Even though the Papua New Guinea electricity sector operates a single buyer model, it does have shortfalls, with the inability to fulfil commitments and rigidity of the contractual arrangements in the Power Purchase Agreement under the current model has raised concerns. This is according to findings of the National Research Institute Discussion Paper No. 203: Independent power Producers and deregulation in an island-based small electricity system. The case of Papua New Guinea by Associate Professor Rabindra Nepalv and Research Fellow Ronald Sofe gives an insight into prospects of electricity sector reform and the Development of IPPs. According to a statement released today by Dr. Osborne Sanida and the NRI, its noted that PNG power sector is in transition of growth in terms of power size. Policymakers should consider improving the planning of sector regulation and the structure of the industry. “Vast electricity shortages in PNG imply that the country should focus more on developing a framework for adequate supply of power to meet demand without imposing supply constraints.” “The need for adequate supply is greater in PNG’s power system.” “This is because the market is not interconnected, and hydroelectricity generation is prone to seasonal fluctuations.” “To this end, it is important for PNG Power Limited to remain solvent and improve bill collections while minimising the financial losses.” The report recommends that strong “political will” and the strengthening of institutional arrangements are the urgent reform measures needed in the PNG power sector to attract private sector investments in power generation.