Papua New Guinea

Papua New Guinea is one of the 18 Pacific island states and territories covered by the Kiwa Initiative, which supports projects focused on nature-based solutions to strengthen adaptation to the effects of climate change. Several projects are being implemented in the country: 

• The regional project “Nature-based solutions in Melanesian watersheds to generate co-benefits for climate resilience, biodiversity, health and well-being (Wish+)” is led by the Wildlife Conservation Society (WCS). Wish+ promotes safe management of drinking water, sanitation, and wastewater in the central forest of Manus Island. 
• The local project led by KGWan Eco Habitat Inc. works to improve livelihoods through the conservation of biodiversity and sustainable climate systems in the mountainous region of Simbu. The purpose of this project is to help the rural communities of the Inaugl tribe participate in the management of natural resources to fight against deforestation and land degradation.

Papua New Guinea is home to the world’s third-largest primary forest. Its protection and the promotion of greener social and economic development are a priority for the Papuan government.

AFD supports actions to protect forests and marine biodiversity through its SoNG (Solwara Na Graun blo pipol) project, whose objectives are to:

1. Make 30% of the country’s land, inland waters, and seas protected areas by 2030, by supporting community and civil society initiatives to develop sustainable agricultural and fisheries sectors. This project will be implemented by the NGO Wildlife Conservation Society and Expertise France. 
2. Help mainstream conservation into the implementation of public policies and ensure their coherence with local actions.
3. Promote training and research to promote and disseminate traditional knowledge and cultural practices.
4. Strengthen the PNG Biodiversity and Climate Fund for conservation and the fight against climate change.

In addition, the European Union has entrusted Expertise France with the implementation of the €33.5-million program “Forest, Climate Change and Biodiversity Protection (EU-FCCB)”.

These two projects are examples of the dynamism of Team Europe in supporting the country’s efforts in this area.

In July 2023, AFD signed a letter of intent with the Global Green Growth Institute (GGGI) and the Bank of Papua New Guinea. The objective is to support the establishment of a center for green finance in Papua New Guinea by offering tools to national financial players, to encourage them to engage in an ecological and energy transition. 

A grant agreement amounting to €6 million was signed with GGGI in March 2024. It has a regional component and a component dedicated to Papua New Guinea.

AFD works actively with GGGI and commercial banks to set up solutions (e.g., a financing facility to reduce interest rates on loans and a guarantee fund to cover these loans) that encourage the private sector to invest in "green" projects linked to renewable energies, reduction of carbon emissions, and  sustainable management of natural resources.

The purpose of this approach is to support island states in dealing with the huge costs of natural disasters to their economies (5% of regional GDP per year, or $1 billion), encourage regional financial systems to finance sustainable development, and mobilize the private sector in climate change financing.

In 2022, about 20% of Papua New Guinea’s population had access to electricity. The country remains largely dependent on fossil fuels (70% of the energy mix).

In July 2023, AFD signed its first financing agreement to support the country’s energy transition. This technical cooperation involves AFD, the New Caledonian public energy company Enercal and the Papua New Guinea company PNG Power Limited. By mobilizing New Caledonia’s expertise, it will help include renewable energies into the national electricity grid. 

In June 2024, PNG Power Limited (PPL) expressed the wish that Enercal’s service focus on energy hybridization on Manus Island. This project would substantially reduce power cuts – which would be a boon for the local population – and decrease operational costs for PPL by saving about 400,000 liters of diesel per year. 

The port of Rabaul is the 5th largest port in Papua New Guinea and the only international port in the province of East New Britain. Accumulation of volcanic ash has severely deteriorated the port’s infrastructure, making it vulnerable to the impacts of climate change. Modernization of its infrastructure and improvement of environmental management are crucial for ensuring the sustainability of port operations and for protecting local natural resources and biodiversity.

The cost of the project to rehabilitate the port of Rabaul infrastructure exceeds €80 million. The project will involve the financing of two docks and their extension, a hangar, and a plant for fish processing, especially for export. It will also include implementation of AFD’s “Green Port” mechanism for adaptation to and prevention of climate change impact, which covers waste and wastewater management, greenhouse gas emissions, and the resilience of the infrastructure itself. 

The project is financed by AFD and the EIB through two loans of €24 million each, plus a European Union grant of €16.6 million, delegated to AFD.