Ramu 2 Hydroelectricity Project

The project meets goals identified in the National Strategy for Responsible Sustainable Development for Papua New Guinea (STaRS), which prioritizes green energy, economic diversification, and sustainable economic and livelihood activities. Ramu 2 also aligns with the move toward hydro under the National Energy Policy 2016-2020. PNG needs significant improvements in energy capacity to reach this level of demand while implementing broad access to electricity, and the proposed Ramu 2 hydropower project could play a key role in meeting these goals.

While Chinese and PNG officials do not appear to have directly linked Ramu 2 to the BRI, the hydropower project clearly falls within the initiative’s focus on energy projects, which accounted for 44 percent of BRI construction in 2019. Shenzhen Energy, the major contractor for the project, describes itself as “[actively] responding to the Belt and Road Initiative,” including through the Ramu 2 project. The PNG government officially joined the BRI in June 2018 and announced that Shenzhen and Sinohydro had won the project bid in September 2018.

On the Chinese side, the Agency for International Economic Cooperation under the Ministry of Commerce chose IPPR International Engineering Co. Ltd and IPPA International Engineering Co. Ltd as the joint project managers of the “Aid Project on Western Pacific University of Papua New Guinea” through its own open tender process. In January 2020, the PRC gave DHERST a list of six Chinese companies and requested to begin the bidding process for the contract. In February 2021, Seladi-85 invited the six Chinese companies to bid, and in July 2020, IPPR and the Project Steering Committee evaluated the bids. Then, in August, Seladi-85 released its Tender Evaluation Report, and IPPR announced the selection of China Jiangsu International Economic and Technical Cooperation Group Ltd (CJI) as the private contractor for project infrastructure development. In response to DHERST’s request, the Solicitor’s Office granted legal clearance to CJI as the contractor in September 2020.

Lack of transparency

There was no project concept paper submitted for Budget Approval and NEC Approval, and there was no public involvement or opinion in the project, although the project will have significant economic and environmental effects. Furthermore, it appears that project officials did not consult the Provincial Governments during the planning process.
There is also a severe lack of publicly available information and documents regarding the Ramu 2 project. Unavailable or missing documents include the Submission to the NEC on Project Identification and Project Site, the pre-feasibility and feasibility studies, environmental impact assessments, RFP, financial and project agreements, PPA, and lease agreements.

Environmental Impacts

According to the IPBC quarterly review of 2015, an environmental impact assessment (EIA) was conducted as part of the feasibility study in 2013. The EIA, like the feasibility study report, is not readily available. INA tried several times to arrange an interview with the Conservation, Environment Protection Authority (CEPA) to confirm these reports and determine the extent of the ESIA studies conducted for the project and whether due process was followed. CEPA did not respond.

Lack of Feasibility Study

The assessment on the economic and financial benefits of Ramu 2, which was conducted in 2015 according to a joint JICA-PPL Master Plan for Ramu System Power Development, is not publicly available.

Project Delays

The Project has continued for more than 10 years since the NEC gave its approval for the project in 2011, more than 5 years after the launching of the project in 2015, and more than 4 years after Shenzhen Energy planned to begin construction in 2017. Over this time, costs have increased beyond the reported budget of US$902 million (K3.5 billion) to $939 million.