China Eximbank lends $18.22 million for industrial development projects in PNG

In 1996, China Eximbank and the Government of Papua New Guinea (PNG) signed a preferential loan framework agreement to support industrial development projects in PNG. Then, in 2002, China’s Economic and Commercial Counsellor in PNG, Fang Zhimin, disclosed that China Eximbank had issued loans worth $18.22 million to support two forestry projects — the Veneer Factory Project managed by Heybridge Pty. Ltd. and a Logging Project managed by Fusen Industries [PNG] Pty. Ltd. — under the framework agreement. The purpose of the 29.8 million Kina (US$ 8,567,500) Veneer Factory Project was to build a factory — located in the village of Yawasoro outside of Wewak Town in East Sepik Province — with the capacity to produce 30,000 cubic meters of dried veneer each year. The project was expected create job opportunities for about 300 Papua New Guineans. A groundbreaking ceremony for the project took place on September 25, 2001. The ceremony was attended by Chinese Ambassador to Papua New Guinea Zhao Zhenyu and East Sepik Governor Arthur Somare. Governor Somare said the veneer project was part of a package that includes a sawmill project and a coconut-activated carbon factory (to be used to purify water) and logging operations to bring in the timber. He said these would create 700 new jobs in the province.

Additional details

A third project (the Refined Salt Factory Construction Project) was financed by China Eximbank under the same 1996 preferential loan framework agreement. This project is captured in Project ID#64168. The face value of the China Eximbank loan that supported Veneer Factory Project is unknown. Therefore, this record is not coded as an umbrella project for the time being (to ensure that the 18.22 million of debt contracted by the Government of Papua New Guinea is captured in financial aggregates). However, this decision should be revisited if/when the face values of the loans for the Veneer Factory Project and the Logging Project are identified. The Government of Papua New Guinea may have on-lent the loan proceeds to Heybridge Pty. Ltd. and Fusen Industries [PNG] Pty. Ltd. This issue requires further investigation.

Number of official sources

2

Number of total sources

6