PNG, World Bank Sign Agreements to Boost Road Rehabilitation and Rejuvenate Critical Cash Crops

April 10, 2014

WASHINGTON D.C., April 10, 2014 – At a signing ceremony held on the occasion of the IMF-World Bank Spring Meetings the Hon. Patrick Pruaitch M.P., Papua New Guinea’s Treasurer and Axel van Trotsenburg, Vice President for the East Asia and Pacific Region at the World Bank, signed agreements that will officially release US$150 million in International Development Association (IDA) credits for two major initiatives.

The first agreement provides US$30 million in additional funds to expand the Productive Partnerships in Agriculture Project (PPAP)—currently the country’s largest agriculture program—which will aim to double coffee and cocoa production over 5 years for an estimated 60,000 small farmers and their families. It will build on existing successes of the project which, since 2010, has enabled 18,000 farmers to rejuvenate their coffee and cocoa, towards increasing production as well as incomes for rural households.

The second agreement provides for US$126.5 million in additional financing for the second phase of the ongoing Roads Maintenance and Rehabilitation Project (RMRP II) which started in 2011. Since it began, RMRP II has improved 140 km of national roads, supporting economic growth by improving connectivity and access to markets and services.  The new funds will enable the project to continue upgrading hundreds of kilometers of roads in the country's coastal provinces, and will also pilot alternative methods for road maintenance to generate new jobs in local communities, especially for women.

“These new investments build on successful projects that are already supporting agriculture, building roads and boosting incomes for people in Papua New Guinea,” said Axel van Trotsenburg.  “We hope this additional support for the Government will expand support for livelihoods in some of the poorest areas of PNG,”

“These two projects demonstrate strong, continued World Bank support for Papua New Guinea as it works to reduce urban and rural poverty, diversify the economy, and increase opportunities across a wide range of industries,” he added.

The Roads Project will upgrade priority roads in a number of coastal provinces, including the East Coast Road in Milne Bay, and pilot an integrated maintenance program for the Hiritano Highway, a major economic lifeline for the region, which connects Gulf and Central Provinces. Road maintenance programs will engage local communities, and are expected to create more than 1,100 days of employment.

The PPAP supports the creation of partnerships between farmers and NGOs, farmer group cooperatives and local businesses. The partnerships provide smallholders with knowledge in crops and pest management, while improving their access to extension services, certification schemes that bring higher prices, and other services. The project is also helping cocoa farmers manage the impact of cocoa pod borer, which has had a devastating impact on crop yields. PNG’s coffee and cocoa production have both declined over the last decade, with many trees over 40 years old.

We want to put money in the pockets of our people in rural areas, to help them reach markets and fight pests like the cocoa pod borer. Making investments in infrastructure and in our cash crop sectors is investing in our people,” said Minister Pruaitch.

“The PNG Government is committed to helping improve year-round access to markets and services, and we are pleased to work with the World Bank and tap into their global expertise as we expand these two important projects,he added.



The additional financing for PPAP is being provided by an IDA credit of US$30 million with US$6.4 million from the European Union, US$4.5 million from the Government of Papua New Guinea, and more than US$10 million from the private sector. The International Fund for Agriculture Development (IFAD), a current donor to the project, is expected to provide further support. Project implementation is led by the Department of Agriculture and Livestock, the Coffee Industry Corporation and Cocoa Board of Papua New Guinea.

The additional financing for the Roads Project is being funded through a credit of US$126.5 million from the World Bank’s International Development Association with US$30.5 million to be provided by the Government of Papua New Guinea. The project will be implemented by the Department of Works. 

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