Sinai and her neighbors are among an estimated 7 million people in Papua New Guinea who don’t have access to the country’s electric power grid. In fact, just a fraction of the population—less than 15 percent— is connected to the grid. And those who do have electricity pay high prices while contending with frequent blackouts, even in urban centers.
That’s one of the many reasons the Lighting Papua New Guinea program is creating markets for, and promoting the use of, modern, off-grid lighting products. With 300 days of sunshine in many parts of the country, there’s great potential to harness solar power for businesses and households.
The program, supported by the governments of Australia and New Zealand, has helped Sinai and about 1.6 million other people on this island nation light their homes and charge their cell phones using solar power—the first time this has been possible. It has provided solar energy to one-fifth of the country’s population, mainly in remote villages and rugged highlands, helping to boost small businesses and cut household costs.
Boosting Small Business
In markets outside Port Moresby, vendors selling fish and other foods now string solar lights along their stalls—a vast improvement from the lamps they used in the past.
“Solar is really portable and it gives me light every time I need it,” said Kero Mita, who lives in Wanigela village. “It is more advanced than the kerosene lamps which I was using for years. It has given me a standard of living.”
Subrata Barman, who leads IFC’s energy advisory program in the Pacific, has seen strong interest from the private sector to provide off-grid energy solutions in Papua New Guinea. “The Lighting PNG program has helped unlock this market by generating awareness about high-quality products and creating a platform for global manufacturers to partner with local distributors to take these products to rural communities,” Barman says.
Growing the Off-Grid Market
Lighting Papua New Guinea’s affiliate Lighting Global is the World Bank Group’s initiative to rapidly increase access to off-grid solar energy for the 1 billion people living without grid electricity worldwide. IFC has pulled from experience gained in Africa and Asia to help 10 global and local companies in Papua New Guinea—mostly solar manufacturers and distributors from other emerging markets—grow the local off-grid solar market.
As in other locations, solar power often replaces kerosene, which is expensive, potentially hazardous, and causes pollution. By substituting kerosene lamps with solar power, the program is reducing greenhouse gas emissions by 28,000 metric tons of a year—roughly the equivalent to taking 6,000 cars off the road.
IFC is now working with Origin Energy PNG Ltd, a subsidiary of Origin Energy Australia, to connect customers with a pay-as-you-go business model. This allows them to pay on a monthly basis for solar systems, like lights, a cell phone charger, and a radio powered by a rooftop panel. This is new for many customers, who have never had access to banking or credit services. IFC hopes that this new business model will be adopted and scaled by other players operating in Papua New Guinea.
“The whole idea behind pay-as-you-go was to make it affordable,” says IFC’s Barman. “We realized people would not be able to pay for solar systems upfront. So, we broke down the payments, which in some cases are lower than what they would pay for flashlight batteries.”
That’s what Luid Ronnie emphasizes to customers as he rides his bike from village to village, signing up citizens for solar kits. He grew up in this part of Papua New Guinea, and Origin Energy hired him to help with the Lighting PNG program. As he explains to potential customers, standard home kit costs about $250. Under the pay-as-you-go system, customers provide a 20-percent deposit and pay the rest over 12 months.
It’s a formula that appeals to many who hope to improve their quality of life. “The payment structure is very simple,” Ronnie says. “People are really happy to have solar. Having a good lighting system makes the home feel comfortable.”
Read more about how IFC is ‘Creating Markets.’