PAPUA NEW GUINEA SOVEREIGN WEALTH FUND IMMINENT
Papua New Guinea’s new Sovereign Wealth Fund (SWF) is due to receive its first revenues next year.
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.