By Meriba Tulo – EMTV News, Port Moresby
Five Hundred Million US Dollars is expected to be injected into Papua New Guiana’s economy over the next few days, as a result of a successful issuing of Sovereign Bonds on the International Market.
Treasurer Charles Abel announced this late Friday afternoon.
This is the first time PNG has successfully issued sovereign bonds on the international market and also opens up the possibility of the country’s State-Owned-Entities to also source international funding for their programs.
In a first for Papua New Guinea, the country has successfully issued Sovereign bonds on the World’s financial markets – which will see much-needed revenue injected into the country’s economy.
According to Treasurer Charles Abel, the Government had aimed to raise US$500 million – which it did successfully.
He said that whilst interest had reached a potential US$3 billion, the government had decided to exercise prudent management, and settle for the initial target of US$500 million.
In the end, 129 Investors had been accepted to subscribe to the Bond, which will mature over a ten year period at an interest rate of 8.375%.
Abel says initial funds from the bond issuance will go towards funding the 2018 National Budget, as well as settling the country’s short-term debt, domestic loans, as well as helping to clear the Foreign Exchange backlog.
The issuing of this Sovereign Bond also makes it easier for PNG’s State-Owned-Entities to go directly to foreign Investors to seek funding for their own projects, without having to seek a Guarantee from the Government.
With the ten year period for this Bond the Government is confident it can ride on the impending the revenue that is expected to be received from major resource projects over the next few years – among them;
- The Wafi-Golpu Project,
- Papua LNG,
- And the expansion of the PNG LNG project.