Papua New Guinea's Prime Minister has distanced his government from reports that he wants China to re-finance his government's $US7.7 billion debt.
James Marape the member for Tari Pori is the new prime minister of Papua New Guinea. May 2019 Photo: Post Courier Newspaper
James Marape said some misleading news has been circulating on the issue.
This follows a purported statement from Mr Marape earlier this week after his meeting with China's Ambassador, Xue Bing, in Port Moresby.
The news sparked concern in Australia with observers warning over the risks of PNG taking on a debt-trap burden.
But Mr Marape said his government is in talks with many of its bilateral partners to access very low-cost concession finance.
This includes the World Bank, the Asian Development Bank and other possible non-traditional partners.
"Whilst it is our new Government's intention to refinance bad and expensive loans secured by the previous government, we will not be reckless to add burden to our country," Mr Marape said in a statement.
According to the prime minister, PNG's government has not approved a pathway to re-financing its debt yet.
He said someone went ahead to the media on the reported request for China based financing facilities without his consent.
"Our relationship in the world is just not about China or neither the West including Australia."
He said that in the meantime, he had asked the Treasurer Sam Basil to direct his department to undertake a profiling on all current loans to ascertain their performance to the economy.
"As well... I have put stop to more borrowings and loans until we are satisfied that the project cost benefit analysis establishes return on the loans that we might secure."
"My Government will be responsible; we will not go down the easy path of resorting to loans but working strategically to invest in growing the economy through policy and legislations that embraces incentives and structural reforms as ways of anchoring our country for positive rebound.
"So, it is misreporting and false that I am going one way to China with request for K27 billion loan, we rather discuss trade with them then continual or further loan.
Mr Marape said there would be "no more unnecessary loans".
"For instance, I have put stop to a loan volume of about K1billion on few non-significant projects of last Government, including a Port Moresby
based water supply project to be sourced from China Exim."