Anthony L. D’Agostino and Benjamin K. Sovacool, “Unsold Solar: A Post-Mortem of Papua New Guinea’s Teacher’s Solar Lighting Project,” Volume 36, Number 1

Copyright 2012

Anthony L. D’Agostino and Benjamin K. Sovacool*


n comparison to countries with contiguous landmass, archipelagic nations have additional geographic hurdles in producing and delivering energy services. For

*Anthony L. D’Agostino, who holds a master’s in public policy from the National University of Singapore’s Lee Kuan Yew School of Public Policy, is a Ph.D. student in Columbia University’s Sustainable Development Program. His research interests include rural electrification, impact evaluation, and the climate change adaptation strategies of small-scale farmers in developing Asia. In his former position as a Research Associate at the Centre on Asia and Globalisation (CAG), National University of Singapore, his work examined pro-poor energy-sector trends among Southeast Asian countries, under the Rockefeller Foundation-funded Asian Trends Monitoring Bulletin project. His publications have appeared in Energy, Energy Policy, and Energy for Sustainable Development. Prior to joining CAG, he worked with the World Resources Institute and the U.N. Environment Programme. Benjamin K. Sovacool, who earned a Ph.D. in science & technology studies from Virginia Polytechnic Institute & State University, is currently a Visiting Associate Professor at Vermont Law School, where he manages the Energy Security and Justice Program at their Institute for Energy & the Environment. His research interests include barriers to alternative sources of energy, the politics of large-scale energy infrastructure, designing public policy to improve energy security and access to electricity, and building adaptive capacity and resilience to climate change in least developed Asian countries. He has served in advisory and research capacities at the National University of Singapore, U.S. National Science Foundation’s Electric Power Networks Efficiency and Security Program, Virginia Tech Consortium on Energy Restructuring, Virginia Center for Coal and Energy Research, New York State Energy Research and Development Authority, Oak Ridge National Laboratory, Semiconductor Materials and Equipment International, U.S. Department of Energy’s Climate Change Technology Program, Union of Concerned Scientists, the International Institute for Applied Systems and Analysis, and the International Energy Agency. He also has consulted for the Asian Development Bank, U.N. Development Program, and U.N. Economic and Social Commission for Asia and the Pacific. The author or editor of ten books and more than 170 peer-reviewed articles, he is a frequent contributor to Energy Policy, Energy & Environment, Electricity Journal, Energy, and Energy for Sustainable Development. The Journal of Energy and Development, Vol. 36, Nos. 1 and 2 Copyright Ó 2012 by the International Research Center for Energy and Economic Development (ICEED). All rights reserved.




example, while connecting subsea cables across islands to a centralized grid is one option, it is impractical for countries that cannot provide even basic energy infrastructure to its most accessible populations. As energy delivery by conventional technologies is more costly when population densities and per-capita requirements are low but distribution distances long, renewable energy in fact may present a least-cost option.1 Papua New Guinea (PNG) is one such nation where geography and economic status pose difficulties for energy service delivery. With a per-capita gross domestic product (GDP) of $1,170, PNG skirts ‘‘least developed country’’ status, yet its population of 6.6 million spread across more than 600 islands still ranks among the bottom in education, health, and development indicators.2 No official electrification rate exists, though estimates range from 7 to 12.4 percent, placing PNG among the world’s worst performers.3 Instead of resolving basic questions of extending and making access to energy affordable, the country’s policy makers have focused on large-scale, commercial energy projects with the goal of accumulating foreign exchange, which they consider a prerequisite to driving economic development. The $16.7-billion Papua New Guinea liquefied natural gas (LNG) project led by ExxonMobil is foremost among such undertakings, accompanied by other oil, palm oil, and natural gas ventures. Small-scale, decentralized efforts to promote electricity access have received less attention from government bodies. One such project is the Teacher’s Solar Lighting Project (TSLP), supported by World Bank and Global Environment Facility (GEF) assistance, with an original implementation period of 2005 to 2010. Through the TSLP, 2,500 solar home-lighting kits (SHLK) were to be sold through fixed-term loans to rural school teachers in select Papua New Guinea provinces. Yet after five years of operation, only one SHLK was ever sold and the project was cancelled before the completion date. Our study explores what happened. It begins by covering the study’s research methods and describing the stakeholders consulted during the fieldwork. The next sections review the country’s energy policies and resources, offer an overview of the TSLP, and present our research findings. Our study draws on findings from our in-country fieldwork and is novel in two aspects. To date, we find only three peer-reviewed papers examining any aspect of Papua New Guinea’s energy sector, despite the scale of ongoing projects and the nation’s purported substantial renewable energy resources.4 This paper therefore fills an ostensible research gap by addressing the energy needs of a developing country neglected in the literature that also has the capacity to become a significant energy exporter relative to its domestic needs. Second, the TSLP itself failed to achieve any of its guiding objectives and thus has instructional value as a ‘‘worst practice’’ example. However, the project’s fate was not due exclusively to the traditional techno-economic reasons cited in the literature on barriers to renewable energy diffusion, but also because of socio-cultural factors that are deemphasized in this literature.5 The extent of ‘‘socio-cultural’’ in these papers is limited to



consumer acceptance, whereas we believe tribal obligations, misperceptions of the cash economy, and financial overcommitment have been salient (but seldom discussed) barriers. Our study does not discount the real contributions from constricted access to finance, dysfunctional project coordination, and an unsupportive policy environment in hampering project progress. Yet based on fieldwork research we conducted in March 2010 with the various stakeholder groups involved in TSLP’s implementation, we explore the causes for failure using a more holistic lens than typically adopted in energy project assessments. This example of harnessing solar energy in Papua New Guinea highlights the potential challenges faced in energy services delivery. Private property rights are insecure because of a weak legal system, and social frictions instigated by tribal dispute or inequity-driven aggression render accessible equipment like polemounted solar panels vulnerable to damage or theft. The range and magnitude of threats to both project success and the effective use of renewable energy technologies (RETs) is wider in such an environment than in other settings where RETs are deployed for reasons of diffuse populations or poor utilities management. As a result of the physical threats to equipment safety, energy professionals and donor agencies operating in similar environments therefore should consider alternative arrangements that minimize those risks and the miscellaneous social tensions that asset ownership aggravates in societies with communal underpinnings. A community-based micro-grid with equipment cordoned off by fencing might be one option that satisfies the need for communal benefits while also insulating photovoltaic (PV) panels from physical risks like vandalism. More generally, examples like that of Papua New Guinea should encourage energy professionals to rethink the accepted wisdom about the universal suitability of renewable energy in developing countries. One of the motivating factors for that orientation was greenhouse gas mitigation but, had the TSLP succeeded in achieving its mitigation target within the stated budget, then abatement costs would have averaged around $98 per ton of carbon dioxide (CO2). Admittedly, mitigation was not the only project objective, but compared to alternative abatement opportunities identified by McKinsey & Company, this project was extremely inefficient in producing an abatement outcome.6 Considering the country’s low per-capita carbon footprint, promoting small-scale, fossil-fueled generators may be more sound from a development perspective and present greater opportunities for widely expanding access to electricity services. However, tensions between allocating to energy-directed development projects vis-a-vis ` other projects needs to be resolved. Likewise, development practitioners working on energy issues should articulate a more nuanced view of energy’s role in promoting economic development than just viewing it as a precursor to more hours of productivity and an input to labor-saving devices. Our fieldwork suggests that energy is a higher development goal, not a lower one, and thus attainment of energy services will come only when more primary needs are met, including



Institution International Finance Corporation International Finance Corporation Department of Petroleum and Energy World Bank Papua New Guinea (PNG) Institute of National Affairs Department of Education PNG Power ATprojects Inc./Light Up the World Foundation Goroka Primary School

Date February 2010 March 2010 March 2010 March 2010 March 2010 March 2010 March 2010 March 2010 March 2010

Location Via email Port Moresby Port Moresby Port Moresby Port Moresby Port Moresby Port Moresby Goroka Goroka District, Eastern Highlands Province Daulo District, Eastern Highlands Province Daulo District, Eastern Highlands Province Gumine District, Simbu Province Chauve District, Simbu Province Madang Sumkar District, Madang Province Port Moresby Port Moresby Via phone

Asaro Primary School

March 2010

Asaroka Lutheran High School

March 2010

Kel Bire Primary School Sorikoge Primary School Solar Energy Systems Talidig Primary School Project Support Services Conservation International Teachers Savings and Loan Society

March 2010 March 2010 March 2010 March 2010 March 2010 March 2010 January 2011

repayment of outstanding debts, financing children’s education, and satisfying community responsibilities. Research Methodology Our research findings are derived from in-country fieldwork and semi-structured research interviews conducted in March 2010, supplemented by the relevant documents available online and through news archives. We requested interviews from organizations, listed in table 1, that were either directly involved in TSLP or more broadly engaged in PNG’s energy sector and spoke with the individuals each organization considered most appropriate to our interview request. Interviews were



purposive, each lasting 30 to 60 minutes, and covered a range of questions both specific to the interviewee’s position as well as those pertaining to Papua New Guinea’s energy sector as a whole. To better understand the circumstances of school teachers and the condition of rural schools, we made site visits to villages surrounding Goroka and Madang, the capitals of Eastern Highlands and Madang Provinces, respectively. We met school teachers and principals at the primary and secondary levels, as well as parents whose children are currently in school. A Department of Education (DOE) employee provided real-time translation services for the Goroka-based site visits, while interviews around Madang were conducted in English. As the DOE themselves at the time of research did not have a comprehensive database of school locations (our trip in fact facilitated the collection of schools’ global positioning system or GPS coordinates for DOE’s records), it was not feasible to randomize the villages selected for interviews to achieve a nationally representative sample. Additionally, difficult terrain and roads restricted our access to areas that were further away from main roads. Instead, we adopt a case study format using feedback from schools and villages familiar to the local consultant. In Madang we visited the Solar Energy Systems retailer, which is currently participating in the World Bank’s Sustainable Energy Financing Project and had been involved in TSLP under the name of its parent company, Westlink Enterprises Ltd.

Papua New Guinea’s Energy Landscape While energy exports are significant enough to contribute a large share of PNG’s output, at 21 percent of real GDP in 2000, domestic energy consumption remains modest with per-capita demand at 11 million British thermal units (Btu’s) against the worldwide average of 24.6 million Btu’s.7 Oil dominates the country’s energy mix and accounts for 79.6 percent of total primary energy demand, with natural gas and hydropower at 15.8 and 5.0 percent, respectively.8 Proven natural gas reserves are estimated at 8 trillion cubic feet (0.12 percent of the world total) and 90 million barrels of oil.9 Despite its net oil exporter status, PNG relied on imports of finished petroleum products until the 2004 opening of InterOil’s Napa Napa refinery with a 32,500 barrels per day capacity. Among Asia-Pacific Economic Cooperation (APEC) member economies, PNG at 90 percent ranks highest in the percentage of population using solid fuels.10 Modeling by the Asia Pacific Energy Research Centre forecasts final energy demand to grow an annual average of 2.7 percent from 2005-2030.11 As part of the sector’s privatization process, the 2002 Electricity Industry Act established PNG Power Ltd. (PPL) from the erstwhile PNG Electricity Commission. PPL is the monopoly electricity provider and, as of 2005, possessed



generation capacity of 303 megawatts (MW), with 53 percent hydro and the remainder as thermal, operating across 19 mini-grids. Demand levels are low with peaks in 2004 reaching only 149 MW; nonetheless, power outages throughout the country are routine.12 Consequently, many businesses and large-use customers rely on generator backup, surge protectors, and uninterrupted power supplies to safeguard equipment. Complementing PPL, Korea’s Hanjung Power operates the country’s sole independent power producer, a 24-MW heavy oil-fired plant under a 15-year power purchase agreement with PPL. In 2001, a privatization policy was introduced that would have sold off government-owned assets but resulted only in corporatizing PPL. Under the 2002 Electricity Industry Act, the power sector is regulated by the Independent Consumer and Competition Commission (ICCC), which authorizes tariff changes, such as the 2.7 percent reduction across the board. Appealing to its corporate charter, PPL backed out of unprofitable rural electrification investments.13 The Asian Development Bank is working with the government to develop a law on public-private partnerships in the power sector. Much of the country’s energy policy has focused not on satisfying domestic demands or developing robust sectoral roadmaps but on incentivizing foreign investment into exploration and production activities like the Papua New Guinea LNG project. Once PNG LNG is completed, gas extracted from the Southern Highlands and Western Provinces will be piped to a liquefaction plant and storage site outside Port Moresby.14 A local ExxonMobil subsidiary will build and operate the U.S. $16.7-billion joint venture, expected to commence production in 2014, and over its 30-year life is forecast to generate a ‘‘total direct cash flow to the PNG government and landowners . . . estimated at US$31.7 billion (K114 billion).’’15 In contrast with the Kutubu oil project of the 1990s from which the government received slightly less than 25 percent of produced oil, the PNG LNG contract allows for no domestic off-take.16 Negotiators opted for full output exports, claiming that revenues generated at market prices would bring greater benefit to the country than domestic access to subsidized fuel. Project construction, however, has been marred by spats of violence. Clashes in the Southern Highlands Province erupted in early 2010, leaving more than a dozen dead and temporarily halting plant construction, catalyzed by ongoing tribal land ownership feuds and dissatisfaction with the project’s benefits-sharing agreement.17 Draft versions of national energy and rural electrification policies have been available since 2006 but remain incomplete. Additional policies governing renewable energy and geothermal in particular are under development.18A PPL spokesperson stated that without an explicit renewable energy policy, there is no money available for the utility to develop hydropower schemes. Without a rural electrification policy in place, no legal mandate requires service extension into off-grid areas. Instead, service expansion rests on a political patronage system with rural residents donating to local parliamentarians who campaign on promises of electrification. Tribal politics adds an additional layer of complexity with PPL



beholden to the demands of more powerful tribes. We visited villages where grid lines abutted or passed through, but for which electricity access was still nonexistent, allegedly because of tribal duress. Papua New Guinea also has significant potential for producing solar energy, but as of 2010 no nationwide assessment has been undertaken. The United Nations Environment Program’s (UNEP) Renewable Resource Energy Explorer (RREX) indicates global horizontal irradiance levels of 4.6-5.7 kilowatt-hours per square meter (kWh/m2), sufficient to merit further research into how PNG’s sizable solar resources can be harnessed. Hydropower has been the most explored renewable energy option, with the World Bank estimating 4,200 MW of economically feasible capacity.19 Origin Energy is considering one site in the Gulf Province that alone would produce 1,800 MW.20 Incomplete information on renewable energy resources has not prevented the development of RE projects. One of the first initiatives to promote RE’s expansion occurred between 1996 and 1998 with grant assistance from the Japan International Cooperation Agency (JICA). The PNG Department of Education led the Solar Lighting Kits for Rural Primary Schools program and distributed 320 kits over a 12-month period.21 The Australian company EnerTec executed the project and tasked a dozen employees with installing kits and training students and teachers in their usage. In contrast with the TSLP whose benefits accrued to teachers and possibly students, the JICA project was community-focused. While the lighting would enable teachers to work nights, the systems also powered instructional equipment for classroom use and for community gatherings held on school grounds. However, this created a dilemma whereby schools had lighting yet teachers themselves did not since JICA was unwilling to support a project assisting individuals. The kits consisted of either four or six 80-watt-peak (Wp) panels, with battery backup, connected to a control box to power 12-volt fluorescent lights or equipment, like a television or sewing machine, using an AC (alternating current) inverter producing 240 volts. Systems were delivered across 20 provinces and, because of the country’s geography, required land, water, and air transport. Authors of the project’s final report caution that
It is crucial for any further stage of this project or for those involved in similar projects that they take note of the cooperative and shared delivery mechanism adopted in this project. This 22 was essential for both the delivery of materials and in-services.

The advice is noteworthy for being ignored in latter efforts, like the TSLP, to distribute solar photovoltaic systems. According to one interviewee close to the JICA project, the kits became provincial district assets, outside the jurisdiction of the government of PNG, and therefore only the provinces could sustain the program. Yet the kits required maintenance and routine replacement of components like batteries and fluorescent



bulb fittings. With no follow-up funding from JICA or government bodies, province requests for repair work went unheeded. One government officer informed us that none of these panels are currently functional (2010) and doubts that any organizational learning arose from this project. In reflecting on the DOE’s involvement in renewable energy programs, he stated that they ‘‘should stick to educating.’’ As a result, the renaissance of a strong renewable energy industry in the country never materialized and the objective of strengthening the market and giving rise to sufficient competition was rolled over into a TSLP priority. At the time of the project proposal’s writing (2006), five companies were involved in providing renewable energy equipment and as of mid-2010 less than a dozen suppliers were active. Competition in most locations is limited to two suppliers, with the largest cities of Port Moresby, Lae, Madang, and Goroka having more. World Bank/GEF’s Teacher’s Solar Lighting Project
Objectives and Design: The World Bank’s Asia Sustainable and Alternative

Energy program, with co-funding from the Global Environment Facility (GEF) and the government of Papua New Guinea, developed the TSLP to provide school teachers with solar home-lighting kits. The project, the background details of which are listed in table 2, initially targeted school teachers who are posted to remote areas for typically less than two years of service before relocating. Since these areas often lack access to electricity, solar home system ownership presented a low-cost option to help teachers power radios or small televisions that would provide news, information, and entertainment, while being portable enough to make transport to their next posting a feasible option. For more than 80 percent of teaching staff, pay is administered through the Teachers Savings and Loan Society. This centralized payment system presented a sensible structure around which to build the project’s financing model that would leverage on teachers’ stable incomes. The SHLK program also was seen as an opportunity to improve teacher retention and willingness to accept postings in remote areas given poorer living conditions compared to urban areas. Five provinces were selected for piloting—East Sepik, Milne Bay, New Ireland, Western, and Western Highlands—and were nominated by the Department of Education to include each of the country’s four regions. A successful project would then lay the foundation for scaling-up solar panel sales from the 500/year rate during TSLP implementation to an estimated 2,000 units annually to other government employees and retail/commercial customers. Some of these sales would come from teachers’ neighbors, who would be exposed to electricity and solar-powered lighting for the first time.

BRIEF OVERVIEW OF THE TEACHER’S SOLAR LIGHTING PROJECT Papua New Guinea (PNG) Sustainable Development Program, Ltd. (originally), Papua New Guinea (1) Distribute 2,500 solar home systems to school teachers residing in 5 targeted provinces to increase their quality of living and extend their retention time in rural postings (2) Remove barriers to broader adoption of renewable energy technologies Global Environment Facility (GEF) Teachers Others Total $992,000 $1.65 million $300,600 $2.94 million


Project management: Key objectives:

Project financing (proposed):

Key stakeholders:

World Bank/GEF PNG Sustainable Development Program, Ltd. (through its subsidiary PNG Sustainable Energy Limited) Teachers Savings and Loan Society (TSL) Department of Environment and Conservation (DEC) Department of Education Department of Petroleum and Energy Solar home lighting kit retailers

Proposed Implementation: In advance of the TSLP, the World Bank’s Energy Sector Management Assistance Program (ESMAP) surveyed rural school teachers to identify average monthly expenditures.23 As seen in table 3, kerosine requirements for lighting cost teachers an average of K30 (U.S. $10) per month, or roughly 5 percent of monthly expenditure. Whereas kerosine use is restricted to lighting and cooking purposes, at high enough wattages SHLKs can power a range of appliances and lights and also offer environmental and public health benefits. In lieu of paying the routine, out-of-pocket costs for kerosine, TSLP teachers would have a comparable sum deducted from their monthly salaries to pay off the full, unsubsidized SHLK costs over the loan duration. The Teachers Savings and Loan Society (TSL), with headquarters in Port Moresby and branch offices throughout the country, was to serve as the financial intermediary since 39 percent of teachers in the five target provinces held TSL accounts and received their salary via direct deposit. While the TSL conventionally caps loan repayment at three years for home construction and school fees and two years for other expenses, loans for SHLK purchases would be administered with a five-year repayment plan. The TSL agreed to assume full credit risk and loss absorption for three years, giving rise to a ‘‘risk equalization program,’’ which established a revolving fund so that TSL could close out loans after three years. GEF would provide the upfront capital to start this mechanism, which would be replenished by incoming loan repayments



Expense Item Market food Store food Kerosine Transport Firewood Rent Other (cigarettes, stationery, betel nut) Total

Expenditure (Kina/month) 80 400 30 30 30 20 20 610

Source: Global Environment Facility (GEF), Medium-Sized Project Proposal Request for GEF Funding: Teacher’s Solar Lighting Project (Washington, D.C.: GEF, 2005). a The currency of Papua New Guinea is the Kina (PNGK). On January 15, 2012, the exchange rate was 1 PNGK = 0.47 U.S. dollars.

in years four and five. Any profits accrued to GEF after the five-year loan period could be applied to support new loans, either in additional provinces or to teachers unaffiliated with TSL. Upon approval of the teacher’s loan application, TSL would make payment to the local retailer with the teacher collecting the SHLK. SHLK users could participate in a feedback system and, in exchange for completing biannual owner’s reports detailing usage habits, would receive an additional half-month salary. This information would inform the product catalog’s composition and guide necessary adjustments to the project to aid in up-scaling. The main barriers to success identified during project preparation included theft, transport difficulty, and perceptions of poor technological quality.24 Project developers also anticipated reluctance to sign five-year loans and, therefore, planned on advertising the scheme on its merits of reducing kerosine use. A Project Management Unit was to be established, consisting of PNG Sustainable Energy Limited as the executing organization leading the unit. Government bodies to be involved included the Department of Environment and Conservation, tasked with designing battery recycling regulations, the Department of Education, Department of Health, and Department of Petroleum and Energy. An Advisory Committee, consisting of the World Bank alongside government bodies including the Department of National Planning and Rural Development, Department of Petroleum and Energy, and Department of Health, was to support the Project Management Unit.
TSLP’s Current Status: With only one SHLK loan ever disbursed and one system ostensibly ever sold, the World Bank closed the project in May 2010 and assigned the overall project outcome an ‘‘unsatisfactory’’ rating.25 According to pre-project documentation, TSLP’s developers had not envisioned its eventual assimilation into the



larger Sustainable Energy Financing Program (SEFP), a project that the World Bank approved in 2007. SEFP features the familiar objectives of strengthening renewable energy markets and financial institutions’ capacity for renewable energy-related lending and reducing kerosine consumption through solutions targeting households and micro-/small enterprises.26 The project currently is implemented across the South Pacific nations of Fiji, Marshall Islands, Papua New Guinea, Solomon Islands, and Vanuatu. SEFP launched in Papua New Guinea in late 2008 and is notably different from TSLP in that all individuals who qualify for loan support are eligible (not just school teachers), in its affiliation with two of the country’s most established financial institutions (ANZ and Nationwide Microbank), and in its support for multiple technologies, including solar PV, picohydro, and coconut oil-powered generators. SEFP’s prospects for success are promising given that its integration of lessons learned from TSLP’s failure should increase its effectiveness.

Research Findings In this section we profile the core determinants for the project’s failure based on our interview discussions and categorize them into factors specific to the project and its implementation and non-project issues stemming from Papua New Guinean culture and social constructs. Moreover, we believe these barriers illustrate key challenges that many energy development program planners may experience in other countries; they thus have the potential to enhance the efficacy of energy assistance programs throughout the world. In the case of Papua New Guinea and SHLK, several of the techno-economic barriers to renewable energy found in the literature are plainly visible, but perhaps more striking are the local socio-cultural characteristics that the literature on renewable energy barriers has downplayed or ignored. We believe these characteristics have impacted not only the TSLP, but earlier renewable energy projects and deployment efforts that did not last through to implementation. We believe the fault for TSLP’s collapse lies in no single reason, rather in the compounded effect caused by multiple, simultaneous factors. While the socio-cultural aspects in particular may be specific to projects implemented in PNG and therefore less applicable elsewhere, we still believe these findings should inform discussions about improving the design of solar home system deployment programs as well as sensitize project developers to the social factors that may inadvertently impede project success.
Project-Specific Issues—Organizational Discord: TSLP’s progress was hampered by weaknesses in staff capacity, inter-organizational communication and cooperation, and in the ambiguity of project leadership. One of the first warnings for impending issues surfaced in 2005 when GEF expressed interest in funding a project and approached the Department of Education. Considering the Department’s lead



role in the Solar Lighting Kits for Rural Primary Schools program and the experience they accumulated through its implementation, they were the likely candidate for the executing agency. The Education Department deferred, claiming insufficient capacity to support the program, and advised GEF to identify an alternative executing agency. In actuality, the DOE wanted nothing to do with the TSLP. A photocopied endorsement from the Department’s Secretary to the World Bank country manager in 2004 indicates that changes to the project proposal were ‘‘noted,’’ but included no hint of proactive support the DOE would lend the project. Instead of selecting a replacement organization with experience in renewable energy, they chose Papua New Guinea’s Sustainable Energy Limited (PNGSEL), a subsidiary of PNG Sustainable Development Program, which was established in 2002 to ensure the effective use of government royalties from minerals revenues to safeguard the country’s social and environmental welfare. However, the first PNGSEL employees chosen for the project came from PNG Power and had neither experience in renewable energy nor procurement. The World Bank/GEF did not remedy this situation by providing capacity-building support, despite possessing significant experience in supporting similar projects. Project documents, however, suggest the executing agency was selected on the grounds of project-relevant expertise. In turn, several stakeholders were critical of the Bank’s employees and commitment. Much of the criticism was targeted at the country director, accused of being too preoccupied with other projects to dedicate sufficient time to the TSLP. ‘‘He had his hand in too many pies,’’ said one respondent, while another summarized the director’s work style as ‘‘shooting from the hip’’ in that projects would be designed, drafted, and approved before complete details were fleshed out. More damning was the general complaint against World Bank staff who managed the project from an air-conditioned downtown office in Port Moresby, which would never enable them to experience first-hand the cultural and terrain issues that would eventually thwart the project. Since there was no permanent, in-country staff, personnel would fly in from the Australia office, which slowed down progress with the Project Advisory Committee whose own effectiveness was contingent on achieving a quorum. According to Bank documentation, several government departments were to play key roles in at least an advisory capacity, though not all felt empowered to fulfill those expectations. For example, one Department of Petroleum and Energy respondent felt as if that entity was brought into the project at the end and sat in on only one Project Advisory Committee meeting. Another respondent, in what seems like blame-shifting, shared that ‘‘this is GEF’s project because they funded it. The government will collaborate, but it does not always result in good outcomes.’’ These collective phenomena led to project fragmentation with organizations adopting a reserved or secondary role while the lead organizations themselves lacked the capacity or strategy for how best to effectively advance the project.



Project-Specific Issues—Implementation Setbacks: Meanwhile, the World Bank’s evaluation admits the project design was flawed by relying excessively on Teachers Savings and Loan Society’s project management to expedite the financial intermediation processes.27 At the center of this was the Society’s need to purchase a separate management information system module to manage TSLP lending since the existing system could not accommodate the project’s unique financing arrangements, borrowing requirements, and transaction volume. Because of the back-and-forth required with the Australian firm that helped run the Society’s retail banking system, 12 months passed before the management information system became operational and no loans could be approved until then. Ultimately only two suppliers participated in TSLP: Westlink Enterprises and Roots Electrical. Both companies took out loans to purchase SHLKs in 2008 with the expectation that sales forecasts were accurate. Westlink withdrew a commercial loan of K760,000 to purchase materials and was in third place in a tender bid to supply 1,100 units. The first and second companies in line eventually backed out and Westlink brought in 200 units as a trial. With the inventory sitting and no sales, Westlink attempted to exercise contract terms agreed by PNGSEL, which stipulated that after six months the latter would agree to repurchase systems originally bought for TSLP. A batch of 125 units was transferred without problem, but disagreement about the remaining 75 caused the two organizations to enter into a protracted legal dispute causing further delay. Roots Electrical had no such contract with the executing agency and went bankrupt from its loan and the SHLK inventory that could not be transferred. Ironically, the project intended to strengthen the renewable energy private sector by establishing an initial market, which would foster economies of scale and subsequent cost-cutting, but imposed unwieldy risks considering the speculative sales figures identified in pre-project planning. Another example of poor project design was in the chosen training system. Instead of developing a portable, bound manual on SHLK installation and maintenance, prospective customers were to watch a one-to-two hour competency based training course on an interactive computer in each retailer location, which at least one interviewee blasted as a waste of project funding. Since retailers never located beyond key cities, teachers would have to travel to the dealership at least once to complete the training, prior to even receiving a quotation to be submitted to the nearest TSL office, and perhaps an additional trip to collect the equipment. At least one trip per teacher could have been avoided by providing the necessary material in an illustrated and easily understood manual that teachers could then share with others living nearby. Project-Specific Issues—Marketing and Distribution: There are few communications channels available for reaching the country’s diffuse population, and reaching teachers in the most remote areas is even more difficult. National radio broadcasts are the most pervasive and can be accessed through battery-powered devices even in places where road transport is limited. Newspapers, on the other



hand, may circulate among the provinces but barely move beyond provincial capitals. As one respondent said, ‘‘people sell pieces of newspaper to roll up cigarettes. There is no chance of this being an effective medium of communication.’’ Newspaper access also suffers from a scale problem. For example, the Papua New Guinea Post-Courier is the best-selling newspaper in the country and has a daily circulation of less than 26,300: the equivalent of one newspaper for every 250 Papua New Guineans. Television is not an option either, especially since the target population of teachers without access to electricity by definition lack personal television access and live in communities also without access. Postal service faces difficult terrain issues. In short, effective marketing and information campaigns must overcome sizable barriers that restrict information flows. The executing agency and TSL employed several strategies to create awareness of the SHLK loans. An eight-page color product catalog was distributed that provided information about TSLP and clear guidelines on loan requirements and the application process. Newspaper and radio advertisements were used as well as a training video and a comic book brochure. However, the World Bank states that these measures did not collectively form a ‘‘robust marketing strategy,’’ which in turn decreased their effectiveness.28 Despite these marketing activities, most teachers we interviewed were unaware of the TSLP. Since they had all been teaching for several years, their lack of awareness was not caused by entering service only after the project. While some teachers claimed that at some time they had heard about TSLP, they were able to recall few details about what the program offered, required, or how to access the loan facilities. Had the DOE and TSL been more closely involved in the marketing efforts, existing communication channels such as TSL’s annual statement mail-out or DOE’s regular in-service sessions may have increased awareness of the TSLP’s existence. For those teachers who became aware of TSLP and expressed interest, we have little information about the factors that prevented a successful sale. One common criticism we found in our interviews was the one-size-fits-all approach in SHLK product diversity. Though a product catalog with an array of system sizes was envisioned, only one SHLK model was ultimately included in the program. This K3,200 (U.S. $1,070) model consisted of a 50-watt-peak(Wp) module, two 7-watt compact fluorescent lights, a 4-watt LED light, a 50-amp-hour battery, a charge controller, and power box but was sold without an inverter. In their final project review, the World Bank considered this system too large to be portable and too expensive to be affordable. According to one respondent, a diversity of products should have been made available that would have enabled the use of TVs, DVD players, mobile phone charging, and refrigerators/freezers in addition to lighting. However, while the system was labeled as ‘‘basic’’ in the single product catalog that was produced, 10 Wp or 20 Wp systems would have been even more basic and relevant to local needs. A 10 Wp still would have offered lighting and mobile phone charging at a more affordable price than the 50 Wp. Supporting those



claims, one retailer told us his sales for low-cost solar-powered cell phone chargers, of varying size but all costing less than U.S. $40, in one month exceeded 20,000 units. The uptick in sales is likely not attributed to income changes since wages remained stagnant for several years preceding 2010. Additionally, the lack of other options hinted at a longer time needed to transition into providing fullservice solutions as a traditional retailer, outside the initial targeted population of school teachers and eventually health workers. Aside from the likely mismatch between SHLK price and teachers’ willingness to pay, additional financial barriers made participation difficult. With a 1:1 savings to loan ratio, even TSL admitted that borrowing requirements were onerous and that few teachers would have the necessary savings for large loans. In contrast, most loans TSL currently processes are for personal care and low-cost household goods. Furthermore, teachers do not always receive their paychecks on time and are more likely to hold on to savings than deposit them. Since banks have a limited rural presence, even collecting paychecks may be costly, as in one story retold to us about teachers taking turns in flying out to collect paychecks. For teachers whose savings are tight, informal borrowing may be necessary to cover immediate expenses with interest rates further eroding savings. The process of transporting the panel from retailer to teacher may have been another impediment to teachers who were informed and interested. Procedures governing SHLK collection were absent from the Project Appraisal Document, which was unclear about how charges for the same would be paid. Since TSL acted as the financial intermediary, transportation costs presumably would be folded into the loan, further driving up SHLK costs and negatively impacting teachers residing in more remote and distant areas from their nearest retailer. As one interviewee involved in the rural primary schools project remarked, ‘‘getting panels around is not easy.’’ While the lack of sales caused this to not be an issue, clearer guidance should be included in future projects so that retailers and prospective customers have complete information about how panels will be delivered to the households and how fees accruing from transport will be apportioned.
Socio-Cultural Factors—SHLK-User Priorities: The primacy of household lighting over other household expenditures and the willingness of teachers to transition from kerosine to SHLKs are two contentions with opposing camps. One individual involved in the Solar Lighting Kits for Rural Primary Schools program noted how user demands have changed since the 1990s, especially with the number of new devices like mobile phones, but in spite of this, the interviewee still believes that teachers’ ‘‘primary service desire would be lighting.’’ An alternative camp holds that lighting is a significantly lower priority. One respondent succinctly described a more general attitude about electricity that


People’s real priorities are threefold: making sure they fulfill their tribal obligations, paying the bride price, and paying children’s school fees. . . . The village is able to gather K26,000 in two days to pay a bride price, but wouldn’t do the same for a hydropower system that would benefit the whole village.

There is little reason to believe this attitude does not also apply to teachers, especially since both urban and rural Papua New Guineans are governed by these social expectations. Moreover, even though teachers may receive a nominal salary in comparison to other professionals, they receive a salary in a country where a large share of the population does not, which in itself confers specific duties. In Melanesian cultures, like that of Papua New Guinea, personal success mandates sharing rewards with others. One Western respondent described it succinctly as ‘‘people who are doing well get bled by relatives who are less well off,’’ which anthropologists have written about since the 1930s and refer to as the ‘‘big man system.’’ Under this cultural setup, a big man commands authority by sharing his wealth in exchange for loyalty. Perpetually attempting to usurp other big men, his followers are under social obligations to return economic favors, with varying dominant currencies across areas.29 This concept of big men is circumscribed into the wantok system, translated from Tok Pisin as ‘‘one talk’’ or common language, which binds individuals into a social association with concomitant obligations of generosity and cooperation. A functional system when reciprocity is exercised, or in the equitable exchange of labor for goods and services, P. de Renzio notes the disproportionate burden-sharing of ‘‘the income-earning individual who finds it impossible to save any money or to advance his/her economic position because of the heavy demands that unemployed (or simply lazy) wantoks impose on the scarce earnings when payday comes.’’30 Teachers may not be conventionally deemed big men or big women, but the social expectations incumbent on them approximate the big man’s obligations of generosity and protection and, in turn, of converting what might be their personal savings into expenses that benefit the community over the earner. Anecdotally, when asking teachers and principals dichotomous choice questions about their likelihood of spending an equivalent sum of money on education (for one’s own child or a relative’s) or lighting, they unanimously opted for education. Reframing the questions and altering the sums involved, K20,000 for a bride price versus an SHLK (of significantly lower cost), respondents opted for the former and stated that custom takes precedence. The same respondents stated that computers and photocopiers were more urgent needs than lighting, although they did not explain how these items could be afforded over lighting or why their power requirements would not also allow for the simultaneous satisfaction of lighting demands. Non-teaching respondents similarly deemphasized the role of lighting and claimed that cell phone charging is their most pressing need. An informal sampling of respondents suggests the avoided costs of cell phone charging around K8 (U.S. $3) weekly and related transport costs (K0.4 each way) may rival household kerosine expenditures.



Socio-Cultural Factors—Costs and Perceptions: Initial assessments suggested that SHLK ownership would entail no added financial burden for adopters, since loan repayments would equal monthly kerosene expenditures. This may have been true, but factors of pervasive financial illiteracy and the relative newness of the cash economy into which PNG has entered affect individuals’ perceptions about costs and, in turn, their purchasing decisions. As one respondent stated, ‘‘[money is] not a part of our culture . . . we’re just learning to use it now.’’ This is particularly evident in regard to perceptions of the time value of money. When asked to choose between using kerosine and purchasing an SHLK, respondents did not mention repayment options, interest rates, or life-cycle costings—information that is needed to judge goods on comparable terms—but instead focused on upfront capital costs that would disqualify SHLK as an option. Despite similar monthly expenditures for either energy source, the SHLK’s cost structure appears to make a more lasting impression on potential customers. Reluctance to consider longterm payment plans also may stem from uncertainty about the future and potential financial obligations, including those entailed by the wantok system. Perception biasing extended beyond price into individual creditworthiness. One respondent referred to teachers as convinced of their loan ineligibility even before undergoing formal credit evaluation. Even without any knowledge of minimum borrowing requirements, they believe the requirements to be too high. Faulty perceptions may stem not only from a root cause of financial illiteracy, but from the reality that employed people in Papua New Guinea are often financially overcommitted. The same interviewee says that
People have been tied into payments for something or other over the next twelve months, and then made some promise regarding money for the following twelve months, and so on and so forth. People just do not have the money because they have committed it to school fees, giving to friends, and having traditional obligations.

Though a credit intelli-bureau was established in 2010 to centralize and provide participating financial institutions access to consumer credit data, banking consumers previously would borrow the maximum amount allowed at one institution and then move to the next.
Other Cultural Factors: Additional cultural factors, though not necessarily unique to Papua New Guinea, may have proved detrimental to TSLP. Theft, for example, is a common occurrence, and project documents included measures to safeguard SHLKs against theft. In our fieldwork outside Madang, we visited a school where several nights prior 10 computers, an inverter, and battery system, which had been connected to a pole-mounted photovoltaic panel, were stolen. Vandalism is another concern with one interviewee speculating on possible scenarios of intoxicated neighbors destroying equipment and cutting wires. Respondents informed us that tribal attitudes are deeply engrained in contemporary



PNG society and, because the legal system is dysfunctional, these crimes are committed with impunity, which could perpetuate repeat offenses. Ownership of electricity-generating assets like SHLKs creates a dual conundrum: individuals are burdened with social expectations of benefit-sharing while under threat of vandalism and theft, but they also are responsible for the long-run costs as well. Individuals working in the energy industry point to instances where energy technologies were provided to a group of individuals who expected maintenance services to be covered as well by the benefactor. One interviewee described a surf retreat in Kavieng, New Ireland Province, that provided free mobile phone recharging through a battery-connected coconut oil-powered generator. Instead of assuming responsibility for the service, especially since other recharging services required payment, beneficiaries expected the surf retreat to pay for replacement parts. This example and other anecdotes provided by interviewees imply social expectations upon the party involved in initial equipment installation to also be responsible for its maintenance and repair. This view unfortunately contradicts the belief expressed by other interviewees that ownership is a prerequisite for stewardship. Without a consensus on best practices in equipment provision, or any data from which to draw policy conclusions, a hybrid approach with options of either full ownership (paid in full or through a manageable financing scheme) or a leasing model with maintenance included would be more suitable to local conditions than any single ownership model.

Conclusion Though the TSLP experience is deeply intertwined with the history and culture of Papua New Guinea, we believe its relative failure does produce salient lessons for energy and development policy more generally. Results from the Teacher’s Solar Lighting Project aptly demonstrate that failures in renewable energy diffusion may stem not from techno-economic barriers alone but highlight the role that culture and social dynamics play in affecting individuals’ purchasing habits, priorities, and perceptions of new technologies. Aid projects, especially those designed by foreign agencies with limited experience and exposure to these factors, therefore may have to exercise more judicious pre-project consultations to discern prerequisites for possible success and identifying (and avoiding) strategies with limited chances of success. Donors do not always practice this environmental scanning and even in the World Bank’s concluding TSLP evaluation, the project’s risk assessment procedures did not prominently appraise factors other than technoeconomic considerations. However, this is not to discount the organizational and institutional barriers that affected cooperation among involved organizations and the ease with which market channels for new products could be opened, nor the one-size-fits-all lack of SHLK options available to prospective customers with



varying budgets and energy needs. TSLP’s inability to achieve its guiding objectives underscores the importance of devising development interventions that match local needs and are responsive to beneficiaries’ interests, rather than bending their interests to those of project objectives that mirror globalized norms like renewable energy expansion. The exact degree which cultural factors truly play in slowing down the development of such a program is difficult to measure, but it is essential to factor in these realities to project design and develop contingencies or multiple options where appropriate. While the available information on the solar schools program of the 1990s does not hint at facing problems of cultural substance, the fact that interview discussions frequently discussed this aspect indicates the relative gravity of the concerns. Indeed, the project’s documentation gives the appearance of a potentially effective development intervention, with the necessary components to facilitate widespread adoption. Had the project been designed in response to local conditions and accounted for Papua New Guinea’s social, cultural, and financial characteristics, then the chance of success would have been higher. It is likely that the absence of sensitivity to such characteristics was due in part to the pre-project consultation process to which one individual referred as ‘‘farcical.’’ The project document shows that extensive consultations were conducted with government bodies and other aid agencies, but it does not appear there were consultations with the beneficiaries themselves. It is in this final regard that the project, despite having achieved none of its original objectives, has instructional value. Affordable energy access cannot be assumed to be a universally held desire when there are competing priorities that collectively exhaust one’s finances. In such a case, projects that are sensitive to this reality, like those that promote low-cost solutions such as solar lanterns or cell phone chargers, stand a greater chance of success while more effectively using donor funds.
NOTES World Bank, Technical and Economic Assessment of Off-Grid, Mini-Grid, and Grid Electrification Technologies (Washington, D.C.: Energy Sector Management Assistance Program, The World Bank, 2007). World Bank, World Development Report 2010: Development and Climate Change (Washington, D.C.: International Bank for Reconstruction and Development/World Bank, 2010). New Zealand High Commission to Papua New Guinea, ‘‘Summary of the PNG Hydropower Workshop,’’ September 7–8, 2010, available at png_hydropower_report.pdf; Asia Pacific Energy Research Centre, APEC Energy Demand and Supply Outlook, 4th ed. (Tokyo: Institute of Energy Economics, 2009); and International Energy Agency, World Energy Outlook Electricity Access Database (2009), available at electricity.asp.
3 2 1



4 These three papers are B. K. Sovacool, A. L. D’Agostino, and M. J. Bambawale, ‘‘The SocioTechnical Barriers to Solar Home Systems (SHS) in Papua New Guinea: ‘Choosing Pigs, Prostitutes, and Poker Chips over Panels’,’’ Energy Policy, vol. 39, no. 3 (2011), pp. 1532–542; A. D. Owen and J. C. Lattimore, ‘‘Oil and Gas in Papua New Guinea,’’ Energy Policy, vol. 26, no. 9 (1998), pp. 655–60; and Y. Nagai, H. Yamamoto, and K. Yamaji, ‘‘Constructing Low Emitting Power Systems through Grid Extension in Papua New Guinea (PNG) with Rural Electrification,’’ Energy, vol. 35, no. 5 (2010), pp. 2309–316. 5 E. Martinot, A. Cabraal, and S. Mathur, ‘‘World Bank/GEF Solar Home System Projects: Experiences and Lessons Learned 1993-2000,’’ Renewable and Sustainable Energy Reviews, vol. 5, no. 1 (2001), pp. 39–57; S. Reddy and J. P. Painuly, ‘‘Diffusion of Renewable Energy Technologies—Barriers and Stakeholders’ Perspectives,’’ Renewable Energy, vol. 29, no. 14 (2004), pp. 1431–447; and S. Jacobsson and A. Johnson, ‘‘The Diffusion of Renewable Energy Technology: An Analytical Framework and Key Issues for Research, ’’ Energy Policy, vol. 28, no. 9 (2000), pp. 625–40. 6 McKinsey & Company, Impact of the Financial Crisis on Carbon Economics: Version 2.1 of the Global Greenhouse Gas Abatement Cost Curve (New York: McKinsey & Company, 2010), available at

Using data from the Energy Information Administration (EIA), International Energy Statistics (Washington, D.C.: U.S. Department of Energy, EIA, 2010); the Population Reference Bureau, World Population Data Sheet (Washington, D.C.: Population Reference Bureau, 2007); and the World Bank, Papua New Guinea Energy Sector and Rural Electrification: Background Note (Washington, D.C.: World Bank, 2004). Asia-Pacific Economic Cooperation (APEC)/Asian Development Bank (ADB), Energy Outlook for Asia and the Pacific (Manila: ADB, 2009).
9 8


Oil & Gas Journal, Worldwide Look at Reserves and Production, 2010. Asia-Pacific Economic Cooperation/Asian Development Bank, op. cit. Asia Pacific Energy Research Centre, op. cit.



B. Ururu, Presentation from Papua New Guinea Power Ltd., at the Joint e7/PPA Renewable Energies Workshop, Nadi, Fiji, November 21–25, 2005. N. K. Tai, Country Report: Energy Policy Situation in Papua New Guinea (Tokyo: Japan International Cooperation Agency (JICA) Training & Dialogue Program 2010, Energy Policy Course (A) (J10–00604), April 2010).
14 13


ExxonMobil, PNG LNG: Project Overview (Irving, Texas: ExxonMobil, 2010).

15 ACIL Tasman, PNG LNG Economic Impact Study, report prepared for ExxonMobil, (Melbourne/ Brisbane/Canberra/Perth/Sydney, Australia: ACIL Tasman, 2009). The currency of Papua New Guinea is the Kina (PNGK). On January 15, 2012, the exchange rate was 1 PNGK = 0.47 U.S. dollars. 16 17

A. D. Owen and J. C. Lattimore, op. cit.

I. Gridneff, ‘‘Oil Companies Deny Deadly PNG Clash Linked to LNG Project,’’ Australian Associated Press, 2010, and T. Grieder, ‘‘ExxonMobil Suspends PNG LNG Construction Work as Security Situation Worsens,’’ IHS Global Insight Daily Analysis, February 11, 2010.



New Zealand High Commission to Papua New Guinea, op. cit., and N. K. Tai, op. cit.

19 P. Johnston, ‘‘Pacific Regional Energy Assessment 2004: An Assessment of the Key Energy Issues, Barriers to the Development of Renewable Energy to Mitigate Climate Change, and Capacity Development Needs for Removing the Barriers,’’ Pacific Islands Renewable Energy Project (Apia, Samoa: Secretariat of the Pacific Regional Environment Programme, 2004), p. 94.

Origin Energy, Fact Sheet - PNG Renewable Energy Project, (Sydney, Australia: Origin Energy, 2010.
21 B. Watson, J. Volmer, and R. Jackson, Solar Lighting Kits for Rural Primary Schools: Project Report for Papua New Guinea (Waigani, Papua New Guinea: Department of Education, 2000). 22 23



Global Environment Facility (GEF), Medium-Sized Project Proposal Request for GEF Funding: Teacher’s Solar Lighting Project (Washington, D.C.: GEF, 2005).
24 25


World Bank, Implementation Completion Memorandum (ICM): Teachers Solar Lighting Project (Washington, D.C.: World Bank, 2010).
26 World Bank, Project Brief on a Proposed Grant from the Global Environment Facility Trust Fund for a Sustainable Energy Financing Project (Washington, D.C.: World Bank, 2006).

World Bank, Implementation Completion Memorandum (ICM): Teachers Solar Lighting Project.
28 29



M. D. Sahlins, ‘‘Poor Man, Rich Man, Big-Man, Chief: Political Types in Melanesia and Polynesia,’’ Comparative Studies in Society and History, vol. 5, no. 3 (1963), pp. 285–303, and D. K. Feil, ‘‘From Pigs to Pearlshells: The Transformation of a New Guinea Highlands Exchange Economy,’’ American Ethnologist, vol. 9, no. 2 (1982), pp. 291–306. P. de Renzio, ‘‘Bigmen and Wantoks: Social Capital and Group Behaviour in Papua New Guinea,’’ QEH Working Paper, QEHWPS27, Oxford Department of International Department, University of Oxford, United Kingdom, January 2000, available at dissemination/wpDetail?jor_id=35.