Radio New Zealand - Te Reo Irirangi o Aotearoa

Sovereign Wealth Fund from LNG project set to give large boost to PNG economy

Posted at 02:07 on 30 July, 2010 UTC

The proposed Papua New Guinea Sovereign Wealth Fund to be set up to invest funds from the large Liquefied Natural Gas project is expected to double the country’s Gross Domestic Product to about 18 billion US dollars.

PNG’s deputy secretary of Treasury and the chairman of the Fund’s working group, Anthony Yauieb, says huge dividends would flow into the fund from 2014 when the LNG project is in full operation.

The Post Courier reports that Mr Yauieb made the comments at the National Research Institute, or NRI, during the launching of the NRI’s report called Creation of a Sovereign Wealth Fund.

The PNG Government has been advised to be careful with the Fund as previously it had too rapidly drawn down on trust accounts.

NRI senior research fellow Peter Johnson said the Sovereign Wealth Fund must be structured so its managers can resist political pressure on how to use it.

While the dividends are expected to have a major impact on PNG’s economy, most employment opportunities for locals are expected during the early construction phase of the project.