China Eximbank provides RMB 771.7 million government concessional loan for Phase 2 of Lae Tidal Basin Industrial Development Project

Project narrative

On July 7, 2016, the Chinese Government and the Government of Papua New Guinea signed a preferential loan framework agreement for Phase 2 of Lae Tidal Basin Industrial Development Project. Then, in March 2017, the China Eximbank and the Ministry of Treasury of the Government of Papua New Guinea signed an RMB 771,750,000 government concessional loan (GCL) agreement for Phase 2 of the Lae Tidal Basin Industrial Development Project. The GCL carried the following borrowing terms: a 20 year maturity and a 5 year grace period. It was scheduled for biannual repayments between March 2022 to March 2037. PNG’s Ministry of Treasury on-lent the proceeds of the GCL to Papua New Guinea Ports Ltd. (a state-owned enterprise). The purpose of the project was to construct a second berth — at least 240 meters in length — at the Port of Lae’s international container wharf and provide additional facilities for cargo storage behind the wharf. The Port of Lae is the largest and busiest port in PNG. China Harbour Engineering Co., Ltd. (CHEC) was the contractor responsible for implementation. This project was expected to reach completion in late 2019. However, in October 2020, PNG’s Minister for State Enterprises reported that Phase 2 was suspended due to technical concerns and questions about the quality of the work. As a result, the third phase of the project was brought forward. The Papua New Guinean government committed to “continue its role in developing the basin into an infrastructure hub”; the government continued to identify the Chinese loan was the funding stream for this project as of April 2025. In September 2022 it was reported that SMEC (Australia) had taken the lead on Phase 2.