A billion dollar loan to finance Papua New Guinea's LNG project obtained by the Somare Government and its subsequent loan repayment failure has the new O'Neill Government staring at a US$400 million shortfall.
The Post Courier reports the loan, from a little known investment company IPIC based out of Abu Dhabi in the Middle East, was obtained by former State Enterprises Minister Arthur Somare.
The blowout now means the Government must find the money for repayments by the March 2014 final repayment schedule.
The minister for state enterprise Sir Mekere Morauta made the revelation in Parliament and said this was the largest investment made by a government ever in PNG and this was investment of public money in the PNG LNG project.
Sir Mekere says they have to investigate the circumstances of the loan because of the shortfall but it was not clear exactly why it had occurred.