Bank of PNG Denies Knowledge of PNG LNG Funding Details

Governor of Bank of Papua New Guinea (BPNG) Loi Bakani has told a commission of inquiry that he and the Bank had no knowledge or involvement of the States initial PNG LNG equity financing arrangement.

Bakani said he wasn’t aware of the arrangement made by the state to finance the purchase of shares in Oil Search with the Independent Petroleum Investment Company (IPIC) or Union Bank of Switzerland (UBS).

He said based on a National Executive Council (NEC) Decision 479 of 2013 and the terms of reference, BPNG was required to and did independently evaluate, advise and made recommendation to then- state enterprises Minister Ben Micah on various funding proposals received from initially Citi Bank and the UBS.

“The state had received four proposals on the matter that were deliberated on by the IPIC refinancing committee,” said Bakani.

He said NEC determined the term of reference for central Bank to make commentary and recommendation on the proposals.

Bakani said Central Bank had clear skills in providing advice to the state so it was required to give an independent view based on the terms of reference provided to confirm the best financing proposal for the state.

NEC however stated in its decision that no consultation with IPBC, National Petroleum Company or the Department of Public Enterprises and Treasury should be sought in the process.

Former Chief Secretary to the O’Neill government, Isaac Lupari told the commission of inquiry that he didn’t play any role in securing the loan.

He said he was aware of the discussions surrounding the transaction but was never directly involved with the details of the discussions.

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