“As previously foreshadowed, this involves a total of $US400 million of good, cheap, friendly financing assistance,” he stated.
“In Kina terms, the financing agreement I signed yesterday (Nov 22) provides around K1,380 million of financing, with interest costs of effectively zero because of the G20 debt relief which I had helped initiate. After the debt relief period, the financing moves to interest costs linked to 10 year Australian Government Bond yield which is currently well under 1 percent per annum.
“The first part of the assistance was an additional AUD140 million or some K350 million to support the 2020 Budget. The focus of the Marape Government is to use this funding to pay off PNG’s massive multi-billion debt to our businesses.
“Under the IMF Staff Monitored Program, we had agreed to set up an Arrears Verification Committee to check and verify outstanding contract payments. With these payments, we are injecting cash back into our local businesses that had been cash-strapped.
“The business community says paying arrears is one of the most effective ways to support the economy during the COVID-19 pandemic. We have been listening to business, and we are delivering.
“The second part of the assistance is to rollover the $US300 million 2019 financing provided through a short-term loan from Export Finance Australia. This moves the one-year finance to a fifteen year finance.
“This financing will become effective this Wednesday. Of course, this assistance is not the Australian government choosing sides in these difficult times. This is not the role of any of our friends, and this is why we understand the delay of the visit of Australia’s Prime Minister. But as Treasurer, I do note that PNG linked the Australian assistance to the Marape Government’s economic reform policies backed by the IMF Staff Monitored Program.”
(Treasurer Ling-Stuckey signing 2020 financing agreement with the Australian High Commissioner, Jon Philp, on Sunday, November 22)