fbpx ADB's Work in Papua New Guinea | Asian Development Bank

Papua New Guinea and ADB

ADB’s strategy for Papua New Guinea seeks to improve infrastructure and the private sector environment, governance, financial management, service delivery, promote inclusivity, and build resilience.

Member Fact Sheet, April 2022

ADB's Work in Papua New Guinea  Download Fact Sheet

Papua New Guinea (PNG) is a lower-middle income country, classified by ADB as a fragile and conflict-affected situation and a small island developing state. The economy is dominated by the capital-intensive mineral and petroleum extractives sector and the labor-intensive agricultural sector. The coronavirus disease (COVID-19) pandemic has significantly affected PNG’s economy, which had contracted by 3.3% in 2020, followed by a weak recovery to 1.3% growth in 2021.

ADB is one of the country’s largest sources of official development assistance, with average annual lending of $382 million over the 5 years to 2021. ADB’s support is aligned with the Government of PNG’s development plans, including the Medium-Term Development Plan 2018–2022, Development Strategic Plan 2030, and Vision 2050.

To date, ADB has committed 262 public sector loans, grants, and technical assistance totaling $4 billion to Papua New Guinea. Cumulative loan and grant disbursements to PNG amount to $3.07 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s ongoing sovereign portfolio in Papua New Guinea includes 17 loans and 1 grant worth $1.43 billion.

ADB has provided comprehensive support to help PNG in its recovery from COVID-19 pandemic. In 2020, ADB provided a $250 million COVID-19 Pandemic Response Option, which helped the government finance and implement its pandemic response plan. A separate grant for $3 million under the Asia Pacific Disaster Response Fund helped the government meet immediate pandemic related needs, such as purchasing essential medicines and medical equipment. A reform program that has disbursed $300 million of budget support in 2020 and 2021 aims to strengthen the operational performance and financial sustainability of state-owned enterprises (SOEs). An ADB technical assistance is also helping mitigate fiscal and debt risks.

ADB is financing large-scale infrastructure investments in transport and energy, including the ongoing $1 billion program for the rehabilitation and sustainable maintenance of 430 kilometers of highway in the highland areas. The program is also upgrading bridges, improving road safety, establishing logistics platforms and services for agricultural production, and supporting transport sector reforms.

A grid development project will upgrade and extend the transmission and distribution grid in the national capital, Port Moresby, by 2022. ADB has also supported reforms in the health sector. The program provides direct investments in the health system.

Villagers visit the Tsinjipai Community Health Post for information and treatments. Photo: ADB

Nonsovereign operations. Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Papua New Guinea as of 31 December 2021 was $31.67 million representing 0.23% of ADB’s total private sector portfolio.

Operational challenges. PNG faces operational and implementation challenges similar to other countries in fragile and conflict-affected situations. To improve program implementation, key issues that need to be addressed include delays in procurement and approval of contracts; insufficient counterpart funding; low capacity of executing and implementing agencies in contract management, financial management, and social and environmental safeguards; and the weak capacity of contractors and consultants in project management and coordination.

In 2021, the COVID-19 pandemic affected most projects and related civil works contracts, causing implementation delays due to international lockdowns and shipping and logistical constraints, among others. Contract management was challenging for active contracts and projects, particularly in energy and civil aviation.

Knowledge Work

In addition to financial assistance, ADB provides knowledge solutions, products, and services. For example, support for reforms related to SOEs, public financial management, and regulatory business environment, and advice for the development of social protection systems. Knowledge products include specific publications linked to project and sector work, as well as more regular publications, such as the Pacific Economic Monitor series. ADB organizes events that provide updates to stakeholders on the bank’s operations in PNG, economic updates, and tailored workshops under projects or capacity building program, for example, in financial management.

Shareholding and Voting Power

Number of Shares Held
9,960 (0.09% of total shares)

Votes
49,074 (0.37% of total membership, 0.57% of total regional membership)

*Overall capital subscription
$139.4 million

*Paid-in capital subscription
$6.96 million

* United States dollar figures are valued at rate as of 31 December 2021.


ADB Governor: Ian Ling-Stuckey MP
ADB Alternate Governor: Andrew Oaeke
ADB Director: Kisun Bang (Republic of Korea)
ADB Alternate Director: Yu-Peng (James) Tseng (Taipei,China)

Financing Partnerships

Financing partnerships enable ADB’s partner governments or their agencies, multilateral institutions, and private organizations to participate in ADB projects. The additional funds may be in the form of loans and grants, technical assistance, and nonsovereign cofinancing.

Cumulative cofinancing commitments in Papua New Guinea:

  • Sovereign cofinancing: $646.42 million for 24 investment projects and $10.37 million for 14 technical assistance projects since 1980
  • Nonsovereign cofinancing: $152.64 million for 1 investment project since 2009

In 2021, Papua New Guinea received a total of $337.8 million loan cofinancing from the Japan International Cooperation Agency and OPEC Fund for International Development for 2 investment projects, and $1 million grant cofinancing from the Government of New Zealand for the State-Owned Enterprises Reform Program - Subprogram 2.

Future Directions

ADB’s indicative country assistance pipeline for PNG, 2022– 2024, outlines planned investments of around $2.27 billion in transport (55%); public sector management (19%); energy (20%); education (2%); health (2%); finance (2%); and water, sanitation, and hygiene (1%). The pipeline strongly supports climate change mitigation and gender equity.

Planned transport, energy, and water projects aim to facilitate significant economic opportunities and support increased access to services to expand employment opportunities, including for women. ADB will also strengthen technical and vocational education and training institutions. A proposed project to promote financial inclusion will support increased access to finance. ADB anticipates helping finance health infrastructure to strengthen capacity for public health surveillance and COVID-19 testing in rural areas. To address fragility, ADB will continue to support public sector management reforms, including by helping to strengthen SOEs.

This article was originally published in the ADB and Papua New Guinea: Fact Sheet. Updated yearly, this ADB Fact Sheet provides concise information on ADB's operations in the country and contact information.

Contacts

Papua New Guinea Resident Mission
Established: 2003
Country Director: David Hill
Level 2 – Burns Philip Haus
Corner of Musgrave Street & Champion Parade
P. O. Box 1992
Port Moresby, National Capital District
Papua New Guinea
  Tel: +675 321 0400
  Fax: +675 321 0407
 Email
  www.adb.org/papua-new-guinea
  www.twitter.com/ADB_Pacific
  www.facebook.com/adbpng

Department of Treasury
The Treasury, Islander Dr.
P. O. Box 542 Waigani, National Capital District
Papua New Guinea
  Tel: +675 313 3507/3506 and 313 3557
 Email

Spotlight on Papua New Guinea

Tourism-Driven Economies in the Pacific to Feel Brunt of COVID-19 Pandemic — ADB

News Release

Tourism-Driven Economies in the Pacific to Feel Brunt of COVID-19 Pandemic — ADB

The economies of the Cook Islands, Fiji, Palau, Samoa, and Vanuatu are the Pacific countries likely to feel the brunt of the COVID-19 pandemic, according to a new report by ADB released today.

Pacific Energy Update 2019

Institutional Document

Pacific Energy Update 2019

ADB will invest over $1 billion worth of energy projects in the Pacific from 2019 to 2021 to increase renewable energy generation and improve access to affordable and sustainable electricity in the subregion. Read more

Pacific Economic Monitor – December 2019

Publication

Pacific Economic Monitor – December 2019

The 2019 growth forecast for the Pacific subregion has been raised from 3.5% to 4.2%, driven mainly by higher liquefied natural gas production in Papua New Guinea and increased construction expenditure in Samoa and Solomon Islands, as well as lower-than-projected economic decline in Nauru. Read more

3,200 People Graduate from Financial Literacy Course Supported by ADB, Australia, and PNG

News Release

3,200 People Graduate from Financial Literacy Course Supported by ADB, Australia, and PNG

The project has substantially delivered basic financial knowledge to huge numbers of rural people in Papua New Guinea. It has allowed people, particularly women, the opportunity to open bank accounts, do mobile banking from market gardens, and, overall, get better access to financial services.