MANILA - The Asian Development Bank (ADB) says it will lend about 100 million dollars to Papua New Guinea from 2004 to 2006 under a newly endorsed country strategy and program.

The lending program will support projects to develop transport links, including road and water, as well as health sector reform programs, agricultural development and literacy, the ADB said in a statement from its headquarters in the Philippine capital.

However the final loan amount will "depend on availability of funds, as well as the country's achievements in fiscal management, public sector management, and absorptive capacity," the ADB warned.

The bank remarked that the country still suffers from "a poor macro-economic framework, continuing instability and social unrest, and a deterioration in service delivery and infrastructure," warning that external debt ratios are high while reforms have been slow to be implemented.

The lending program will be supported by technical assistance grants totaling two million dollars per year over the period to undertake studies focusing on reducing poverty and improving governance, the ADB said.

AFP 25 February 2004