ADB Approves $275 Million to Expand Finance, Power and Rural Roads in PNG

The investments aim to support inclusive growth by enabling private sector development, improving access to essential services, and advancing structural reforms in key sectors of the economy.

The Asian Development Bank (ADB) has approved three projects totaling $275 million to strengthen financial inclusion, expand access to clean and reliable electricity, and improve rural road connectivity in Papua New Guinea (PNG). The investments aim to support inclusive growth by enabling private sector development, improving access to essential services, and advancing structural reforms in key sectors of the economy.

“ADB is committed to investing in essential infrastructure, creating a more enabling environment for private sector development, and assisting the Government of PNG to implement transformative power sector reforms that improve lives and livelihoods,” said Soon Chan Hong, ADB Officer-in-Charge for Papua New Guinea.

Expanding financial access and supporting private sector growth

A $100 million policy-based loan will finance Subprogram 1 of the Improving Financial Access Program, which focuses on strengthening PNG’s regulatory and institutional framework for both domestic and international financial services. The reforms cover payments systems, remittances, credit markets, and capital market development, all of which are critical for improving access to finance for households and businesses.

The program is designed to reduce structural barriers to financial inclusion, lower transaction costs, and enhance consumer protection, particularly in a country where large segments of the population remain unbanked. By improving access to affordable and reliable financial services, the reforms are expected to support job creation, entrepreneurship, trade, and income-generating opportunities, especially for micro, small, and medium-sized enterprises (MSMEs).

ADB noted that Subprogram 2 of the initiative will build on these reforms in subsequent years, ensuring continuity and sustainability in expanding financial access across the country.

Strengthening low-carbon electricity supply

ADB also approved a $100 million loan, complemented by a $10 million grant from the Japan Fund for the Joint Crediting Mechanism, to support the Sustainable Energy Sector Development Program. Structured around two subprograms, the initiative aims to address long-standing challenges in PNG’s power sector while accelerating the transition to low-carbon electricity.

The program will support the government in establishing an enabling policy and regulatory framework to restore the financial and operational sustainability of the electricity sector. Key objectives include revitalizing the operational performance of PNG Power Limited (PPL), strengthening governance, improving service delivery, and increasing private sector participation in electricity generation and distribution.

By expanding access to clean, affordable, and reliable power, the program is expected to improve energy security, reduce greenhouse gas emissions, and support economic activities ranging from household enterprises to larger commercial and industrial operations.

Improving rural roads and market connectivity

The third project involves a $65 million loan to finance the Transport Project Readiness Facility, which will prepare and support the upgrading and rehabilitation of subnational roads across all four regions of PNG—the Southern, Highlands, Momase, and New Guinea Islands regions.

These roads form part of key economic corridors identified under the government’s Medium Term Development Plan IV (2023–2027) and the National Road Network Strategy (2018–2037). Improved road infrastructure is expected to significantly enhance connectivity for rural communities, particularly those engaged in the production of coffee, copra, cocoa, tea, vanilla, and other agricultural commodities.

Better road access will reduce transport costs, minimize post-harvest losses, and improve links to markets, health facilities, schools, and other essential services, contributing to more inclusive and regionally balanced development.

Supporting long-term development outcomes

Together, the three projects reflect ADB’s integrated approach to development in PNG, combining policy reforms, infrastructure investment, and institutional strengthening. By addressing constraints in finance, energy, and transport simultaneously, the initiatives aim to create a more resilient economic foundation and improve livelihoods across both urban and rural areas.

ADB emphasized that continued collaboration with the Government of Papua New Guinea and development partners will be critical to ensuring that these investments deliver sustainable and long-term benefits for the country’s people.