In­vest­ment Sum­mit pro­vides fo­cus on in­fra­struc­ture

Ev­ery year, in­ter­na­tional in­vestors, PNG gov­ern­ment of­fi­cials and lo­cal en­trepreneurs come to­gether for the Pa­pua New Guinea Ad­van­tage In­vest­ment Sum­mit. In 2014, the two-day sum­mit had a spe­cial fo­cus on in­fra­struc­ture devel­op­ment.

Business Advantage Papua New Guinea - - Feature -

The fourth PNG Ad­van­tage Sum­mit, co-hosted by the Port Moresby Cham­ber of Com­merce and Busi­ness Ad­van­tage In­ter­na­tional, drew around 300 in­ter­na­tional and lo­cal del­e­gates to the Gate­way ho­tel in Port Moresby to hear two days of pre­sen­ta­tions, panel dis­cus­sions and high level net­work­ing.

With the com­mence­ment of Pa­pua New Guinea’s first-ever LNG ship­ments only re­cently un­der way, there was an air of cel­e­bra­tion at the event. Wel­com­ing del­e­gates to what he de­scribed as the ‘Dubai of the Pa­cific’, Na­tional Cap­i­tal Dis­trict Gover­nor Powes Parkop spoke of the ma­jor projects that are trans­form­ing Port Moresby in a con­tem­po­rary metropoli­tan city, in­clud­ing fa­cil­i­ties for the 2015 Pa­cific Games (see page 12) and ma­jor roads ex­pen­di­ture.

Busi­ness in­cen­tives

PNG’S Prime Min­is­ter Peter O’neill used his key­note ad­dress to flag ‘gen­er­ous, more in­cen­tives, in­clud­ing tax hol­i­days for se­lected in­dus­tries like tourism, agri­cul­ture and man­u­fac­tur­ing, to en­able em­ploy­ment op­por­tu­ni­ties and busi­ness op­por­tu­ni­ties’, as well as ac­knowl­edg­ing with frank­ness the hard work that will be re­quired to make PNG’S state-owned en­ter­prises ef­fi­cient and prof­itable.

Guest speaker David Thomas, an ex­pert on the BRIC coun­tries (Brazil, Rus­sia, In­dia and China) then had both politi­cians and del­e­gates en­thralled with his prac­ti­cal

Ar­eas for in­vest­ment

There is clearly more in­vest­ment to come in the re­sources sec­tor, with gas a lead­ing fo­cus.

‘There is enough gas ca­pac­ity in PNG for at least three more LNG trains over the next five-to-seven years,’ noted Peter Bot­ten, Chief Ex­ec­u­tive Of­fi­cer at Oil Search Limited, ‘which would re­quire an in­vest­ment of about an­other A$25 bil­lion. The amount of proven gas to­tals about 14 tcfs. The first PNG LNG plant con­tains nine tcf.’

Many in­vest­ment ex­perts, how­ever, em­pha­sised that new in­vest­ment op­por­tu­ni­ties lay out­side of the re­sources sec­tor.

Michael Block, Chief In­vest­ment Of­fi­cer at PNG’S largest su­per­an­nu­a­tion fund, Nam­bawan Su­per, listed en­ergy (‘we’re look­ing at so­lar farms right now’), agri­cul­ture (in par­tic­u­lar safe, re­new­able forms), telecom­mu­ni­ca­tions, fi­nance, tourism and ed­u­ca­tion.

‘They’re all the ar­eas that we think will be ar­eas that will have a diver­gent and dif­fer­ent re­turn,’ he says.

Mean­while, out­go­ing Coun­try Co­or­di­na­tor Carolyn Black­lock said the IFC, the World Bank ‘s pri­vate sec­tor arm, was par­tic­u­larly look­ing for in­vest­ments that de­liv­ered the devel­op­ment out­comes: ‘We want job cre­ation, par­tic­u­larly cre­ation of good jobs.’ ‘What we’re re­ally look­ing for is com­pa­nies where we can add value,’ said Black­lock. ‘Re­mem­ber­ing that, if we’re cat­alytic, we’re in­vest­ing be­cause we know that at some point in time we’re no longer go­ing to be needed.

In­fra­struc­ture op­por­tu­ni­ties

For Black­lock, the pri­or­ity was to in­vest in in­fra­struc­ture, which was the theme for all of Day Two of the Sum­mit.

Af­ter a wel­come from Min­is­ter for Public En­ter­prises and State In­vest­ment Ben Micah, the Asian Devel­op­ment Bank’s Vice Pres­i­dent (Pri­vate Sec­tor and Co­fi­nanc­ing Op­er­a­tions) Lak­shmi Venkat­acha­lam out­lined the bank’s ap­proach to in­fra­struc­ture in­vest­ment, in­clud­ing its suc­cess­ful in­vest­ment in Lae’s port.

For­mer Vic­to­ria Trea­surer Tom Roper ex­plored the chal­lenge in­fra­struc­ture devel­op­ment places on gov­ern­ments, while an ex­pert panel of bankers, con­sul­tants and de­bated best prac­tice in de­vel­op­ing in­fra­struc­ture projects in PNG.

The big news from Day Two was around the PNG Gov­ern­ments’ stated aim of build­ing a new port in Port Moresby and, in the longer term, sell­ing down its own­er­ship in some state-owned en­ti­ties, no­tably Air Ni­ug­ini and PNG Power. Del­e­gates also heard of ma­jor new public in­vest­ment in roads and air­ports.

The 2014 Sum­mit fea­tured a num­ber of case stud­ies of suc­cess­ful in­vest­ments in Pa­pua New Guinea, in­clud­ing waste re­cy­cling busi­ness To­tal Waste Man­age­ment, AES’S Ravuvu Industrial Park out­side Port Moresby and New Bri­tain Palm Oil’s in­vest­ment in re­new­able en­ergy.

Now an es­tab­lished fix­ture in PNG’S busi­ness cal­en­dar, the next Pa­pua New Guinea Ad­van­tage In­vest­ment and In­fra­struc­ture Sum­mit will take place at the Bris­bane Con­ven­tion and Ex­hi­bi­tion Cen­tre, Bris­bane, Australia, on 27 and 28 Au­gust 2015.

Ex­perts dis­cuss the best way of struc­tur­ing in­fra­struc­ture projects in PNG.

PNG’S Prime Min­is­ter Peter O’neill in con­ver­sa­tion with the Asian Devel­op­ment Bank’s Lak­shmi Venkat­acha­lam.

Del­e­gates came from Europe, Asia and the Pa­cific.

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