Monday 13 May 2024
Minister Assisting Prime Minister, Ian Ling-Stuckey meeting with AIIB President Jin in Beijing, China.
Papua New Guinea today joined the Asia Infrastructure Investment Bank (AIIB) of Beijing, and is among 109 members covering 81 percent of the world’s population and 65 percent of the global economy.
Minister Assisting the Prime Minister on Treasury Matters, Ian Ling-Stuckey affirmed PNG’s membership to AIIB, stating it opens the doors to more investment in good, sustainable projects which can lead to more growth and jobs.
AIIB supports both government and private sector “infrastructure for tomorrow” – i4t – projects
PNG’s flag was raised at the Asian Infrastructure Investment Bank in Beijing on 13 May 2024 in a historic ceremony marking PNG’s membership.
“The flag raising was with AIIB President Jin and senior members of his team, following on from Prime Minister Marape’s visit on 17 October 2023.”
The AIIB’s operational focus is on green infrastructure, connectivity and regional cooperation, technology enabling infrastructure, and private capital mobilization.
The AIIB green focus works well for PNG because we have been gifted with great green wealth – PNG has one of the largest forest areas in the world, and 6 percent of the world’s biodiversity.
“PNG will explore all the AIIB’s financing mechanisms, not just concessional sovereign loans. This will include options such as private sector lending, partial private sector loan guarantees and equity injections,” said Mr Ling-Stuckey.
He added, particular interest in private financing options is to support PNG’s moves towards becoming the food producer for Asia, and becoming a centre of down-stream processing of our agricultural, fisheries and forestry wealth.
“Members of the AIIB will add to PNG’s range of multilateral support partners, including the ADB, World Bank, IMF, and United Nations agencies.
According to Mr Ling-Stuckey, an interesting element of AIIB support is that financing can be provided in Chinese, European or US currencies.
Most other multilateral partners are limited to just one currency. This provides opportunities for PNG’s strategy of seeking good, cheap international financing, balanced with domestic financing.
“Currently, lending in US dollars is at an interest rate of over 6 percent, a rate not considered concessional under our own domestic laws.”
He however said, borrowing with the Chinese Remnimbi is currently only about 2.5 percent, and has advantages in lower cost borrowings, diversifying sources of funds, and strengthening linkages with the Remnimbi which can assist other trade partnerships.
Mr Ling-Stuckey emphasised, this is part of the Marape-Rosso Government’s economic reform program of lowering interest costs, adding, a program that is already delivering over a billion Kina in savings to the budget each year.