PAPUA NEW GUINEA IS CLOSE to securing over $3 billion in a loan from China to rebuild and rehabilitate road infrastructure throughout the country.
Under a memorandum of understanding, China's Exim Bank will provide a 'soft loan' that will be repaid over a 30 year period.
PNG's prime minister Peter O'Neill announced the Chinese government loan in Port Moresby this week.
Mr O'Neill says his works minister Francis Awesa has struck a deal with Chinese government and Exim bank officials, who agreed to lend over $3 billion dollars.
He says most of the money will be used to fund and rehabilitate the country's deteriorating economic lifeline, the Highlands Highway.
The highway has been deteriorating as heavy traffic moving cargo and supplies for the LNG project has added more pressure to the road network.
Peter O'Neill says rebuilding road infrastructure is part of his government's policy to improve service delivery.
He says under the loan agreement, Chinese companies will be contracted to rebuild the highlands highway and construct new roads.
"With the Exim bank loans that we have been getting in the past, they prefer Chinese contractors,” Mr Oeill said.
“The Chinese loans are always … conditional to the fact that Chinese companies do the roads and the contract work.
“Many of these companies are world class companies, and they have got experience in many of these infrastructure projects all round the world.
“We are going to screen the Chinese companies properly, so that they are not just fly by night operators.”
Mr Awesa also backed Chinese firms to rebuild run down road networks in the country.
"They come good at this time, they have said any amount up to $10 billion we are more than happy to give,” Mr Awesa said.
“That's a vote of confidence, in this government and we need to move fast on this one.”
The final loan agreement is expected to be signed within two weeks time in Port Moresby.