The Asian Development Bank (ADB) and Air Niugini have signed a US$35.8 million financing package to support the modernisation of Papua New Guinea’s national airline fleet. The investment is aimed at improving operational efficiency, further enhancing safety standards, and strengthening the country’s domestic and international air connectivity, with wider benefits for Papua New Guinea’s social and economic development.
The financing package comprises a US$19 million loan from ADB’s ordinary capital resources, alongside a US$16.8 million loan administered by ADB from Leading Asia’s Private Sector Infrastructure Fund 2 (LEAP 2). The funds will be used to finance the purchase of six Airbus A220-100 aircraft, enabling Air Niugini to replace older aircraft with more reliable and significantly more fuel-efficient models.
Air transport is essential to Papua New Guinea’s economy and social cohesion, as the country’s rugged terrain and limited road infrastructure restrict land-based travel. Air Niugini plays a critical role in connecting remote communities with major population centres, as well as linking the country to regional and international markets. The new Airbus A220-100 aircraft are expected to deliver fuel efficiency improvements of around 20% compared with older aircraft, helping to lower operating costs while reducing carbon emissions.
LEAP 2 is an ADB-managed fund supported by a US$1.5 billion commitment from the Japan International Cooperation Agency. The fund focuses on sustainable private sector infrastructure projects that reduce emissions, improve energy efficiency, and expand access to essential services across ADB’s developing member countries.
