Treasurer Ian Ling-Stuckey has started talks with the Asian Development Bank (ADB) on the goals for the ADB's $US2.2 billion in funding over the next four years.
After a virtual meeting with ADB country director David Hill, the treasurer said the Marape Government needed to continue its emphasis on the war on coronavirus while also developing the foundation for a more sustainable economy through initiatives like PNG Connect.
“At stake, this year is $US691 million, with a further $US1.5 billion through to 2024, consisting of direct budget support and project financing,” he said. “The financing is all on extremely concessional terms with most of it at interest costs of less than 2 per cent, eight years before having to repay back any of the loans, and 30 years to repay the loan. The ADB goes through internal assessment processes which aim for a rate of return on projects of at least 12 per cent. The loan costs PNG 2 per cent and the economic rates of return are 12 per cent or more – this is the basis for future growth.”
Follow-up talks, according to Ling-Stuckey, have already begun and will proceed in the coming weeks.
The focus will be on a variety of topics, including:
- Other organisations and sponsors could be able to help supplement the ADB's funding.
- Details on various steps to help the coronavirus war, including spending transparency.
- Meeting the government's obligations under the State-Owned Enterprise Reform Program, which has a budget of $US150 million this year.
- The Sustainable Highlands Highway Investment Program, the Civil Aviation Sector Development Program, the Power Sector Development Programme, the Urban Water Supply and Sanitation Project, and the Improved Technical and Vocational Education and Training for Employment Project are all making progress on more conventional infrastructure programs.
- On-Lending Agreements for State-Owned Enterprises, where there are ongoing debates about whether the National Government can bear the debt of financially sustainable SOEs.
