By PETER ESILA
JAPAN has provided Papua New Guinea with a K1 billion concessional loan to help the Government repay its debts, finance the 2021 National Budget and stabilise the economy.
Japanese ambassador Kuniyuki Nakahara signed the relevant paperwork with Foreign Affairs and International Trade Minister Soroi Eoe in Port Moresby on Friday.
Japan is also providing a K32 million grant for the PNG electrification partnership as agreed to by Australia, Japan, New Zealand and the United States in November 2018 during the Asia-Pacific Economic Cooperation Leaders’ Summit in Port Moresby.
Nakahara said the loan came with the interest rate of 0.01 per cent a year. The repayment period is 15 years.
“PNG can enjoy a grace period of four years and can begin to pay back the debt after its economy recovers,” he said.
“This K1 billion is the largest ever since the start of Japan’s official development assistance to PNG.
“Since the beginning of 2020, the whole world has been suffering from the outbreak of the Covid-19.
“The world economy has also suffered and the PNG economy is no exception.”
He said due to the decline in the prices of resources including crude oil, and the shrinking economic activities, PNG’s economic growth was expected to drop by 3.3 per cent in 2020, according to the International Monetary Fund. “Under such situation, our bilateral relationship between Japan and PNG should remains solid.”
Japan foreign minister Motegi Toshimitsu, who visited PNG in August last year, requested his Government through the Jica Covid-19 crisis response emergency support loan to provide the loan to Papua New Guinea.
By PETER ESILA