ADB Vice-President Visits PNG to discuss Private Sector Operations
PORT MORESBY, PAPUA NEW GUINEA—Asian Development Bank (ADB) Vice-President Lakshmi Venkatachalam arrived today in Port Moresby, Papua New Guinea (PNG), where she will meet with senior government officials for discussions on ADB’s support for private sector development in PNG.
“ADB is working with the Government of PNG to promote inclusive growth by upgrading and investing in renewable energy and transport infrastructure,” said Ms. Venkatachalam. “As the government’s largest partner in infrastructure, we are also pursuing public-private partnerships to mobilize private finance and boost the efficiency and reliability of infrastructure services. Last week’s passage of the Public-Private Partnership law, which ADB helped draft with the government, will help facilitate this investment and we congratulate the government on this landmark reform.”
During her visit, Ms. Venkatachalam will call in a keynote address at the 2014 Papua New Guinea Advantage Investment Summit for more private sector participation in building PNG’s national infrastructure.
She will visit major ADB funded infrastructure projects including Lae Port Tidal Basin, and a financial literacy training site –part of the Microfinance Expansion Project co-funded by ADB and the Government of Australia.
Ms. Venkatachalam will participate in a Roundtable discussion with development partners to discuss areas of cooperation and coordination.
Reform of state-owned enterprises (SOEs) is a key focus of ADB’s Pacific Private Sector Development Initiative (PSDI), a regional technical assistance facility cofinanced by ADB, and the Governments of Australia and New Zealand.
A new ADB report produced by PSDI, Finding Balance 2014: Benchmarking the Performance of State-Owned Enterprises in Island Countries, shows that reforming SOEs in PNG will boost their contribution to inclusive economic growth. The report indicates that while PNG’s SOEs averaged a return of 5.8% on equity during the 2002-2012 period, this is well below the cost of capital and follows total government transfers of over PGK450 million ($181 million) to subsidize their operations. PNG’s recent adoption of a new community service obligation policy is an important step in placing all SOEs on a fully commercial footing. ADB is continuing to assist the government with the implementation of this policy.
ADB’s active portfolio in PNG totals $1.1 billion, including 22 ongoing loans for 11 projects; 8 grants, including 1 Asian Development Fund grant project; 9 technical assistance projects, and 2 private sector loan and equity operations.