CLA Benefits Energy Access and Financial Inclusion in Papua New Guinea

PNG Power Ltd. (PPL), Papua New Guinea’s state-owned power company suffers from a host of operational and financial challenges, including billing issues, theft, and non-payment. Monthly losses range from 30-35%, undermining PPL’s ability to provide reliable service to customers. To address this challenge, USAID-PEP and PPL devised an Amnesty campaign – an innovative community outreach effort that aimed to convert illegal users into paying customers. Formal registration of household electricity customers did substantially increase, although poor collection rates and PPL’s financial losses persisted prompting the USAID-PEP and PPL teams to pause and reflect on the situation. Stakeholder consultation helped us to understand that customers found it difficult to make payments due to a lack of access to banking services and safe and convenient payment channels. At this point, USAID-PEP identified the opportunity to collaborate with local banks to find a path forward. Through a deliberate effort of external collaboration and adaptive management, USAID-PEP succeeded in helping our stakeholders to creatively address inefficient payment collection, limited financial resources, customer resistance and non-compliance, and other operational inefficiencies. External collaboration fostered by USAID-PEP, between PPL, local bank MiBank, electricity customers, and the project, has offered financial inclusion for customers by allowing them to open bank accounts and access a user-friendly application that allows for payments, transfers, and access to other financial services. Our CLA approach prompted the teams to leverage technology for efficiency and foster Public-Private Partnerships for service delivery that would be effective even beyond this particular case.