Papua New Guinea's prime minister Peter O'Neill says a 2.9 billion US dollar loan from China will greatly improve infrastructure in the country, dismissing criticism that the loan is too big to be repaid.
The O'Neill government and China's Exim bank are currently working out the details of the massive loan, first announced two months ago.
Mr O'Neill says the money will be used to upgrade the Highlands Highway, a road running through the heart of PNG, as well as improvements to the nation's airports.
The opposition has criticised the deal, saying a more than 242 million US dollar deficit in the 2012 budget means loan repayments will be a huge burden on the country.
However, Mr O'Neill says he expects the economy to continue to grow at an average eight per cent over the next year, while estimates suggest that figure will double in 2014 when liquefied natural gas projects are expected to come online.