ADB extends growth in the Pacific

The Asian Development Bank (ADB) is scaling up its financing in the country aimed at an annual assistance of more than US$300 million (K920 million) in 2018-2020.
The bank will reform its procurement and other business processes to adapt to the development needs of the Pacific Island countries without compromising its safeguards and integrity standards, it said. Staffing in ADB’s resident mission in PNG will also be strengthened.
These expansions in operations and resources are in line with ADB’s new approach to the Pacific, 2016-2020.
This announcement came following a discussion between the ADB president Takehiko Nakao and Prime Minister Peter O’Neill on Friday.
Nakao was invited for lunch with O’Neill during his stopover in Port Moresby, after he visited Solomon Island earlier this week.
He and O’Neill discussed how ADB can further strengthen its support to help the country meet its development goals. This is the second time they met, the first occasion being in June 2013 when Nakao visited PNG.
Nakao also congratulated the re-election of the Prime Minister on 2 August for his second five-year term and commended PNG for its economic and social development.
PNG has achieved a remarkable 13 straight years of economic expansion — averaging GDP growth of just under six per cent per year.
Over the last decade, PNG has benefitted tremendously from foreign direct investment in extractive industries and high commodity exports.
Primary school enrolment is now close to 90 per cent. Still, challenges remain in accessing energy, markets, and social services.
“ADB will continue to work with the government to support economic growth, rural development, and improved access to social services,” Nakao said.
O’Neill appreciated ADB’s assistance for infrastructure and provision of social services in the past 46 years. ADB is the largest development partner for infrastructure in PNG, particularly in transport and energy.
Since PNG joined ADB in 1971, ADB has approved loans and grants totalling $2.6 billion (K8 billion), of which $1 billion is concessional loans, $15 million grants and $74 million for non-sovereign projects. ADB’s support to PNG is guided by its country partnership strategy 2016-2020 approved in 2015, and aligned with the government’s development strategic plan, 2010-2030.
According to ADB, it would assist the country in coming years with planning and implementing a successful conversion of its natural resource wealth into inclusive and environmentally sustainable economic growth.
The bank’s focus would continue to be on transport, energy, and health sectors.
In the area of transport, ADB approved in June 2017, the first tranche (ADB $300 million with Australia’s co-financing of $11.5 million) of a $1 billion multi-tranche financing facility to rehabilitate and upgrade the Highlands Highway, the nation’s most strategic road that traverses its most populous and resource-abundant region.
Under an ongoing health sector development project, ADB is helping to upgrade 32 rural health clinics, and training more than 1000 health workers in such areas as obstetric care, midwifery, family planning, and clinical supervision.
Nakao indicated to O’Neill that ADB was planning a hybrid health sector project, amounting to about $400 million next year.
This project would have a component for hospitals and clinics in rural areas, and a policy-based component to support the health sector budget for good public financial management and health sector reform.
ADB is also planning a multi-tranche financing facility of $600 million for renewable energy to help PNG reach a target of 70 per cent electrification by 2030 from the current 13 per cent.