K135mil loan deal to be signed


A US$40 million (K135.86 million) loan agreement between Papua New Guinea and the World Bank for agriculture will be signed soon, Agriculture and Livestock Minister John Simon says.
Simon said the agreement signing was expected to take place this month.
He said the loan would be for coffee, coconut, spice and small livestock farmers in 12 provinces: East New Britain, West New Britain, New Ireland, Morobe, Madang, Eastern Highlands, Chimbu, Jiwaka, Western Highlands, Southern Highlands, Hela and Enga.
Simon said the loan was part of a strategy which was drawn up after issues were raised on the K340 million EU (European Union) funding focused on East and West Sepik.
He said it was appropriate that avenues were identified to cater for farmers in other provinces as well; this then led to strategising of the US$40 million loan agreement.
He said the loan would be invested in supporting farmers under the Productive Partnership in Agriculture Project (PPAP).
“The NEC had approved this project on Jan 15, in its decision No. 02/2020; the loan negotiations led by the Treasury Department were concluded in February where the loan was approved by the World Bank the following month,” Simon said.
“According to World Bank, the US$40 million is a component of the approved US$100 million (K339.67million) aimed at addressing some of the country’s most pressing human capital needs; the projects will deliver critical improvements in some of PNG’s most urgent priorities: health services – particularly
in rural areas – as well as agriculture, nutrition and youth employment.”
The project is estimated to benefit 15,000 households or more than 70,000 farmers.
He said there were three components to the project which include:

  • Institutional capacity building – This component would ensure improvement in the performance of sector institutions while enhancing industry coordination in cocoa, coffee, spices, coconuts and livestock.
    Activities under this component would include capacity building at the Department of Agriculture and Livestock as well as commodity agencies, provinces and districts to ensure effective coordination for service delivery;
  • Market access – Market access is a vital component that would enable easier access to trading and access to markets, goods and services adding also that approximately 50 kilometres of feeder roads were envisaged to be rehabilitated under this component; and,
  • Productive partnership – Simon revealed there would be two sub-components focusing on productivity, quality and formation of producer organisations, aggregation and value.


  • Now what is the true story.
    2019 July 25 www. eeas.europa.eu/delegations/papua-new-guinea/65829
    ‘The geographical scope of the project will initially be focused on the East Sepik and Sandaun provinces. After the mid-term review of the project, cocoa value chain development activities will be considered for expansion to the neighbouring provinces of Morobe and Madang for those activities that require heavier localised investment’

    The 2 Sepik provinces are sharing K340 million from EU which will later include Madang and Morobe so why does Minister Simon now say the Morobe & Madang will share this small K40 million World Bank Loan with another ten provinces.

    Need some clarity please

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