Electricity reforms in small Island developing states under changing policy contexts – Lessons for Papua New Guinea

Small island developing states (SIDS) like Papua New Guinea are turning to power sector reforms in meeting the national electrification and climate change targets. This study, therefore, reviews the status and performance of electricity reforms among SIDS with a view to draw policy lessons for PNG. In doing so, we also review the existing status and performance of reforms in the PNG power sector and ensure robustness of findings by undertaking a stakeholder consultation. The findings suggest that PNG power sector is inefficient and financially unsustainable and therefore in need of reforms. However, our findings do not recommend the full adoption of the 1990s reform model in the PNG power sector given a small and isolated system size. Attracting private sector participation in electricity generation through institutional strengthening, safeguarding against private sector risks and promoting transparency, and undertaking functional and accounting separation are urgent reform measures. The development of renewable independent power producers within the context of power sector reforms and private operation of mini-grids and off-grids energy solutions will enable PNG to meet its universal electrification and net-zero targets. These findings are also relevant to other small and isolated electricity systems around the globe.