WORLD BANK TAKES TEN PERCENT STAKE IN PNG BANK

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$140 million investment organization’s biggest in Pacific

MELBOURNE, Australia (Radio Australia, June 28, 2010) – The International Finance Corporation has signed a deal to take a 10 percent stake in Papua New Guinea’s Bank South Pacific.

The deal involves an investment of US$140 million, including a US$30 million loan, [making it] the biggest investment ever made by the World Bank group agency, in the Pacific region.

[PIR editor’s note: The International Finance Corporation is an arm of the World Bank aimed at promoting sustainable private sector development.]

Papua New Guinea's State Enterprises Minister, Arthur Somare, says the new alliance offers an excellent opportunity for PNG's national bank to greatly improve its level of services.

It comes as Bank South Pacific struggles with a falling share price and criticism from the PNG investment community.

International Finance Corporation's Principal Investment Officer for the Pacific, Adel Meer, said the institution’s role is facilitating the growth of well established regional financial institutions and helping them strengthen their capital base and offer a wider variety of financial services.

"When we met with the management and the board of BSP we realized they had fairly aggressively and well thought out expansion plans across the Pacific and we thought it would be a good partnership to enter into to facilitate that growth," Meer said.

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