An overview of multilateral financial institutions with active programs in Papua New Guinea, including the IMF, World Bank, International Monetary Fund and Asian Development Bank.

Asian Development Bank

ADB has been working with Papua New Guinea (PNG) since 1971 and is the country’s largest multilateral development partner.

Since 1971, ADB has committed loans totalling $2.9 billion, grants of $214.4 million, and technical assistance worth $81.3 million for PNG.

Current projects include:

• US$680 million for the Sustainable Highlands Highway Investment Program
• US$400 million for the Highlands Region Road Improvement Investment Program
• US$480 million through the Civil Aviation Development Investment Program to improve 21 airports that handle the bulk of PNG’s domestic passenger and freight traffic
• US$150 million for the Town Electrification Investment Program, with the first two phases totalling $150 million
• The bank is also supporting the Port Moresby Power Grid Development Project, set to be completed in 2022

ADB expects to potentially increase its program to about US$2.7 billion for PNG across 2021-2023. The current programming period includes new infrastructure projects, particularly in the transport sector, that will help drive inclusive economic growth, improve the delivery of basic services, increase regional connectivity, and build resilience to climate change.

The ADB is expected to provide upwards of US$500 million in development loans to PNG in 2020, including US$100 million funding for reform of its state-owned enterprises and US$250 million under the ADB’s Comprehensive Response to the COVID-19 Pandemic facility.

Source: ADB

Further information

www.adb.org/countries/papua-new-guinea/main

The World Bank

The World Bank Group (WBG) has developed a strong relationship with national authorities, civil society and the private sector, as well as with development partners beyond traditional ‘donors’. A diverse range of WBG resources and competences are deployed through an intensively integrated Bank-IFC joint approach.

The WBG’s country partnership strategy is for FY2019 to FY2023. The aim is to support the government in pursuing sustainable and inclusive growth and building resilience to shocks across three strategic focus areas:

• improving macro and fiscal resilience;
• ensuring more effective and inclusive service delivery,particularly in underserved areas; and
• enabling private sector development and inclusive growth in non-resource sectors.

Addressing governance and institutional challenges are themes in the World Bank program. Close collaboration between the World Bank, the International Finance Corporation (IFC),and the Multilateral Investment Guarantee Agency (MIGA) is emphasized, with a particular focus on strengthening the business environment and job creation in PNG.

Recent projects include: PNG Agriculture Commercialization and Diversification Project, Urban Youth Development Project II, Improving Access to and Value From Health Services in PNG: Financing the Frontlines, Papua New Guinea COVID-19 Emergency Response Project and Papua New Guinea Development Policy Operation.

The strategy is underpinned by a Systematic Country Diagnostic (SCD) which is an analysis of the opportunities and challenges for PNG to end extreme poverty and increase shared prosperity in a socially and environmentally sustainable way, and builds on consultations with national and provincial governments, the private sector, civil society and academia.

Source: World Bank

Further information

www.worldbank.org/en/country/png

International Finance Corporation (IFC)

As the private sector arm of the World Bank Group, IFC supports small and medium enterprises and larger firms in Papua New Guinea through innovative investments and advisory services. It also works with government to create an investor-friendly environment to allow businesses to formalise easily and flourish.

Some of the IFC projects are:

• Working with Lighting PNG to help more than 1.8 million people, 22 per cent of the population, gain access to solar lights and mobile phone charging for the first time.
• Working with PNG Power to trial a grid connected solar power program for business in the capital Port Moresby.
• Partnering with PNG’s Tourism Promotion Authority on an international visitor survey and a tourism demand assessment, which identified five high value niche tourism markets for potential growth. The IFC is also partnering with the World Bank to help spur tourism development in East New Britain and Milne Bay, in line with the government of PNG’s strategic focus.
• Working with Tinanga, a local fresh produce wholesaler in Mt Hagan, to increase its processing capability and improve the reliability and quality of its fresh produce from farmers in the Western Highlands.
• Setting up the Business Coalition for Women (BCFW) in PNG.
• Helping PNG’s largest catering company, NCS Holdings, to become the first company in the Pacific to receive the world’s leading gender equality workplace certification.
• Supporting the government with projects aimed at enhancing the regulatory environment in key areas – taxation and capital markets.
• Working to issue Papua New Guinea’s AAA bond as part of its efforts to deepen the financial markets.
• Looking at a design for setting up road and ferry connectivity in Gulf Province that would sharply reduce travel times between the Highlands and Port moresby.
• Undertaking a scoping study of the Markham and Ramu valleys to assess agricultural opportunities and a business model for investors and customary landowners.

The IFC also advises government on developing business-friendly laws and regulations—increasing transparency, cutting red tape, and creating equal opportunities for all entrepreneurs, particularly women.

Source: IFC

Further information

www.ifc.org

International Monetary Fund (IMF)

Papua New Guinea is a member country of the IMF. The IMF conducts an annual Article IV consultation and report on PNG.

The IMF has deepened its engagement with Papua New Guinea relatively recently. In early 2020, it commenced a Staff-Monitored Program in Papua New Guinea to provide support and advice to the Papua New Guinea government over its budgetary challenges and financial reform agenda.

In June 2020, IMF approved the disbursement of US$363.6 million in emergency financing to help Papua New Guinea address urgent balance of payments needs created by COVID-19.

Further information

https://www.imf.org/en/Countries/PNG

European Union

The European Union as the second biggest grant donor to PNG, with a 40+ years of history of development cooperation in the country.

The EU’s current cooperation cycle, covering 2014 to 2020 is worth approximately EUR 200 million (K823 million). It is aimed at supporting support of a large number of development cooperation actions, with a special focus on rural development, water/ sanitation and good governance, and further actions in technical and vocational education and training, health, climate change, forestry and natural resource management, trade, human rights, peace-building, addressing gender-based violence, and others.

Further information

https://eeas.europa.eu/delegations/papua-new-guinea_en

European Investment Bank

In 2016, the EIB provided US$58.4 million for the bridge replacement programme in Papua New Guinea in cooperation with Government of Papua New Guinea and the Asian Development Bank.

The bank specialises in providing long term funding that matches the economic life of the underlying project. It focuses in PNG on trying to support infrastructure through off-balance sheet interventions, especially with renewable energy. It is looking at originating projects in renewable energy with independent power producers, who would enter into long term agreements with PNG Power.

The EIB regional office for the Pacific is in Sydney, Australia.

Further information

www.eib.org