Pa­pua New Guinea’s new Sovereign Wealth Fund (SWF) is due to re­ceive its first rev­enues next year.

Business Advantage Papua New Guinea - - Contents -

Loi Bakani, Gover­nor of the Bank of Pa­pua New Guinea, says he is happy with laws set­ting up PNG’S pro­posed Sovereign Wealth Fund, which will re­ceive the state’s ex­pected in­come from re­sources ven­tures, most no­tably the Exxonmo­bil-led PNG LNG project.

Leg­is­la­tion to es­tab­lish the fund was passed in Fe­bru­ary 2012, while the pre­cise ad­min­is­tra­tion of the fund, which will be man­aged in PNG but in­vested off­shore, was be­ing fi­nalised at the time of writ­ing.

Pre­vent­ing ‘Dutch Dis­ease’

‘I am very com­fort­able with the new Or­ganic Law be­cause it meets the in­ter­na­tion­ally rec­om­mended San­ti­ago Prin­ci­ples of gov­er­nance and main­te­nance,' Gover­nor Bakani told the 2013 Pa­pua New Guinea Ad­van­tage in­vest­ment sum­mit.

‘My as­sess­ment is that, af­ter sev­eral it­er­a­tions, we have reached a state in which it will be of great value in sta­bil­is­ing the econ­omy and pre­vent­ing the “Dutch Dis­ease” phe­nom­e­non from oc­cur­ring and, if it does, to coun­ter­act it.’'

Pre­vi­ous gov­ern­ment es­ti­mates ex­pect the fund to re­ceive about US$30 bil­lion (K75 bil­lion) over the life of the PNG LNG project. Th­ese funds would make PNG’S SWF the 26thlargest such fund in the world, based on to­day’s val­ues.


The fund will con­tain four ‘sub-funds’. They are the Sovereign Wealth Fu­tures Fund; the Sovereign Wealth Sav­ings Fund; the Sovereign Wealth Sta­bil­i­sa­tion Fund and the Sovereign Wealth Man­age­ment Fund. It will be over­seen by an in­de­pen­dent board.

The fund will be in­vested off­shore but man­aged on­shore, with in­vest­ments un­der­taken by ex­pe­ri­enced in­vest­ment man­agers. It will be full in­te­grated with the na­tional bud­get.

Bank of PNG Gover­nor, Loi M Bakani

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