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Port Moresby, Papua New Guinea, August 5, 2014
—IFC, a member of the World Bank Group, is investing US$30 million and has mobilized an additional US$50 million through a syndication to allow Papua New Guinea’s only domestic bank, Bank South Pacific, to expand its financing and promote private sector growth.
As part of this syndicate group, Netherlands Development Finance Company (FMO) and German development finance institution Deutsche Investitions und Entwicklungsgesellschaft mbH (DEG) will be investing significantly into BSP, the largest commercial bank with more than 50 percent market share of loans and deposits in Papua New Guinea. This is FMO’s first direct investment in the country, while DEG is renewing its support to Papua New Guinea.
“BSP has worked hard over the past decade to become a sophisticated banking institution offering integrated solutions to our corporate clients, but our ability to compete effectively in the foreign exchange lending market has been constrained by limited access to longer-term foreign currency funding,” said Mark Railston, General Manager of Treasury at BSP. “With this new facility, BSP will be better able to service Papua New Guinea’s growing private sector including small and medium enterprises linked to the natural resources sectors that need access to U.S. dollars.”
Papua New Guinea is one of the fastest-growing economies in the Pacific. Over the past decade, Papua New Guinea’s resource boom and improved economic climate have benefited many local enterprises and resulted in strong annual economic growth of up to 9 percent. In May, the country began exporting liquefied natural gas, which is expected to further boost its economic growth in the coming years.
Across the Pacific, BSP has the largest network of branches, rural outlets and ATMs servicing more than a million customers. IFC has supported BSP since 2010, assisting the bank’s expansion into small-to-medium and rural-banking segments in Papua New Guinea and across the Pacific.
“BSP is critical to national economic growth,” said IFC’s Regional Manager for the Pacific Gavin Murray. “For Papua New Guinea to meet its development potential, the country needs strong domestic financial institutions that can provide the financial products needed for the private sector to grow, provide employment and ultimately boost prosperity.”
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development. For more information, visit
www.ifc.org
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About Bank South Pacific
BSP is the leading bank in Papua New Guinea and the South Pacific region. BSP offers a ‘whole of bank’ solution for government, corporate, institutions, small business, and retail customers. It operates 42 full service branches, 13 service centers, 42 sub branches, 230 agencies, 300 ATMs and over 13,000 EFTPoS terminals in PNG alone and is the only financial institution with the ability to facilitate rural account opening and landowner royalty payments in remote parts of the country. BSP is focused on boosting financial inclusion and has invested in electronic banking and state-of-the-art, global-award winning mobile and Internet banking services so that people can access banking services from anywhere, at any time. When it comes to giving back to local communities, BSP is one of the leading Pacific firms, supporting a number of health, education, sports and environmental initiatives.
About DEG
DEG, a subsidiary of KfW, finances investments of private companies in developing and transition countries. As one of Europe’s largest development finance institutions, it promotes private business structures to contribute to sustainable economic growth and improved living conditions.
About FMO
FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With an investment portfolio of €6.3 billion, FMO is one of the largest European bilateral private sector development banks.
www.fmo.nl
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