Development assistance in Papua New Guinea
Our economic assistance is designed to help PNG better convert its natural endowments into sustained broad-based growth, and create a more diversified economy, while maintaining economic stability. To support PNG's economic growth and prosperity, Australia will focus investments on:
- Economic stability: supporting improved macro-economic management, public financial management and economic reform.
- Infrastructure for growth: investing in high quality resilient and accessible infrastructure to drive economic growth.
- Shared and equitable benefits of growth: increasing trade, agriculture, and supply chains for more diverse livelihoods.
We will expand our investment in PNG's economic and social infrastructure from around $200 million per year to over $250 million per year by 2025-26. We will work to improve the prioritisation, quality, and sustainability of infrastructure investments in PNG. Australia has also committed around $1 billion in highly concessional financing (loans and grants) for high-quality infrastructure development under the Australian Infrastructure Financing Facility for the Pacific (AIFFP).
As PNG's largest trading and commercial partner, we will continue to grow the trade and investment relationship to drive sustainable and efficient economic growth. Through the Australia-PNG Economic Partnership, we are working with PNG to promote agricultural trade by strengthening value chains in PNG's key export sectors. We will also:
- strengthen biosecurity quality, standards and capacity, and support market access and entry for selected products to boost PNG exports to Australia and the region. CSIRO's Australian Centre for Disease Preparedness is supporting biosecurity capacity building for PNG to facilitate increased export of fisheries products.
- continue to provide technical advice and capacity building support under the PNG Institutional Partnerships Program (PIPP) to advance our common economic objectives.
Related links
- Australia-PNG Development Partnership Plan 2024-2029
- Comprehensive Strategic and Economic Partnership
Australia-Papua New Guinea Economic Partnership (APEP)
The Australia-Papua New Guinea Economic Partnership (APEP) is an eight-year investment (2022-2030) to assist PNG in its efforts to achieve sustainable and inclusive growth to lift the standard of living for all Papua New Guineans. The Partnership will work across four areas of engagement – macroeconomic stability; public financial and revenue management systems; more efficient markets; and economic dialogue and partnerships – with gender as a cross-cutting issue. Agriculture and resources are sector focal areas, and Western Province is the focus of the Partnership's place-based approach.
PNG-Aus Transport Sector Support Program (TSSP)
The Transport Sector Support Program (TSSP) commenced in 2007 as a commitment to support the Government of PNG to achieve a safer, more reliable transport system, enabling economic and social development. This investment provides capacity building and technical assistance to transport sector agencies in the land, maritime and aviation sectors for improved governance and reform; support services for the transport sector coordination body – Transport Sector Coordination, Monitoring, and Implementation Committee (TSCMIC) and Secretariat; and policy advice, strategic direction, and financial and procurement oversight for the program.
Related documents
| Name of document | Year published | Type |
|---|---|---|
| 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 |
| Australia-PNG Memorandum of Understanding on Cooperation in the Transport Sector | 2021 | Memorandum of understanding |
Related link
World Bank – Road Maintenance and Rehabilitation Project in PNG
Economic and Social Infrastructure Program (ESIP)
The Economic and Social Infrastructure Program (ESIP) improves the prioritisation, quality, and sustainability of infrastructure investment in PNG. The investment works at the project, sectoral and national levels. It leverages project-level activities to create opportunities for deeper engagement in sector-wide planning and policy and enables 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 |
| PNG's Economic and Social Infrastructure Program (ESIP) Midterm Report | 2022 | Review and Management response |
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. Activities include the 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.
Incentive Fund
The Incentive Fund is an infrastructure program that has been in operation since 2000 and is the longest running Australian aid program in PNG. 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. Over four phases of implementation from 2000 to 2021, the Incentive Fund delivered $270 million in development projects across PNG. A fifth phase began in July 2023 with a value of $150 million over 8 years.
Related documents
| Name of document | Year published | Type |
|---|---|---|
| Incentive Fund Independent Progress Report | 2012 | Review |
| Incentive Fund IV Design | 2014 | Design |
| PNG – Australia Incentive Fund: Review of Phase 1 to 4 (2021) | 2024 | Review and management response |
Related links
Australia Infrastructure Financing Facility (AIFFP)
The Australian Infrastructure Financing Facility for the Pacific (AIFFP) is partnering with the PNG Government and the private sector, to deliver lasting benefits for communities and the economy by responding to critical infrastructure priorities. The AIFFP finances quality, climate resilient infrastructure investments that adhere to robust social and environmental safeguards and maximises development outcomes, like job opportunities, during construction. AIFFP has already committed over $1 billion in financing to infrastructure works in PNG.
In partnership with PNG Ports Corporation, Australia is financing through the AIFFP a $620 million investment to repair and upgrade key ports around the country through the PNG Ports infrastructure program. The investment will transform Lae Port to be the key deep-water port servicing the Highlands and surrounding areas, as well as accommodating container ships to become the Pacific's premier transhipment hub. The wharf upgrades will benefit remote local communities, increasing their access to transport, essential services such as healthcare, as well as goods and trade. The ports are designed to withstand future climate change related shocks and stresses and will as a result have a design life of at least 50 years.
Australia also remains closely engaged with Papua New Guinea, Japan, New Zealand and the United States to deliver the PNG Electrification Partnership (PEP). Overall, Australia is to extend, expand and improve PNG's electricity grids, build institutional capacity, strengthen policy and regulatory settings, mobilise private sector investment and provide clean energy to rural and remote communities. Recent Australian investments though PEP include a $214 million package to support the repair and upgrade of key energy assets, a commitment confirmed during Prime Minister Marape's visit to Canberra in February 2024.
Together with PNG Power Limited, Australia through AIFFP's $92.0 million Laitim Hauslain investment will connect between 150,000-200,000 individuals to the electricity grid for the first time including households, schools and health clinics.
Roads are critical to connecting communities to services and markets and allowing businesses to grow. As part of our bilateral program, under the Transport Sector Support Program Australia maintains more than 1,850 kilometres (or close to 40 per cent) of Papua New Guinea's national priority roads.
Working in partnership with the Government of Papua New Guinea, Department of Works and Highways, AIFFP is also investing in the upgrade of the Wau and Sepik Highways, which will maintain 359km of critical roads linking remote rural agricultural communities. Along these highways, small-scale producers of fresh food, cocoa, fish, rubber, coconuts and vanilla, along with the mining, forestry, cattle and large-scale poultry industries, will have a better connection to domestic and international markets. Remote communities, especially women and children, will have improved access to essential services, such as health and education. At least 600 jobs in the transport sector will be created annually with a focus on increased access for women to jobs, ensuring more of the economic benefits from this project stay in the community. This investment is delivered in alignment with the Transport Sector Support Program.