World Bank Commits $1.2bn to PNG Jobs and Reform Plan

The World Bank Group has approved a new six-year partnership with Papua New Guinea (PNG), unlocking an estimated US$1.2 billion in financing aimed at accelerating job creation, strengthening governance, and expanding access to essential services through 2031.

Approved by the World Bank Group's Board of Executive Directors on 17 February 2026, the new Country Partnership Framework (CPF) sets the strategic direction for support aligned with PNG's national development priorities.

The programme places employment, economic diversification, and institutional reform at the centre of efforts to translate Papua New Guinea's vast natural resource wealth into broader prosperity.

Putting Jobs at the Centre of Reform

Papua New Guinea is one of the most resource-rich countries in the Pacific, with significant reserves of gas, minerals, timber, and fisheries. However, much of its population—nearly 80 per cent—lives in rural and remote communities with limited access to roads, electricity, healthcare, and education.

The new CPF aims to shift growth beyond the extractive sector and build a more diversified and inclusive economy.

The framework focuses on four core priorities:

• Building skills and human capital• Connecting communities to essential infrastructure• Strengthening economic governance• Supporting private sector growth and diversification

Agriculture is identified as a high-potential sector, capable of generating widespread employment if productivity improves and farmers gain better access to domestic and international markets.

Tackling Human Capital Gaps

A major focus of the partnership is investment in people. PNG's Human Capital Index currently stands at 0.42, meaning a child born today is expected to achieve just 42 per cent of their potential productivity by adulthood compared to a benchmark of full education and health.

To address this gap, the World Bank Group will support expanded investment in:

• Education and skills development• Health systems and maternal care• Nutrition programmes• Youth employment initiatives

Strengthening human capital is viewed as essential to enabling long-term productivity and reducing poverty.

Infrastructure to Connect Remote Communities

Limited connectivity remains one of the biggest barriers to economic inclusion in PNG. Mountainous terrain and dispersed island communities make infrastructure development costly and complex.

The CPF prioritises expanding access to:

• Electricity and energy systems• Road networks and transport corridors• Basic services infrastructure

Improved connectivity is expected to enable rural communities to participate more fully in markets, access public services, and attract private investment.

Governance and Resource Transparency

A central pillar of the partnership is improving transparency and accountability in managing resource revenues.

Despite significant natural resource earnings, weak institutional capacity and governance challenges have limited the impact of public spending on living standards.

The CPF will support reforms to strengthen economic governance, improve public financial management, and ensure resource revenues are directed toward infrastructure, services, and development priorities.

"Papua New Guinea has immense natural wealth and extraordinary human potential," said Han Fraeters, World Bank Director for Papua New Guinea, Solomon Islands, and Vanuatu.

"Turning that potential into tangible development outcomes and opportunities for all Papua New Guineans is the challenge ahead. We look forward to supporting practical reforms and investments that create jobs, strengthen institutions, and contribute to a more resilient and secure Papua New Guinea."

Mobilising Private Capital

Beyond public financing, the World Bank Group will work to mobilise additional private sector investment, helping de-risk projects and crowd in capital in sectors such as agriculture, energy, telecommunications, and small business development.

Economic diversification is viewed as critical to reducing vulnerability to commodity price fluctuations and strengthening long-term resilience.

A Six-Year Blueprint for Stability and Growth

With an estimated US$1.2 billion envelope through 2031, the new Country Partnership Framework represents one of the most significant coordinated development efforts in Papua New Guinea in recent years.

By combining infrastructure expansion, human capital investment, governance reform, and private sector growth, the partnership aims to lay the groundwork for sustained economic opportunity and improved living standards across the country.