K4.96 billion Australian fund starts to invest in Papua New Guinea infrastructure


At a time when private sector investment is stalling, the A$2 billion [K4.96 billion] Australian Infrastructure Financing Facility for the Pacific is ramping up and targeting projects that will help drive Papua New Guinea’s economy.

Australian and Papua New Guinea officials explore options for the landing site for the telecommunications cable from Australia to PNG. Caution Bay, PNG. Credit: DFAT under a CC license 2.0

Announced in July 2019 and designed to target unmet demand for infrastructure in the Pacific, all eyes are on the Australian Infrastructure Financing Facility for the Pacific (AIFFP) and what it might do to help Papua New Guinea with power, telecommunications and roads.

The fund is part of Australia’s Pacific Step-up program, aimed at deepening engagement with the region. As such, it is aligned to Australia’s foreign policy objectives and is managed by its Department of Foreign Affairs and Trade’s Office of the Pacific.

Talking during a recent webinar, the head of the AIFFP, Ben David, said the AIFFP’s board had endorsed eight projects in the past twelve months, with telecommunications and energy projects dominating the projects so far.

‘We are looking not to just do large capex project but to have this investment create local jobs and local economic activity.’

Notably, David suggested the onset of the COVID-19 pandemic had had an impact on the kinds of projects the AIFFP will consider.

‘We are looking not to just do large capex projects but to have this investment create local jobs and local economic activity,’ he said.

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David Osborne, Lead Economist, Office of the Pacific, DFAT noted that PNG had entered the COVID-19 crisis at a very difficult time and that the fund presented an opportunity for the country to build its way out.

‘There is a really strong potential for increasing the growth potential of the PNG economy, that is where this [AIFFP money] needs to be separated from the crisis lending that is occurring,’ he said. ‘The crisis lending you will see through the IMF is about dealing with the immediate vulnerability and the AIFFP needs to focus on the growth potential of the economy.’

More announcements on the way

Australia’s Foreign Minister Marise Payne.

Although the AIFFP was keen not to ‘steal the thunder’ of Pacific governments when it comes to announcing which projects are ready to roll out, the AIFFP’ Chief Investment Officer Rob Jauncey said that the PNG government had earmarked roads as a key priority and that some announcements were also very close in the area of renewables.

‘We are at a very, very advanced stage of discussion in terms of working with a big Australian company in PNG around low-cost solar generation in the country; hopefully, you will see further announcements soon,’ Jauncey said.

He also noted that there might need to be some flexibility in how the funding is delivered.

‘We are hearing a lot more demand for potential local currency financing, particularly given the economic risk and given that most business revenue will be in kina,’ he said. ‘There are potential opportunities for us to consider providing kina financing alongside Australian dollar or US dollar financing.’

Jauncy said the AIFFP was keen to hear from businesses ‘who have commercially viable infrastructure investments in PNG and are looking for borrowing. Drop us a line.’

Jauncey adds that the pandemic has given the AIFFP some flexibility around which sectors can receive funding. He used the tourism sector as an example, saying they would consider any project that ‘makes sense’.


  1. turi.charles@gmail.com says

    Very good initiative but how do the general public/interested investors get in touch with AIFFP.

    Can you please provide some contact details.

    Thank you.

    • From the AIFFP website:

      How to Apply for Loans and Grants
      Please contact aiffp@dfat.gov.au.

      If you are outside of Australia, you may wish to contact our embassies or consulates.

      • Jerry nicholas says

        Good, I own a small sme construction company and 100% local district kairuku hiri company where caution bay is locale.

        I want to participate in the spin off business.

        PH. 76561443.
        C/Email. Jerrynicholas0707@gmail.com

        Pls can you assist me how I can participate.

        Thank you.

  2. Samuel Koiari says

    I suggest that 80% of this funding should go towards SMEs and 20% to other industries.

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