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US, Pacific allies seek to counter China with Papua New Guinea power grid

Australia, Japan, New Zealand join Pacific infrastructure push

Jason Scott & Isabel Reynolds | Bloomberg 

APEC 2018 Papua New Guinea
APEC 2018 Papua New Guinea. Photo: Reuters

The US and its key Pacific allies on Sunday announced plans to build a $1.7 billion electricity grid in Papua New Guinea, in the latest effort to counter China’s growing influence in the region.

The leaders of Australia, and joined US Vice President Mike Pence in signing the partnership accord, which aims to connect 70 percent of the population to electricity by 2030, up from 13 percent currently.

The project “is proof that America and our businesses are in this region as never before,” Pence said at the signing ceremony in the capital, Port Moresby, with PNG Prime Minister Peter O’Neill, Australia’s Scott Morrison, Japan’s and New Zealand’s Jacinda Ardern. “Be assured, to our allies gathered here and friends all across this region, that the United States is going to continue to work in ways” to create “a brighter future,” he said.

The investment is part of a wider push by the Trump administration to check China’s economic and diplomatic thrust into the Indo-Pacific region and offer an alternative to President Xi Jinping’s Belt-and-Road Initiative. Still, the sums of money offered by the US and its allies are dwarfed by Xi’s lending plan, which Morgan Stanley says may total $1.3 trillion by 2027.

Addressing business leaders at an APEC CEO summit on Saturday, Pence said the US offered countries in the region a “better option” than He warned against taking opaque Chinese loans, saying the US “doesn’t drown our partners in a sea of debt” nor offer “a constricting belt or a one-way road.”

The US has been increasingly critical of China-backed projects, saying many aren’t properly planned, financially sustainable and of questionable use. A new six-lane highway built by in Port Moresby, for instance, has been dubbed the “road to nowhere” in media reports.

The language in the electricity agreement signed Sunday is a nod to such criticism. The partnership is “intended to focus on the importance of principles-based, sustainable development that is transparent, non-discriminatory, environmentally responsible, promotes fair and open competition, upholds robust standards, meets the genuine needs of the people of and avoids unsustainable burdens.”

At the leaders’ retreat earlier in the day, Abe said all infrastructure projects must conform with standards of openness, transparency and economic viability.

O’Neill said the project to connect hundreds of thousands of families to the power grid would also include fiber-optic internet cables and would allow the nation to “participate in the global

Earlier this month, Australian Prime Minister Morrison unveiled a A$2 billion ($1.5 billion) infrastructure fund for the South Pacific, while announced a NZ$10 million ($6.9 million) fund to help foster sporting and cultural engagement with Pacific island nations.

“It’s time to power up PNG, right across the country,” Morrison said Sunday. “We will always be here to support the people of PNG and support their

said the estimated cost of the project was $1.7 billion.

First Published: Sun, November 18 2018. 11:02 IST