World Bank Approves $204M NEAT Project to Transform Papua New Guinea’s Energy Sector

The project will directly benefit rural households, small businesses, and communities across PNG, improving their access to electricity, which is vital for economic growth, healthcare, education, and overall development.

The World Bank has approved a $204 million initiative aimed at transforming Papua New Guinea’s energy landscape, improving access to reliable electricity for over 400,000 people. The National Energy Access Transformation (NEAT) Project will expand energy infrastructure, boost renewable energy generation, and provide affordable electricity to rural communities, significantly advancing the country’s development and climate goals.

Papua New Guinea (PNG) faces a significant energy access challenge, with only 20% of the population connected to the national grid. The situation is particularly dire in rural areas, where fewer than 15% of people have access to electricity. The NEAT Project aims to address this gap by expanding the electricity grid, implementing off-grid solutions, and densifying the existing grid network. This effort will help the government meet its goal of achieving 70% electrification by 2030.

“The NEAT project is a pivotal step in shaping the future of PNG’s energy sector. It aligns with our broader goals of reducing poverty, improving livelihoods, and contributing to a sustainable climate future by scaling up renewable energy,” said Khwima Nthara, World Bank Group Country Manager for Papua New Guinea. The project will directly benefit rural households, small businesses, and communities across PNG, improving their access to electricity, which is vital for economic growth, healthcare, education, and overall development.

Public-Private Partnership for Innovative Solutions

The project includes a public-private partnership component, where the International Finance Corporation (IFC) will pilot a mini-grid concession to support renewable energy solutions in off-grid areas. A $4.2 million grant from the Global Partnership for Results-Based Approaches will help fund last-mile electricity access, focusing on the most underserved communities. By using results-based financing, this initiative will incentivize the delivery of electricity to hard-to-reach areas.

This program is also part of a broader regional effort by the World Bank to accelerate renewable energy in East Asia and the Pacific. The $2.5 billion Accelerating Sustainable Energy Transition Program aims to reduce carbon intensity and foster sustainable energy growth. Over its lifetime, the program will contribute to a reduction of 60 million tons of greenhouse gas emissions, while providing over 20 million people in the region with access to clean, reliable electricity.

Long-Term Benefits: Clean Energy, Economic Growth, and Climate Resilience

The NEAT Project will bring transformative benefits to Papua New Guinea. More than 194,000 people will gain access to clean, reliable electricity through grid densification and expansion. Additionally, around 232,000 people in remote areas will benefit from off-grid renewable energy solutions, such as solar home systems and micro-grids.

This increase in reliable energy access will improve essential services like healthcare, education, and public safety, which have long been hampered by inconsistent power supply. Rural businesses will also have new opportunities for growth, while reducing their reliance on costly and polluting energy sources. The NEAT Project is expected to reduce carbon emissions by approximately 440,000 metric tons over its lifetime, contributing to the global effort to combat climate change.

A Collaborative Effort for Sustainable Development

The World Bank’s support for the National Energy Access Transformation Project underscores its commitment to helping Papua New Guinea achieve its energy and development goals. By improving the reliability of the national grid and expanding access to clean, affordable energy, the project is designed to foster long-term economic growth, improve living standards, and enhance climate resilience for PNG’s population.

As part of the broader regional program, this project positions PNG as a key player in the transition to a low-carbon future, ensuring that its people benefit from both sustainable development and increased energy security.