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Private sector operations on ADB agenda

A SENIOR official at the Asian Development Bank has arrived in Papua New Guinea to discuss the bank’s support for private sector development.

ADB vice-president Lakshmi Venkatachalam met with senior government officials in Port Moresby and will visit major ADB-funded infrastructure projects including the Lae port tidal basin.

She will also participate in a roundtable discussion with development partners to discuss areas of cooperation and coordination, as well as visiting a financial literacy training site, which is part of the microfinance expansion project co-funded by ADB and the Australian government.

During the visit Venkatachalam will give a keynote address at the 2014 Papua New Guinea Advantage Investment Summit calling for more private sector participation in building PNG’s national infrastructure.

“ADB is working with the government of PNG to promote inclusive growth by upgrading and investing in renewable energy and transport infrastructure,” Venkatachalam said.

“As the government’s largest partner in infrastructure, we are also pursuing public-private partnerships to mobilise private finance and boost the efficiency and reliability of infrastructure services.

“Last week’s passage of the public-private partnership law, which ADB helped draft with the government, will help facilitate this investment and we congratulate the government on this landmark reform.”

Reform of state-owned enterprises is a key focus of ADB’s Pacific Private Sector Development Initiative, a regional technical assistance facility co-financed by ADB and both the Australian and New Zealand governments.

A recent ADB report produced by PSDI, Finding balance 2014: Benchmarking the performance of state-owned enterprises in island countries, shows that reforming SOEs in PNG would boost their contribution to inclusive economic growth.

The report indicated that while PNG’s SOEs averaged a return of 5.8% on equity during the 2002-2012 period, this was well below the cost of capital and followed total government transfers of more than 450 million kina ($A181 million) to subsidise their operations.

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