TOKYO -- Japan, the US and Australia have picked a liquefied natural gas project in Papua New Guinea as their first case for joint financing in the Indo-Pacific region, planning to lend over K3.4 billion, Nikkei has learned.
Three government-backed lenders -- Japan Bank for International Cooperation, the US Overseas Private Investment Corp and Australia's Export Finance and Insurance Corp -- issued a statement yesterday regarding their joint infrastructure efforts.
The three countries agreed in November to join hands in financing infrastructure projects in the Indo-Pacific to offer an alternative to China's Belt and Road initiative. The LNG project in Papua New Guinea marks the first project in this three-way cooperation.
A team from Japan, the US and Australia discussed the project with the government in Port Moresby in April. Plans will be finalised over the next two to three years. Additional assistance for power plants and communications infrastructure could follow.
Papua New Guinea has picked China's Huawei Technologies to build its internet infrastructure. But Australia, which is helping to develop a naval base on the island nation, worries that military intelligence could be leaked to Beijing through the network.
US vice president Mike Pence said in November that Washington will help its Australian ally with the naval base.
Elsewhere in the Pacific, Beijing is assisting Vanuatu with building a port, while China and Australia are competing over defence cooperation with Fiji.
Japan, the US and Australia also see other Pacific nations such as the Solomon Islands and Palau as candidates for joint infrastructure financing. They plan to send a delegation to members of the Association of Southeast Asian Nations to examine potential projects.
The three countries will abide by the Group of 20 principles for quality infrastructure investment, drafted at a meeting of finance ministers and central bankers in early June. The principles are expected to be formally adopted at the G-20 summit in Osaka.
Washington will establish a new agency, the US International Development Finance Corp, as early as October. The new lender will have a $60 billion portfolio cap.
Canberra is launching the Australian Infrastructure Financing Facility for the Pacific in July with 2 billion Australian dollars (K4.7 billion) in funding.
Combined with Japan's JBIC, which lends out 1.7 trillion yen (K53 billion) yearly, the countries will be able to tackle even larger projects in the future.