Development assistance in Papua New Guinea
Economic recovery in Papua New Guinea
Australia’s economic engagement with PNG is being strengthened to assist PNG undertake significant economic reform and recover from the COVID-19 pandemic.
In December 2021, Australia provided PNG with a $650 million loan to help meet its 2021 Budget financing shortfall, assist with the ongoing health and economic impacts. 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 to be decision-makers and leaders at work.
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 continue to work through the Australian Infrastructure Financing Facility for the Pacific (AIFFP) to draw in financing for quality, climate resilient infrastructure that delivers long-term benefits for communities and the economy.
Australia is committed to continue pursuing a dynamic, multifaceted and comprehensive partnership with PNG, working together to resolve common challenges and build a more prosperous future.
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 |
Related links
Private Sector and Rural Development
This investment provides support for a variety of programs which promote broad-based economic growth and rural development in PNG, (including: trade facilitation and developing competitive markets; Pacific Horticultural and Agricultural Market Access Program; Market Development Facility); as well as driving private sector development in PNG; Asia Development Bank’s Private Sector Development Initiative and the PNG Partnership with the International Finance Corporation.
Through private sector and government interventions, this investment is building a stronger environment for businesses and addressing constraints to PNG’s economic growth.
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
In PNG, the Market Development Facility (MDF) contributes to economic growth and rural development through a focus on market systems. MDF seeks to obtain better export markets for PNG in coffee, cocoa, vanilla and livestock. Its work in improving coffee supply chains with major exporters contributes to increased premiums for small-holder farmers households and nutritional intake for farming families. MDF’s interventions also increase the incomes of smallholders farmers.
Related links
Market Development Facility PNG
Pacific Regional Market Access (PHAMA Plus)
PHAMA Plus is a biosecurity and agriculture commodity trade and market access program co-funded by DFAT and MFAT, with the overall goal to contribute to improved economic growth and rural livelihoods for Pacific peoples. PHAMA Plus seeks to build market and trade access for key commodities using a blended direct delivery and market systems development approach. It also provides technical biosecurity advice to government partners on plant and animal biosecurity, works with government partners to meet Australian import and export biosecurity standards for wild-caught prawns and chicken, and seeks to improve commodity quality exports for coffee, cocoa and coconut.
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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.
Related links
Australian Pacific Training Coalition (APTC)
ADB Improved TVET for Employment Project
Australia is providing an AUD15 million grant to strengthen ten technical and vocational education and training (TVET) institutions in PNG over a period of six years (2023-2029). Australia's grant complements an Asian Development Bank (ADB) loan to the Government of PNG, and will benefit nearly 18,000 students and enable the colleges to better respond to labour market needs in priority sectors, including construction and agriculture. Australia's funding will support the following key areas:
- enhancing the management and governance systems of the colleges;
- training new trainers and upgrading the qualifications of existing trainers;
- developing national training packages consistent with the PNG National Qualifications Framework and PNG's 'National Standards for Programme Accreditation and Industry Needs'; and
- upgrading and renovating infrastructure such as female dormitories and other teaching facilities to support female student access and increase enrolment.
This USD66.4 million investment (made up of an USD50m ADB loan and AUD15 million grant from Australia) will be managed by PNG's Department of Higher Education, Research, and Science and Technology.
Related links
Skills for Sub-National Growth Investment
The Skills for Sub-National Growth Investment (SNGI) expands the Australia Pacific Training Coalition in Papua New Guinea to include new partnerships with the Mount Hagen Technical College, the Highlands Agricultural College, and Bougainville Technical College. The investment targets the skills needs of key sectors in Papua New Guinea, such as agriculture and construction, and the skills demanded internationally, including through the Pacific Australia Labour Mobility (PALM) scheme. SNGI aims to improve the employment outcomes of technical and vocational college graduates; increase the co-investment in skills training and; lift the quality of training provided by the three colleges. SNGI is a $45 million investment over six years (2020-2026) to deliver an annual output of 400 – 600 new graduates at Certificate I to IV levels; update course designs to meet current industry standards; and upgrade the qualifications of TVET trainers.
Related documents*
| Name of document | Year published | Type |
|---|---|---|
| Design Document for PNG Skills for Sub-National Growth Investment [PDF] | 2022 | Design |
| Design Document for PNG Skills for Sub-National Growth Investment [DOCX] | 2022 | Design |
| PNG- Australia: Joint Statement of Intent on Technical and Vocational Education and Training [DOCX 347 KB] | 2022 | Agreement |
| PNG- Australia: Joint Statement of Intent on Technical and Vocational Education and Training [PDF 686 KB] | 2022 | Agreement; |
Pacific Australia Labour Mobility (PALM) scheme
The Pacific Australia Labour Mobility (PALM) 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 unskilled, low-skilled and semi-skilled work opportunities in all sectors in rural and regional Australia, except for agriculture which applies to all of Australia, for up to four years.
