The Australian and Papua New Guinea governments want to build dams and hydroelectricity plants to protect the Kokoda Track and satisfy landowners who wanted a controversial mining project.
The Australian mining company, Frontier Resources, had been hoping to gain renewed PNG approval to explore a site near where 600 Australian troops died fighting the Japanese during World War II.
But during the PNG/Australian Ministers' Forum last month the two countries signed a deal rescuing the 96 kilometre track from mining.
A spokesman for Australia's Environment Minister, Peter Garrett, says officials from both countries are working on water and power supply matters in the Kokoda and Owen Stanley Ranges area.
Port Moresby's water supplier Eda Ranu's general manager Billy Imar says dams and hydroelectricity are alternatives to mining which would protect Port Moresby and provide jobs and infrastructure for locals.