PNG Power, a state-owned enterprise in PNG, is in debt crisis and the Prime Minister describes it as "end-of-cancer"

The PNG government has warned that state-owned enterprise PNG Power is in crisis.

Papua New Guinea (PNG) unilaterally closed our office in July, and Taiwan immediately stopped purchasing spot liquefied natural gas (LNG). Relations between the two sides were frozen. Unexpectedly, PNG Power's own state-owned enterprises are also in deep crisis. The state-owned power company PNG Power is burdened with debts of about 1.3 billion Kina (approximately NT$9.3 billion). Prime Minister James Marape even described the company's plight as cancer, saying that it has reached the "terminal stage of cancer"; an official recently warned again that PNG Power is "standing on the edge of a cliff."

The PNG government issued a statement on August 26 stating that Marap bluntly stated in Congress that PNG Power was a "very sick state-owned enterprise" and even used the metaphor of cancer, saying that the company was not in stage 1, 2 or 3, but had entered "stage 4 of terminal cancer".

Marapp pointed out that PNG Power has faced problems such as insufficient investment, obsolete equipment, rising operating costs and difficulties in collecting electricity bills for many years. The government has invested nearly 1.5 billion kina (approximately NT$10.7 billion) to improve power infrastructure, but still cannot cure the problem. Therefore, it is preparing to promote structural reforms, introduce local government participation and partial privatization.

How sick is PNG Power? The responsible minister, Richard Maru, confirmed in Parliament on September 3 that the company was carrying debts of approximately K1.3 billion. Malu said that the company can still collect about 80 million to 90 million kina (approximately NT$570 million to 640 million) every month, and it can still pay current payments for fuel and independent power producers to maintain basic operations.

In fact, Maru revealed in August that PNG Power owed independent power producers and other creditors more than K1.2 billion, and the government was preparing to negotiate with creditors on a court-supervised debt restructuring plan to reorganize the company's balance sheet. Embarrassingly, the PNG government itself also owes PNG Power approximately K200 million (approximately NT$1.4 billion) in electricity bills.

Not only is PNG Power heavily in debt, it is also facing losses when selling electricity. And debt disputes have even gone to court. In July this year, the PNG Power Court ruled that PNG Power must pay approximately K180 million (approximately NT$1.28 billion) in unpaid electricity bills to independent power producer Dirio Gas and Power. Court information shows that PNG Power has failed to pay some of its accounts in full since September 2022, and the arrears continue to accumulate.

In September, Malu once again issued a harsh warning, describing PNG Power as a "company standing on the edge of a cliff" and requiring management to cut costs, sell loss-making assets and pay off debt. He said that only three of the company's power grid centers, Ramu, Port Moresby and Gazelle, were profitable, while the remaining operating locations continued to suffer losses.

What is even more noteworthy is that PNG Power is not the only state-owned enterprise in PNG facing financial pressure. The "2026 National Budget" admitted that many state-owned enterprises under Kumul Consolidated Holdings continue to encounter financial and operational challenges, affecting the ability to pay dividends to the government. The government is even preparing to pursue refinancing interests owed by state-owned enterprises, including PNG Ports, PNG Power and DataCo.

While state-owned enterprises are sounding the alarm, the PNG government itself is also burdened with heavy debt. The latest data from the IMF shows that PNG’s public debt has climbed from approximately 24 billion kina (approximately NT$171.6 billion) in 2017 to approximately 70 billion kina (approximately NT$500.5 billion) in 2025, an increase of nearly 2 times. The IMF ranks PNG's external and overall debt distress risks as "high", but it still assesses the debt's sustainability.

The IMF also pointed out that PNG’s public debt data does not yet fully cover the implicit government-guaranteed debt of state-owned enterprises, and complete data on the debt stock of state-owned enterprises cannot be obtained, highlighting that in addition to government public debt in PNG, the financial risks of state-owned enterprises are also surfacing.