Affordable, green housing deal signed

National Capital District Governor, Powes Parkop, has signed a landmark deal with the International Finance Corporation to provide affordable, green and climate-resilient housing in the country’s capital, Port Moresby.

The deal, a first of its kind for PNG, is aimed at demonstrating a model for large scale affordable housing for low- and middle income families in Port Moresby, to help ease the growth of the city’s informal settlements.  It was announced by Governor Parkop during the Pacific Urban Forum, now underway in Fiji, which is focusing on the challenges of urbanisation in Papua New Guinea and other Pacific Island nations.

“High prices and a severe lack of affordable housing are now preventing many Port Moresby residents from moving out of informal settlements and buying their own homes,” Governor Parkop said. “Through this pilot project, IFC will help us open up the market for green, climate-resilient affordable housing by drawing on the resources and expertise of the private sector.

“The project will target both lower- and middle income earners through a mix of single unit family dwellings and affordable flats,” Governor Parkop said.

“We need to encourage greater housing density in a way that is culturally appropriate, and with adequate amenities for people. The pilot project will complement other measures that we are now undertaking to tackle Port Moresby’s housing crisis.”

According to government statistics, over 45 percent of the 370,000 residents of Port Moresby live in informal settlements without security of title or access to basic infrastructure, such as water, sanitation and power.

With more people moving from rural areas to the city, informal settlements are growing fast and are expected to shelter almost 60 percent of the population by 2030. To keep pace, it is estimated about 3,000 affordable housing units need to be built every year over the next ten years, a number far greater than the current level of production.

PNG’s new Minister for Housing, Justin Tkatchenko, suggested that it was time for the government to look for new approaches in the housing sector.

“Past governments have tried a lot of different strategies to increase the amount of affordable housing on the market, but the need just continues to grow. 

“We need to learn from our mistakes in the past and observe what has worked in other countries. By working together with IFC, which has experience globally in the housing sector, we intend to create a model that works for PNG.”

IFC Country Manager for PNG and the Pacific, Australia and New Zealand, Thomas Jacobs, said: “Papua New Guinea has one of the fastest growing populations in the world, so it’s important to look for solutions to overcrowding in informal settlements.

“People are also highly exposed to the risks of destructive climatic events, which are increasingly prevalent in Papua New Guinea and elsewhere in the Pacific. By working with the private sector, we can help develop a model that’s affordable and climate resilient and also uses EDGE, a green building certification system, created by IFC, that helps reduce energy and water usage, as well as building costs.”

As an adviser, IFC will work to design the right model, drawing in the private sector to provide the financial and technical expertise to deliver a cost effective large-scale affordable housing development that’s also environmentally friendly and resilient to climate change. As part of its support, IFC will undertake demand assessments, and evaluate the technical and commercial aspects of the proposed project and then assist in structuring and tendering the project to select a private developer.

It marks the second planned project for green, climate resilient affordable housing in the Pacific region. The Fijian government has already given the go-ahead to a similar project for its country.

IFC will draw on its global work in helping tackle housing affordability issues. For example, an IFC supported project in Odisha, India, is expected to build 2,600 affordable homes for about 12,000 people. Further support in the state of Bihar will result in a statewide network of green affordable housing projects across multiple cities that could create about 7,000 housing units and mobilise about US$ 120 million in private sector investment.

(From left: NCD Governor Powes Parkop with the International Finance Corporation’s Investment Officer Ritesh Vij)

Press release