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.
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.
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.
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.