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Development assistance in Papua New Guinea

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Economic recovery in Papua New Guinea

The COVID-19 economic shock comes on top of existing fiscal and economic challenges faced by PNG. Australia is providing a comprehensive package of economic support to assist PNG’s response and recovery during this challenging period. We have agreed to refinance an existing USD300 million loan (provided in late 2019), and provide a further USD100 million loan, including to assist PNG to continue the delivery of core government services, such as healthcare and education.

Together with loan support we are providing technical assistance towards the Government’s reform program including its participation in an IMF Staff Monitored Program to help restore macroeconomic and financial sector stability and lay foundations for future growth. Australia will also continue to advocate for international financial institutions to support PNG’s fiscal position and economic reform agenda.

We are expanding our work in technical and vocational education and training (TVET), including through the Australia Pacific Training Coalition, to increase and improve training for jobs in growth industries, particularly for women trainees, and build links between TVET and labour mobility opportunities in Australia.

We will enhance support to the informal sector, which provides most of PNG’s employment. We are testing new approaches to improve access to finance for small and medium enterprises. We are supporting women business owners with skills training and access to finance.

We will continue to work to increase food production and strengthen linkages between smallholder farmers and markets to improve food security and boost exports.

Building business confidence will be key to attracting new investment, particularly in major pipeline resource projects, and restoring economic growth. We will continue programs to improve the business enabling environment.

We will partner with PNG to build climate-resilient economic infrastructure in core areas, including: telecommunications services for businesses, social services and emergency response; power for health services and other vital functions; water access for hygiene and sanitation; and air, sea and ground transport systems for access to goods and services. We will continue to invest in labour-intensive road maintenance and infrastructure to help create jobs for Papua New Guineans, including in Bougainville and Manus, to boost economic recovery.

We will continue to work through the Australian Infrastructure Financing Facility for the Pacific (AIFFP) to draw in financing for strategic and large-scale quality infrastructure projects, particularly in electrification, which will help economic recovery and local employment. Our investment in the Coral Sea Cable and policy advocacy will improve access to the internet and drive private sector growth.

Supporting investments

PNG-Aus Transport Sector Support Program

TSSP commenced in 2007 as a 15-20 year commitment to support the Government of PNG to achieve a well-maintained transport infrastructure network. This investment provides capacity building and technical assistance for governance, support services for the transport sector coordination body (TSCMIC) and Secretariat, policy advice, strategic direction, and financial and procurement oversight for the program.

Related documents*

Name of document Year published Type
Australia-PNG Memorandum of Understanding on Cooperation in the Transport Sector 2010 Memorandum of understanding
Design and Implementation Framework 2013 Design
Road Management in PNG: An evaluation of a decade of Australian Support 2007-2017 2018 Evaluation
ODE brief – Road Management in PNG: An evaluation of a decade of Australian Support 2007-2017 2018 Factsheet
Papua New Guinea Oro Bridges Reconstruction Project: Evaluation study 2018 Evaluation

Related links

Joint Understanding Technical Enabling Unit

This investment oversees a range of infrastructure projects in PNG, including new buildings at the Pacific Institute of Leadership and Governance and the University of PNG. This investment is also overseeing Australia’s efforts to rehabilitate infrastructure in earthquake affected areas of PNG’s highlands (following the 26 February 2018 earthquake) and provides a range of specialist advice on other infrastructure projects – such financial, technical, engineering, legal and procurement.

Incentive Fund

The Incentive Fund is an infrastructure program that has been in operation since 2000. It provides high-performing organisations with grants to improve service delivery or provide economic opportunities for the people of PNG.  This investment supports activities in a wide range of sectors including health, education, water and sanitation, agriculture and rural development but with a new focus on innovation and private sector development.

Related documents*

Name of document Year published Type
Incentive Fund Independent Progress Report 2012 Review
Incentive Fund IV Design 2014 Design

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Economic and Social Infrastructure Program

The Economic and Social Infrastructure Program (ESIP) will improve the prioritisation, quality, and sustainability of infrastructure investment in PNG. The investment will work in different subsectors at the project, sectoral and national levels. It will leverage project-level activities to create opportunities for deeper engagement in sector-wide planning and policy, and enable the identification and resolution of broader national level policy, financing and planning reforms and partnerships necessary for sustained long term change.

Related documents*

Name of document Year published Type
PNG Economic and Social Infrastructure Program (ESIP), Design Document, April 2018 2018 Design

Undersea Cables Project

This investment supports the development and delivery of a new undersea telecommunications cable to enhance telecommunications within PNG and Solomon Islands. The cable will be linked from a facility within Australia connecting to PNG and Solomon Islands. The cable will improve speed, reliability and accessibility of digital connectivity, and in turn allow potential opportunities for economic growth and development, including e-services in education and health.

Related links

Coral Sea Cable System

Private Sector and Rural Development

This investment provides support for a variety of broad-based economic growth and rural development activities and programs in PNG, including: trade facilitation and developing competitive markets; Pacific Financial Inclusion Program; Pacific Horticultural and Agricultural Market Access Program; Market Development Facility; Australian Centre for International Agricultural Research (ACIAR); the Australia-PNG Business and Development Steering Committee; and economic advisory councils.

Related documents*

Name of document Year published Type
Business Enabling Environment [PDF] 2015 Fact sheet
Agriculture: Rural Development, Markets and Trade [PDF] 2015 Fact sheet
Innovation and Partnerships [PDF] 2015 Fact sheet
Financial Inclusion [PDF] 2015 Fact sheet

Market Development Facility

The Market Development Facility (MDF) promotes sustainable economic development, through higher incomes for women and men, in our partner countries. In PNG, MDF focuses on five market systems within the agribusiness sector. These include value chain development for animal feed, emerging and niche products like honey. The team also works on backward linkages for fresh produce, and supports actors to improve the quality and achieve certification for export commodities, to connect them with international markets. During the COVID-19 pandemic MDF has remained active and is adapting and expanding partnerships to help in the immediate response and for longer-term survival, adaptation and recovery.

Related links

Market Development Facility PNG

Pacific Regional Market Access (PHAMA Plus)

PHAMA Plus improves economic growth and rural livelihoods for Papua New Guineans.

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Australia Infrastructure Financing Facility (AIFFP)

The Australia Infrastructure Financing Facility (AIFFP) partners with Pacific governments to design high impact, safeguarded projects and enable their delivery through financing and grants. COVID-19 has had a devastating economic effect on the region. The AIFFP’s focus on local jobs and private sector will provide much needed economic stability and stimulus for Pacific island countries and Timor-Leste.

Related links

Australia Infrastructure Financing Facility (AIFFP)

Australian Pacific Training Coalition

The Australia Pacific Training Coalition (APTC) is our flagship initiative in the technical and vocational education and training subsector (TVET). The program lifts the quality of TVET, improves employment outcomes for graduates and encourages greater investment in training. Since APTC was established in 2007, it has provided over 3,000 Papua New Guineans with Certificate III, IV and Diploma level Australian qualifications in the automotive, manufacturing, construction, electrical, tourism, hospitality, health and community sectors. In July 2020, Prime Minister Scott Morrison committed to a $45 million expansion of APTC in PNG over six years (2020-26).

Related links

Australian Pacific Training Coalition (APTC)

Australian Centre for International Agricultural Research (ACIAR)

ACIAR’s support to PNG focuses on providing economic governance, supporting human development and enabling inclusive economic growth through responsible and sustainable agricultural research. Our projects and programs are focused on promoting economic growth through sustainable agriculture, fisheries and forestry management. Our research aims to help secure improvements in food supply, food access and rural incomes for smallholders through increased productivity and enhanced access to markets and services.

Related links


Pacific Labour Scheme

The Pacific Labour Scheme is designed to help Australian businesses address chronic labour shortages and deliver a stable and productive workforce where local labour is not available. The scheme enables citizens from nine Pacific island countries and Timor-Leste to take up low-skilled and semi-skilled work opportunities in all sectors in rural and regional Australia for up to three years.

Related links

Pacific Labour Mobility

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