PNG out of gas cash
Post-Courier (PNG), Copyright 2000
December 5, 2000
FINANCIAL constraints may force the PNG government to settle for less than 30 per cent equity in the rich PNG Gas project, Prime Minister Sir Mekere Morauta conceded yesterday.
The government needs to urgently raise $US540 million to pay for the equity.
Sir Mekere told journalists in Sydney yesterday that the government had already raised $US100 million from the European Investment Bank. However, it still needed another $US350 million to fully finance the 30 per cent equity.
Sir Mekere said he had already written to Australian Prime Minister John Howard seeking financial assistance.
He said he did not specify how much the PNG government wanted from Australia.
“I have written to Prime Minister Howard outlining the project profile, where we stand, its importance to Papua New Guinea and asked him and his government to consider expanding some financial support,” Sir Mekere said.
“So far, we’ve raised $US100 million from the European Investment Bank and there’s about another $US350 million to go to acquire a 30 per cent equity.”Sir Mekere was asked if the government would take less than 30 per cent equity.
He said: “We may have no choice. I am also mindful that project sponsors may want certain minimum percentage of government involvement as a way of establishing certainty.’’
Officials at the very highest level in both countries would be discussing the subject in the next 10 days, Sir Mekere said.
“I was careful not to specify any amount, except to say that $US350 million was the outstanding balance to raise and any support given would be welcomed.’’Sir Mekere said there was an opening with the Asian Development Bank which they might consider, though it was quite expensive.
He reiterated the importance of the project to the journalists.
Later, when delivering the keynote address, Sir Mekere also commented on the tax measures that were aimed at boosting the gas project.