Completed Mixed AidData Chinese Aid

China Eximbank provides $133.3 million preferential buyer’s credit for Tari-Mt. Hagen 132 kv Transmission Line Project

$133.38M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Papua New Guinea State Treasury
Country	Papua New Guinea
Start Date	Jan 01, 2018
End Date	Jun 04, 2027
Duration	3,441 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`61203`

Grant Description

China Eximbank provides $133.3 million preferential buyer’s credit for Tari-Mt.

Hagen 132 kv Transmission Line Project In October 2014, the Government of Papua New Guinea signed a memorandum of understanding with TBEA regarding the Tari-Mt. Hagen 132 kv Transmission Line Project.

Then, in 2018, China Eximbank and the Ministry of Treasury of the Government of Papua New Guinea signed a $133,379,867.35 preferential buyer’s credit (PBC) agreement for the Tari-Mt. Hagen 132 kv Transmission Line Project.

📋 Loan / Grant Terms

📅 Maturity30 years

The other borrowing terms of the PBC are unknown.

However, it is known that the Ministry of Treasury of the Government of Papua New Guinea on-lent the proceeds of the PBC to Kumul Consolidated Holdings (a PNG state-owned enterprise, formerly known as Independent Public Business Corporation (IPBC).

The ultimate borrower (Kumul Consolidated Holdings) was to use the proceeds of the PBC to finance 85% of the cost of a $157 million commercial (EPC) contract between PNG Power Ltd (a state-owned power utility), Kumul Consolidated Holdings, and Tebian Electric Apparatus (TBEA).

The purpose of the project was to construct a 189 km, 132kV transmission line from Mt Hagen to Tari in Hela Province via Mendi. It also involved the construction of four new sub-stations in Mt Hagen, Pauanda (Paunda), Mendi and Tari. The ultimate goal was to build power lines to link and feed the Ramu Grid with electricity generated from Hides gas.

TBEA was the contractor responsible for implementation. A formal groundbreaking ceremony took place on June 6, 2018. The project was ultimately completed 7 months ahead of schedule on or around May 10, 2021.

📋 Staff Comments

This project is also known as the Hagen Mendi Tari Grid Development Project, the National Power Grid Development Project-132kV Transmission & Substations-Mt Hagen-Mendi-Tari, the Highlands Transmission Lines & Substations Project, and Phase 1 of the Transmission Lines Expansion Project. The Chinese project title is 巴新国家电网输变电工程 or 巴布亚新几内亚国家电网项目.
AidData has estimated the interest rate for the time being by taking the midpoint (1.5%) between 1% and 2%.
The China Eximbank loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020.

📚 Sources & References

O'Neill Launches K463m Project, $US145m power project for PNG's Highlands region
IJGlobal - Papua New Guinea's Highlands Transmission Lines & Su…apau New Guinea.pdf
RAMU SYSTEM POWER SUPPLY
驻巴布亚新几内亚大使薛冰陪同巴新总理出席输变电工程开工仪式, 2019 BUDGET ESTIMATES FOR STATUTORY AUTHORITIES PROVINCIAL GOVERNMENTS DEBT SERVICES AND TRUST ACCOUNTS
巴新国家电网一期项目开工仪式顺利举行
PAPUA NEW GUINEA REPORT ON GOVERNMENT FINANCE STATISTICS MISSION
China's Global Energy Finance
New PNG power network opens
巴新国家电网一期输变电工程项目正式开工
巴布亚新几内亚国家电网项目提前完工
K1b plus for transmission project
China's Overseas Development Finance
NINTHDAY_________________________Tuesday 8 November 2016DRAFT HANSARD________________________
VOLUME 3B PUBLIC INVESTMENT PROGRAM FOR STATUTORY AUTHORITIES AND PROVINCIAL GOVERNMENTS 2019 – 2023
Outlier or New Normal? Trends in China’s Global Energy Finance
Prime Minister Peter O’Neill launched Hagen-Tari Transmission Lines Hagen
New electricity project to cost over K1 billion, 2020 BUDGET ESTIMATES OF REVENUE AND EXPENDITURE FOR NATIONAL GOVERNMENT DEPARTMENTS Volume 2A, 2021 BUDGET ESTIMATES OF REVENUE AND EXPENDITURE FOR NATIONAL GOVERNMENT DEPARTMENTS Volume 2a, 2022 BUDGET ESTIMATES OF REVENUE AND EXPENDITURE FOR NATIONAL GOVERNMENT DEPARTMENTS Volume 2a Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.