SUMMARY UPDATE ON PNG’S PREPARATIONS FOR APEC 2018

Introduction

1.  I would like to thank the organizers for giving the opportunity for PNG to present its current preparations for APEC in 2018 and what the energy seeks to deliver.

2.  This summary update provides a snippet on the current developments of Papua New Guinea’s overall policy preparations, our current work in the energy sector and our plans for APEC in 2018.

PNG’s Policy Priorities for 2018

3.  Our policy priorities have been socialised through bilateral meetings with other member economies and partners to seek interest and support as well as for further refinement of the policy agenda before ISOM in December 2017.

4.  PNG also seek to establish a close working relationship with the current host Vietnam and Chile (next host in 2019) to ensure continuity in the work, and sharing of experiences. We will also seek further advice and assistance from the APEC Secretariat on policy as well as logistics (hosting guidelines) to ensure that APEC nomenclature are observed.

5.  For PNG, as a first time host, we understand the significance of hosting APEC, and we will ensure work in cohesion to establish a vibrant and close working relationship between the 2018 SOM Chairs Office and the APEC Secretariat.

6.  We understand the importance to send a Host Economy Representative (HER) in advance to establish effective communication and working relationship between the SOM Chair’s Office and the APEC Secretariat leading up to the host year and will ensure to have the HER in place before the Informal Senior Officials Meeting (ISOM) in December 2017.

7.  We have been discussing closely with the APEC Secretariat on hosting plans and discussing the notional calendar in advance to avoid clashes with other international meetings, events, etc.

8.  This year 2017 is an election year for PNG, our General Elections will be conducted from 24 June to 8 July, with the new Government to be formed by August. We would like to assure fellow APEC member economies that, these events have been planned with the APEC host year in mind and preparations for ISOM will not be deviated.

Papua New Guinea’s Energy Sector

9.  PNG’s economy is dominated by a large subsistence sector, sustaining the livelihood of 85% of the population and a capital intensive mining and petroleum sector (consisting mostly of oil, liquefied natural gas (LNG), gold, copper and silver extraction). The mining and petroleum extraction sector accounts for the majority of export earnings and Gross Domestic Product.

10.  GDP growth is forecast at 15% in 2015, slowing to 5% in 2016. Leading this growth is the oil and gas sector, with the country’s first full calendar year of LNG production in 2015. In contrast with mining and petroleum activity in the rest of the economy is expected to remain modest, with non-mineral growth forecast at 4% in 2015 and 2016.

11.  PNG has reached an important economic crossroad. The commencement of LNG production and exports marked an end to the large foreign direct investment inflows that fuelled a period of construction-led growth. What has emerged is a significantly more resource-dependent economy with modest growth of the job-intensive non-mineral sector.

12.  PNG has lacked an overarching National Energy Policy to guide the development of the energy sector over the past 40 years. This has resulted in the energy sector that has not kept pace with the increasing demands of PNG’s expanding economy and in fact is proving to be a bottle neck to economic growth.

13.  The development of the energy sector in PNG was guided by various Acts of Parliament resulting in fragmented regulatory frameworks. As a consequence critical regulatory functions of the sector are vested in different institutions by respective legislations creating a less efficient market and hinders investment and growth in the domestic energy space.

14.  The National Government saw the need to reform the electricity industry and its operating environment and consequently declared a Proclamation of (State of) Emergency on Electricity Services in 2014.

15.  This propelled the development of PNG’s first ever domestic National Energy Policy (NEP) from 2015 – 2016. The policy is complete and ready to be tabled in Parliament for endorsement and implementation.

16.  The NEP captures the whole energy sector (non-renewable, renewable and the electricity industry) and proposes reforms to streamline the institutional and regulatory structures to reflect this landscape and harness the full economic potential of the sector especially from the renewable energy sector.

17.  The NEP also reviews the existing legislation and institutional arrangements that are highly fragmented and recommends for the establishment of the PNG National Energy Authority (NEA) with specific and a clear separation of roles for the different energy resources and market segments.

PNG ENERGY SECTOR PLANS FOR APEC IN 2018

18.  PNG’s National Government overarching development policies such as the Vision 2050 and PNG Development Strategic Plan 2010 – 2030 strongly advocates for energy access and security through renewable energy development. Under the PNG Development Strategic Plan 2010 – 2030 the government envisions to have 70% of its household population have access to electricity by 2030, whilst Vision 2050 advocates for 100% power generation from renewable energy sources.

19.  PNG is mindful and committed towards efforts to meet the 2012 APEC leaders’ declaration to strengthen APEC Energy Security and the 2014 Leaders aspirational goal to double the share of renewables including in power generation by 2030 in APEC’s energy mix.

20.  PNG also values the initiatives of the Energy Working Group towards facilitating energy-related trade and investment that seeks to maximize the energy sector’s contribution to the region’s economic and social well-being, whilst mitigating the environmental effects of energy supply and use.

21.  PNG is committed to the ongoing efforts of the EWG, we have successful hosted the EWG48 in 2014 and EWG22 in 2001 in Port Moresby and look forward to hosting other APEC related meetings during our host year in 2018.

22.  We understand that the current domestic energy regulatory framework needs realignment and strengthening and have listed energy regulatory reform as a priority to promote renewable energy development to achieve energy security and sustainable growth under the Renewed APEC Agenda for Structural Reforms (RAASR) 2016 – 2020, PNG Individual Action Plans through the Economic Committee.

23.  We have developed a draft concept note titled ‘Workshop on Implementation of Domestic Energy Regulatory Reform’ and plan to socialise it within the Economic Committee meeting during SOM 3 in Vietnam.

24.  We also plan to host a two (2) day workshop on the margins of SOM 2 in our host year and seek the support of fellow member economies to share best practices and experiences towards our reform efforts. This project will be fully self-funding.

25.  The proposed workshop aims to develop recommendations for successful implementation of energy regulatory reform as well as build capacity towards implementing energy regulatory reforms.

26.  We understand that the successful implementation on our domestic energy regulatory reform will “promote development and deployment of low – emission energy supply” that “enhance energy security and create new sources of economic growth and employment” and support the initiatives of the Energy Working Group.

27.  We also believe that the success of the our domestic energy regulatory reform will promote greater energy access and request the support of EWG in APEC region for energy access as a aspirational goal for APEC towards.

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