New Zealand Abandons Major PNG Power Project Following Escalating Tribal Violence
New Zealand has officially terminated a K17 million rural electrification initiative in Papua New Guinea’s Tsak Valley due to persistent security threats, foreign affairs officials confirmed the decision creates a significant setback for regional development plans while leaving thousands without power.
Persistent Conflict Disrupts Infrastructure Efforts
The Enga Province has struggled with internal conflict for decades, historical disputes over land and resources have intensified recently due to the influx of modern firearms. This specific project began following the 2018 APEC Leaders' Summit, it functioned as part of a broader partnership involving the United States, Australia, and Japan to modernize the country’s energy grid. The coalition aimed to support a national goal of connecting 70 percent of households to electricity by 2030, however, local instability has repeatedly stalled progress. Work faced severe interruptions, crews halted operations for 18 months in 2023 before a brief restart in early 2025 proved unsustainable in the face of renewed fighting.
Security Concerns Force Final Withdrawal
New Zealand High Commissioner Peter Zwart conveyed the final decision to local authorities on January 9, he cited unmanageable security risks and the excessive costs associated with protecting contractors during long delays. Foreign Affairs Minister Justin Tkatchenko acknowledged the withdrawal, he noted that keeping teams on the ground had become financially impossible given the volatile environment. The project originally intended to power at least 4,000 homes over a six-year period, construction stopped completely in August 2025 after violence flared again.
Contractors faced direct threats during the escalating unrest, the inability to guarantee worker safety made the project untenable for international partners. Officials have agreed to transfer procured high-voltage equipment to PNG Power Limited, the state utility provider will now determine how to use these assets. This handover attempts to salvage some value from the investment, yet it removes the external funding and technical support that drove the initiative.
Communities Lose Access to Critical Infrastructure
The cancellation leaves residents in the Tsak Valley without reliable power, local businesses and schools will remain off the grid for the foreseeable future which limits economic growth. This outcome represents a financial loss of approximately NZ$6.7 million for New Zealand aid budgets, it also places a heavy logistical burden on the Papua New Guinea government to secure future funding. Experts warn this event may deter other international donors from investing in volatile highland regions, the risk of asset destruction and danger to personnel is now too high for many organizations.
Authorities may redeploy some materials to the Ramu Grid to prevent total waste of the investment, meanwhile officials continue to urge local leaders to resolve tribal disputes to allow development to eventually return.
