areas will require an innovative approach.