The Australian government will contribute K190 million to the Connect PNG road project.
The funds will be used to construct the Trans-Island Highway, which will link Momase to the Southern and Highlands regions.
The Australian government has decided to fund the PNG government's transportation program, according to Minister for Treasury Ian Ling-Stuckey.
Australia will contribute $70 million (K170 million) on favourable terms, including a grant portion, and PNG will contribute K16 million, or just under one-tenth of the total cost. The Trans-National Highway is the subject of Tranche 1 of PNG Connect.
The 9-Mile Junction to Bulolo segment of the highway in Morobe Province, as well as the Passam to Lumi section in East and West Sepik provinces, will be covered by this funding from the Australian Infrastructure Financing Facility for the Pacific.
Mr Ling-Stuckey described it as a significant contribution to PNG Connect and the government's goals of transforming the domestic economy.
“The returns from building this type of road, connecting markets, far exceed the loan costs. This is good, sensible development,” Mr Ling-Stuckey said.
“PNG Connect is a fundamental part of our push to promote development from a grassroots level rather than relying on a handful of major projects, as has happened in the past.
“The government regards agriculture, forestry and fishing, and the small and medium entrepreneurial businesses serving those sectors, as the main drivers of sustainable national development.
“PNG Connect transport spending is the key to unlocking the economic power of the grassroots, and I am grateful to the Australian Government for supporting it.”
Mr Ling-Stuckey stated that the tranche 1 project could be the start of additional AIFFP road funding of up to $370 million for the Trans-National Highway.
The Trans-National Highway is a key component of PNG Connect, a 20-year plan to connect the country's four regions.
