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Government of PNG and World Bank sign agreements for rural development projects

August 11, 2010

PORT MORESBY, August 11, 2010—Today the World Bank and the Government of Papua New Guinea signed two agreements for concessional financing totalling US$40 million to significantly improve the livelihoods of rural communities in the country. Ferid Belhaj, World Bank Country Director for Papua New Guinea, Timor-Leste & Pacific Islands and Papua New Guinea Minister for Treasury and Finance, Hon. Peter O’Neill signed the financing agreements for two projects that will provide substantial support for agriculture and rural telecommunications services. They were witnessed by several Papua New Guinea Government Ministers, heads of departments and statutory bodies, and World Bank officials.

The funds will finance the Productive Partnerships in Agriculture Project (PPAP) and the Rural Communications Project (RCP), both of which aim to improve the livelihoods of rural communities. Over 80 percent of Papua New Guineans live in rural areas, largely dependent on agriculture for their livelihoods. Supporting rural populations is imperative to both social development and economic growth.

The PPAP will assist coffee and cocoa farmers in adopting improved farming practices, facilitate relationships between smallholder farmers and agribusiness and provide critical infrastructure for market access. The project will focus on areas dependent on coffee and cocoa production such as East New Britain Province, the Autonomous Region of Bougainville, Eastern Highlands Province, Western Highlands Province, Jiwaka Province and Simbu Province, with possible expansion to other areas subject to review.

The RCP will provide access to telecommunications for over 420,000 rural Papua New Guineans in the provinces of Simbu and East Sepik, and facilitate public Internet access in about 60 district centres. As in many previously isolated communities around the world, women are expected to benefit from improved access to communications, including for income-generating opportunities.

“Improving the lives of rural households is a priority for both the World Bank and the Government of Papua New Guinea,” said Mr. Belhaj. “These projects will improve the incomes and livelihoods of smallholder coffee and cocoa farmers and provide access to communication services for hundreds of thousands of people. This will open up opportunities for business growth, information on health and education, and contact with distant family members.”

Complementing Mr. Belhaj’s remarks, Minister O’Neill said he was grateful for the World Bank’s timely assistance.

“On behalf of the people and Government of Papua New Guinea, I sincerely appreciate this funding assistance from the World Bank,” said Minister O’Neill. “The World Bank has been very supportive of our development efforts over the years. I am equally confident that the agencies tasked with implementing these two important projects will ensure they are completed and delivered on schedule for the mutual benefit of our rural population.”

The PPAP was approved by the World Bank Board of Directors on 30 April 2010 for US$25 million. The RCP was approved on 22 July 2010 for US$15 million.


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