Papua New Guinea's PPP Framework: An Introductory Guide

By Angela Ipara

Papua New Guinea (PNG) faces a significant infrastructure gap, particularly across the energy, transport, and urban services sectors.[1] Fiscal constraints limit the government’s ability to fund large scale developments through public expenditure alone. As a result, PNG has over the past decade developed Public Private Partnerships (PPPs) as a key mechanism for infrastructure delivery.

In our  2017 article, "A Primer on PNG's PPP Act", we discussed the initial framework established under the Public Private Partnership Act 2014 (the Principal Act).[2] At that time, we noted that while the Principal Act had been certified, practical implementation remained limited due to the absence of key gazettal notices and operational oversight bodies.

Nearly a decade later, the regulatory landscape has evolved significantly. Legislative amendments introduced in 2022 and 2023 (together the Act) have addressed these early implementation gaps by strengthening institutional coordination, clarifying procurement processes and formalising oversight mechanisms. As a result, PNG’s PPP regime has transitioned from a largely theoretical framework into a more structured and bankable system. [3]

What is a PPP?

A PPP is a long term, performance based contractual arrangement between a government body and a private sector participant.[4] Unlike traditional procurement, where a contractor delivers an asset and exits, PPPs involve shared risk and responsibility across the entire lifecycle of the asset.

Through this model, the PNG Government aims to:

• mobilise private capital by unlocking funding independent of the constrained national budget;

• leverage expertise by harnessing the technical, managerial, and operational innovation of the private sector, and

• improve lifecycle delivery by ensuring infrastructure assets from roads and ports to water systems are built efficiently and properly maintained for decades. [5]

Who can enter into a PPP in PNG?

A PPP arrangement involves two primary participants under the Act:

1. The public sector ("Relevant Public Bodies")

The Act permits only authorised public entities to enter into PPP arrangements. These entities, defined as “Relevant Public Bodies,” include:

• national government departments;

• subnational governments (provincial and local level); and

• state owned enterprises.

A key feature of the amended framework is its flexibility. The responsible Minister, on the recommendation of the PPP Steering Group, may designate additional entities as Relevant Public Bodies by notice in the National Gazette, allowing the framework to adapt to evolving government structures and priorities.[6]

2. The Private Sector ("The Partner")

The private sector participant may be a corporation, institutional investor or consortium. The 2022 amendments clarify and broaden the definition of “partner”, expressly allowing participation through approved private nominees or joint venture structures, thereby supporting more complex and commercially viable investment arrangements.[7]

How are PPP projects managed and overseen?

The Act provides a structured legal framework for PPP project delivery, ensuring projects progress through a defined lifecycle rather than on an ad hoc basis.

Phase 1: Project identification and analysis	The framework sets clear rules on how PPP projects are identified and assessed. Only approved Relevant Public Bodies can initiate projects, and they cannot simply enter into agreements on their own.[8] Projects must undergo an initial assessment to determine their scope, cost and suitability for PPP delivery. This ensures that projects offer value for money compared to traditional procurement methods.[9]
Phase 2: Registration and approval processes	Projects must be registered with the PPP Centre, which acts as the central oversight body. At this stage, projects are assessed for technical feasibility, economic viability and financial risk exposure.[10]
Phase 3 : Procurement	The Act establishes specific procurement rules for PPP projects, separate from general government procurement laws:[11] for projects initiated by government (solicited proposals), there must be a competitive and transparent tender process and for projects proposed by the private sector (unsolicited proposals), the amended framework ensures they are still subject to proper review and safeguards.[12]
Phase 4: Implementation and reporting	Following contract execution, the PPP Centre continues to oversee project delivery, including construction and long-term operations.

Who oversees PPP projects?

The amended regime introduces a more centralised and coordinated governance structure, supported by two key institutions:[13]

• (The PPP Centre) The PPP Centre has been significantly strengthened and is now a separate legal entity with perpetual succession and a corporate seal. It operates as the central operational body and is responsible for:

  o    assessing project proposals;

  o    advising on project suitability;

  o    coordinating procurement processes;

  o    maintaining PPP records; and

  o    issuing guidance and compliance support.[14]

• (The PPP Steering Group) The PPP Steering Group functions as the primary oversight and policy coordination body. Its key roles include:

  o    reviewing PPP project proposals;

  o    making recommendations to the National Executive Council;

  o    ensuring alignment with national development priorities; and

  o    supporting transparency, consistency and accountability across sectors.[15]

Implications for investors and the road ahead

These reforms signal a shift toward a more coordinated and predictable PPP framework, broadly aligned with international best practices promoted by institutions such as the World Bank and the Asian Development Bank.

For investors, this provides greater clarity around institutional roles, approval processes and the legal status of the PPP Centre, reducing uncertainty and improving project bankability. At the same time, the framework introduces more rigorous screening and approval requirements, meaning that projects are likely to face increased scrutiny before progressing.

Overall, PNG’s strengthened institutional framework supports a more stable and transparent PPP environment. However, the long-term success of the model will depend on the capacity, consistency and effectiveness of key institutions in implementing the framework in practice.

If you would like to better understand how PNG’s PPP framework may apply to your project or investment strategy, please contact our team. We would be pleased to assist with navigating the regulatory landscape and identifying opportunities in this evolving market.

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[1] David Lawrence, 'Infrastructure Maintenance in Papua New Guinea' (Lowy Institute for International Policy Analysis Report, 2017) 3–5

[2] Pacific Legal Network, 'A Primer on PNG's PPP Act' (Legal Commentary, 24 February 2017).

[3] Public Private Partnership (Amendment) Act 2022 (PNG); Public Private Partnership (Amendment) Act 2023 (PNG).

[4] Public Private Partnership Act 2014 (PNG) sch 3.

[5] Department of Treasury (Papua New Guinea), 2023 National Budget: Volume 1 — Economic and Development Policies (Report, November 2022) 119.

[6] Public Private Partnership (Amendment) Act 2022 (PNG), s 1(a);

[7] Public Private Partnership (Amendment) Act 2022 (PNG) s 1(a) (amending s 2 of the Public Private Partnership Act 2014 (PNG), definition of “partner”).

[8] Public Private Partnership Act 2014 (PNG) s 4; sch 1

[9] Ibid s 11(1).

[10] Ibid s 12.

[11] Public Private Partnership (Amendment) Act 2022 (PNG) s 2 (replacing s 11).

[12] Public Private Partnership (Amendment) Act 2023 (PNG) s 2.

[13] Public Private Partnership Act 2014 (PNG) ss 28–29.

[14] Ibid s 26.

[15] Ibid part V.