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PNG Government looking at sovereign bonds issue

An issue of a national sovereign bond in the range of US$500 million (K1.6 billion) to US$1 billion (K3.26 billion) is expected to be announced next month, says Treasury Secretary Dairi Vele.

He said the government was working on it.

“When we were looking at this two years ago, the oil price was down at USD$40 (K130),” Vele said. “Now look at this good story with the recovering price around K228 (US$70).

“It is a competitive market.

“There are other people out there trying to seek financing for their country, but PNG has a good story to tell, especially with the reforms we have taken and the major resource projects coming up.

“We should have some good news by September. Our credit rating will factor. In the past, it has heavily been based on oil price, so again it should be a promising time for us.”

Deputy Prime Minister and Treasurer Charles Abel said they were in the most advanced stages of conducting the country’s first sovereign bond later this year.

“We are raising these external funds so that we can shift our borrowings from the high cost and saturated domestic market,” he said.

“This will not only help our budget but will mean that we can start releasing more funds to line ministries to improve front line service delivery,” he said.

Meanwhile,  APEC Minister Justin Tkatchenko says the K300 million (US$92 million) allocated for APEC this year brings up the total allocated in the past three years to K600 million (US$184 million).

The amount is for Asia-Pacific Economic Cooperation meetings leading up to the leaders’ and chief executive officers’ summit in November.

“A total K600 million has been allocated and about K400 million (US$122 million) has been spent so far – which is in line with all budget approvals from Parliament.”

Tkatchenko said the 2018 Asia-Pacific Economic Cooperation meeting would be held “the Papua New Guinea way”.

“We will live within our means and ensure that what we spend is justified for the benefit of our economy,” he said. “We will also ensure that this event is done properly and correctly as per the requirements of Apec – but in a Pacific way where all our world leaders can enjoy their time in Papua New Guinea.”

Tkatchenko said all leaders expected to attend the summit in November are confirmed to attend.

Chinese President Xi Jinping will arrive on November 15 for his State visit – two days before the summit.
Tkatchenko said most of the world leaders who would be attending had never been to PNG before and it was important “that we make their stay enjoyable”.

 PacNews/PNG Today
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