Published on and written by Cyril Jarnias
Behind the image of a still largely rural country, Papua New Guinea is preparing for a massive urban transformation. Ports, roads, drinking water, social housing, markets, electricity, industrial zones: a mosaic of projects is beginning to reshape the major cities and several secondary centers. Most are still in the launch or ramp-up phase, but they already herald a change of course for Port Moresby, Lae, and other urban hubs.
This is the percentage of land that remains under customary tenure in the country, highlighting the importance of urban planning.
A Fragile Foundation, Lofty Ambitions
Institutional assessments are severe: cities are described as disorderly, road networks degraded, sewers saturated, pollution on the rise, dumpsites poorly managed, and the shortage of serviced land chronic. In Port Moresby and Lae, the provision of municipal services remains low and fails to keep pace with either population growth or rural-urban migration.
Land use plans, like those for Port Moresby and Lae, are technically sound but have limited effectiveness in guiding actual development. Land practices, informal settlements, and private projects often evolve outside of official planning frameworks.
In this context, several national levers frame the upcoming urban projects: Vision 2050, the Development Strategic Plan 2010–2030, the National Urbanisation Policy 2010‑2030, the various Medium Term Development Plans, as well as structuring programs like Connect PNG for roads or the PNG Electrification Partnership for energy. The ADB (Asian Development Bank), a historic partner since 1971, remains central to financing transport, energy, health, and urban network infrastructure.
Port Moresby: Laboratory of a Metropolis in Transition
Port Moresby concentrates the bulk of the real estate market (about 85%), the strongest housing pressures, and a large part of the urban construction sites. The city is at the center of national policies and financial experiments, whether for large infrastructure projects or urban youth employment programs.
A Master Plan for a “Livable, Productive and Sustainable” City
The Port Moresby Urban Development Plan, often summarized by the slogan “One City, One People, One Future”, serves as the foundation for current projects. The revision launched in 2017, covering 4,402.5 hectares, aims to better integrate three axes: improving quality of life, supporting economic activity, and ensuring environmental sustainability.
Concretely, the plan intends to organize growth around safe transport corridors, pedestrian networks, compact and better-serviced urban centers with infrastructure, water, electricity, and green spaces. It must also frame private investment, from the government precincts of Waigani to major commercial complexes like Vision City Mega Mall or Rangeview Plaza, and new development fronts around Motukea port.
Electricity: Securing the Capital’s Grid
One of the structuring projects for the city is the Port Moresby Power Grid Development Project, managed by PNG Power Limited and financed by the ADB via two loans totaling $66.7 million. The goal is clear: to make electricity transmission and distribution more reliable and extend it to support urban growth and limit blackouts that harm the economy.
The program includes the construction of a substation at Kilakila, the laying of 6.1 km of lines, the modernization of the 11 kV network, and an increase of 7.6 MW in hydropower capacity. Despite delays related to missing plans, foreign exchange difficulties, and insufficient national counterpart funding, financial progress is real, with over 90% of funds from certain loans already committed.
This modernization is part of a broader strategy for low-carbon energy development: the ADB is financing the Sustainable Energy Sector Development Programme, with a $100 million loan and a $10 million Japanese grant, to improve the governance of the electricity sector, strengthen PNG Power Limited, and attract more private investors.
Housing: Demographic Pressure Demands Large-scale Responses
According to the revision of the Port Moresby urban plan, the capital’s population is expected to exceed one million inhabitants in the coming decade. Projections indicate a need for 27,000 to over 62,000 additional housing units by 2030, which would require building approximately 3,000 affordable units per year just to keep up with demand.
Authorities face several difficult realities:
– over 45% of residents were already living in informal settlements in 2019;
– this proportion could reach nearly 60% by 2030 if nothing changes;
– construction costs, driven by the price of imported materials, remain very high;
– a three-bedroom house in business districts can rent for between 3,000 and 5,000 kina per week.
A few figures illustrate the gap between needs and responses.
| Housing Indicator in Port Moresby | Estimated Value |
|---|---|
| Current population (order of magnitude) | ~ 500,000+ inhabitants |
| Estimated share in slums (2019) | > 45 % |
| Projected share in slums (2030) | ~ 60 % |
| Need for additional housing by 2030 | 27,300 – 62,338 units |
| Target for annual affordable unit construction | 3,000 housing units/year |
| Beneficiaries of First Home Ownership Scheme (2019) | 847 people |
| Houses built via this scheme (2019) | ~ 1,000 units |
To try to alter this trajectory, the government is betting on a range of tools: a new National Housing Policy 2023‑2033, reform of the National Housing Corporation, revision of land legislation, future rent controls, introduction of strata titles, and digitization of the cadastre.
The First Home Ownership Scheme, in partnership with the Bank South Pacific, offers loans from 200,000 to 400,000 kina at an interest rate of 4% over a term of 40 years. In 2019, the bank’s portfolio for this program had already reached 400 million kina. However, this scheme remains insufficient relative to total needs, with access to credit still limited for the majority of urban households.
Durand Farm and the Revival of Large Housing Estates
North of the city, behind the so-called 8-Mile area, the Durand Farm Housing Project embodies the ambition to produce housing on a large scale. Conceived as a social housing subdivision of 2,000 plots, it is aligned with Vision 2050 and the Medium Term Development Plan IV.
The project had fallen far behind schedule: houses built under a first “Build‑Sell‑Share” scheme could not be occupied due to a lack of roads, water, sewers, and electricity. The new management of the National Housing Corporation, driven by the Minister for Housing, has since completed these basic infrastructures – progress hailed as unprecedented since 2014.
Phase 1 aims to deliver 100 houses by the end of 2025, followed by 400 more from 2026 onwards. Beyond that, the site is intended to be a showcase for cooperation with other agencies: memoranda of understanding have been signed to make serviced plots available at affordable prices for civil servants under the Public Service Home Ownership Scheme. The Ministry of Foreign Affairs, for example, has launched its own staff housing program there, with 56 officers already allocated titled plots.
This model of large-scale subdivision will be replicated in other provinces starting in 2026, in partnership with governors and district authorities. The main challenge is to avoid repeating past mistakes, particularly the construction of houses without networks (water, electricity, sanitation) or adequate public facilities.
A New Wave of Private Real Estate Projects
Alongside public programs, the private market continues to structure itself around residential, mixed-use, and commercial projects. Around the highly dynamic 8‑Mile suburb, several subdivisions (Kennedy, Skyview, Valkyrie, Glory Gardens, Grand Eden, Malolo, Yorkshire) have made this suburb one of the fastest-growing in the capital.
Some operations stand out for their size or sophistication:
| Project | Location | Key Features |
|---|---|---|
| Sunway Mall | 8-Mile Roundabout | Three-story shopping center, 24 lots, parking, security, backup water and electricity |
| Sasiva Industrial Park | Near Motukea Port | 76 ha, first phase of 10 ha with roads, lighting, water and electricity; lots from 5,000 to 20,000 m² |
| Valkyrie Estate | 8-Mile | Plots of 380 to 450 m², prefabricated lightweight steel houses, construction in 10 to 17 weeks |
| Edai Town | 22 km northwest of the capital | “Satellite town” with independent networks, residential/commercial/industrial mix, partnership with landowners of Boera Village |
| Nambawan Plaza & Penthouse Apartments | Downtown | Office buildings, luxury apartments, and managed residences (Crowne Plaza Apartments) |
These projects reflect the arrival of more structured private funding, often led by major local groups (Lamana, Steamships, Nambawan Super, Curtain Brothers) and, increasingly, through strata title arrangements. But they mainly target a middle to affluent clientele, far removed from the realities of informal workers or new urban migrants.
Urban Employment and Neighborhood Renewal
The social challenges accompanying rapid urbanization – youth unemployment, a massive informal economy – have led authorities and the World Bank to experiment with specific programs in Port Moresby. The Urban Youth Employment Project (UYEP) has trained over 15,000 youth since 2011, 40% of them women, with an access rate to formal employment of about 35%.
The second phase (UYEP II) integrates micro-projects of urban renewal, such as the rehabilitation of Lahara Park and the sidewalks of Minihi Avenue in Boroko. This type of project, worth about one million kina, combines the creation of temporary jobs for youth in transition and the concrete improvement of public spaces. It illustrates how urban projects can become social levers, beyond just large infrastructure.
Lae: Industrial Capital in Urban Transition
The country’s second-largest city, capital of Morobe Province and main cargo port, Lae plays a strategic role in connecting the coast and the Highlands. The starting point of the Highlands Highway, it is a hub for both freight transport inland and a broad industrial base.
A New Central Market as a Symbol of Modernization
Among the most emblematic upcoming urban projects, the reconstruction of the Lae Main Market holds a special place. This large-scale project, costing over 100 million kina, jointly funded by Australia, New Zealand, and the Lae City Authority under the Australian ESIP program, aims to give the city a modern, safe, and inclusive market.
The market will be organized in two-level pavilions, incorporating high-standard earthquake-resistant design and a full range of services for traders and visitors.
Kiosks for SMEs, commercial stalls, and dedicated offices for vendors, with dedicated access.
Secure parking, on-site police post, and restrooms accessible to people with disabilities.
On-site banking services and ATMs.
Implementation of an enhanced waste management and collection system.
Construction meeting high seismic resistance standards, essential in the Pacific Ring of Fire.
Construction is to take place in five phases, over 18 to 24 months, while a temporary market continues to operate efficiently. The Lae City Authority even organized a study mission to the recently completed Kimbe market to draw inspiration from its management models. Beyond infrastructure, the project highlights local job creation and the involvement of regional businesses, making it also an economic development project.
Urban Roads: Essential Catch-up
Lae has had a reputation for poor road conditions since the early 1990s. Several waves of national investment – 50 million kina in 2008, 100 million in 2011, then 150 million in 2013/2014 – aimed to rehabilitate major arteries, often using concrete to increase lifespan. A major industrial project to upgrade industrial area roads had also been funded by Australia as early as 1997.
A new cycle of work, supervised by the Department of Works and Highways (Morobe office) in partnership with the Lae City Authority, is underway on a 3 km section between the Second Seven dump and the Busu bridge. The work involves sidewalks, drainage, and concreting. It is funded by the national government and executed by JVPNG Construction.
Road governance is now clearer: the Lae City Authority handles routine maintenance, while major reconstructions fall under the Provincial Works Office. This arrangement aims to avoid the overlapping responsibilities that in the past slowed down interventions.
Lae‑Nadzab: A Planned Urban Corridor
Beyond basic infrastructure, the Lae region has equipped itself with an ambitious planning tool: the Lae‑Nadzab Urban Development Plan, developed with JICA support and launched in May 2017. A unique feature of this plan: it extends the urban perimeter far beyond traditional limits, to the Erap River, the villages of Labu Butu and Gabensis, the Busu River, and the Situm area, including village lands for the first time.
The idea is to enable local communities to commercially develop their land within a planned framework, rather than endure informal expansion. This choice is strategic as the rehabilitation of the Highlands Highway and the expansion of Nadzab Airport enhance the attractiveness of the Lae‑Nadzab corridor for industries, logistics, and new residential subdivisions.
Ports, Mines, and Real Estate Prospects
Lae Port, already the busiest in the country, is at the heart of a national modernization program led by PNG Ports. Between the tidal basin (Lae Tidal Basin) project, the possible extension of the international wharf from 150 to 240 meters, and the creation of an adjacent 45-hectare industrial park, the city is positioning itself as a regional transshipment hub. The arrival of the largest container ship ever to come to Papua New Guinea in early 2025 illustrates this progress.
This logistical growth, combined with large-scale mining projects like Wafi‑Golpu, is expected to fuel growing demand for housing, offices, services, and urban facilities. Already, projects like the Nambawan Super mixed-use building or the Malahang industrial area signal this shift. Road rehabilitations and the streamlining of the urban network will be crucial to avoid traffic gridlock and the chaotic spread of informal settlements.
Roads, Bridges, and Connectivity: The Backdrop of Urbanization
Upcoming urban projects in Papua New Guinea cannot be understood without placing them within the national Connect PNG strategy and the major road programs of the ADB and the World Bank. Cities – Port Moresby, Lae, Mount Hagen, Kokopo – act as nodes in a network being consolidated.
Connect PNG and Major Road Axes
The Connect PNG program, planned over twenty years, aims to connect 100% of the country by road, by improving 16,000 km of existing roads and building 1,800 km of “missing links”. Phase 1 (2020‑2027) targets 4,220 km of 16 priority highways, 633 km of new links, and 4,000 meters of bridges.
Available figures show progress, but also the scale of the task:
| Road Objective / Outcome (Connect PNG) | Length / Number |
|---|---|
| Total length of national priorities | 16,000 km |
| Targeted improvement (phase 1) | 4,220 km of roads |
| Missing links to build (phase 1) | 633 km |
| Length of bridges to build (phase 1) | 4,000 m |
| Recent proportion of roads “in good condition” | 21% of strategic network (~ 3,500 km) |
| Planned national bridges | 2,000 |
| Bridges already completed on national roads | 165 |
| Rural bridges built | 2,000 m |
The ADB plays a central role in certain corridors, particularly in the Highlands. The Sustainable Highlands Region Core Road Network Project, with $280.1 million, plans to rehabilitate five district roads totaling about 120 km and 19 bridges in four provinces. The goal is to streamline the transport of people and goods, strengthen resilience to disasters, and provide better access to basic services for rural communities that supply cities with agricultural products.
Another instrument, the Transport Project Readiness Facility ($65 million), finances the preparation and engineering of road projects at the subnational level, including in the Southern, Highlands, Momase, and New Guinea Islands regions. This “project factory” is essential to accelerate the implementation of complex projects in and around urban centers.
Transport Project Readiness Facility
Bridges to Connect Urban Peripheries
Bridges play a key role in structuring agglomerations, often separated by wide rivers. The Laloki Bridge, completed in 2017 for 9.3 million kina as part of a program to replace 33 single-lane bridges, illustrates this type of investment. It now facilitates movement between peri-urban areas of Port Moresby and the heart of the agglomeration.
This number represents the meters of new flood protection works planned by recent programs to secure at-risk land.
Water, Sanitation, and Climate Resilience: Nationwide Projects
The urbanization of Papua New Guinea is also playing out on the ground of drinking water, sanitation, and adaptation to climate change, particularly for coastal and island towns.
Urban Water: Securing Supply
The Urban Water Supply and Sanitation Security and Resilience Improvement Project (UWSSSRIP), implemented by Water PNG Limited with support from the ADB, initially targets the cities of Port Moresby and Vanimo. The idea is to improve the security and resilience of water and sanitation systems in vulnerable urban centers, often subject to demographic pressure and increasing climate risks.
This is the amount in euros of a European project aiming to improve access to drinking water and reduce network losses in Papua New Guinea.
Climate Resilience: Anticipating Shocks on Cities
Climate studies conducted in the Pacific show that Papua New Guinea could lose up to 15.2% of its GDP by 2100 if nothing is done to adapt infrastructure and policies. The ADB is financing, via the Strategic Climate Fund, a $24.25 million program dedicated to climate resilience, notably in 21 islands and atolls in the provinces of Bougainville, East New Britain, Manus, Milne Bay, and Morobe.
The climate diagnostics, adaptation plans, pilot investments, and other planned measures will have a direct impact on small coastal and island towns. Their future ports, markets, housing, and road networks will need to integrate these climate constraints to avoid becoming obsolete or vulnerable.
The European Union, the European Investment Bank, and the French Development Agency complement this approach via the Rabaul Port modernization project, conceived as the country’s first “green port”. The work includes wharf rehabilitation, dredging, storage facilities, and equipment aimed at reducing the environmental footprint (renewable energy, waste management), while accounting for sea-level rise and extreme events.
Governance, Innovative Financing, and the Role of PPPs
The scale of upcoming urban projects makes the use of blended financing and new partnership models between the state, provinces, municipalities, and the private sector unavoidable.
The Asian Development Bank, a Systemic Partner
With $1.47 billion in active portfolio (22 loans, 10 grants, 4 technical assistances, 2 private operations) and cumulative commitments of several billion since 1971, the ADB is the country’s main multilateral donor. Its successive partnership strategies align with national plans (Development Strategic Plan, National Strategy for Responsible Sustainable Development) and prioritize transport, energy, health, and urban infrastructure.
Amount in millions of dollars of the ‘Improving Financial Access’ program aimed at strengthening the regulatory framework for financial services.
Public-Private Partnerships as a Lever for Urban Development
Since the adoption of the National PPP Policy and the PPP Act in 2014, Papua New Guinea has sought to structure a pipeline of public-private partnership projects, particularly for urban assets: roads, housing, social facilities. While the PPP Center planned by the law has been slow to become operational, studies supported by the ADB and IFC have already identified models suitable for housing, such as Direct Relationship Ownership Housing or Direct Relationship Rental Housing schemes.
A pilot project in Port Moresby, designed with the IFC and the Affordable Housing Institute, illustrates a model where the state (via the National Housing Corporation) provides the land and infrastructure, while private developers finance, build, and market the housing. This model aims to reconcile social objectives, environmental requirements for climate resilience, and economic viability.
Beyond housing, projects like the Motukea Port Hub or Lae port development result from complex arrangements involving the state, specialized private operators (ICTSI), and development finance institutions. They foreshadow a new generation of integrated urban projects, where industrial zones, logistics platforms, and residential neighborhoods develop around major hubs.
Persistent Challenges and Conditions for Success
Despite the proliferation of construction sites and funding, obstacles remain numerous. The real estate market still suffers from a lack of titled land (only 3% of land is state-owned), high construction costs, a deficit of skilled workers, and sometimes incomplete or poorly enforced regulations. Land fraud, unresolved titles on inheritances, and the lack of clear legal protection for buyers in case of developer bankruptcy also hinder confidence.
In cities, the gap between official plans and reality results in the development of informal middle-class subdivisions without services or titles on customary land, and the proliferation of slums on at-risk land. Sanitation services lag significantly, as in Port Moresby where a majority of residents are not connected to the sewer network, with treatment plants saturated since the 2000s and overloaded dumpsites.
Studies commissioned by the National Research Institute emphasize six essential pillars for urban plans to become truly operational: secure land tenure, clarified planning responsibilities, sufficient funding, strengthened human and technical capacities, robust governance, and a climate of confidence for private investment. Without these foundations, projects risk multiplying without coherence, or encountering institutional roadblocks.
Several positive signals mark a transformation: revision of major laws (housing, land, public procurement), strengthening of local authorities (e.g., Lae City Authority), implementation of revenue-sharing mechanisms (like allocating a share of VAT to Lae), deployment of technical tools for monitoring and auditing road infrastructure, and increased commitment to climate resilience and social inclusion, including gender plans on port projects and youth training programs.
Towards Which Papua New Guinean City Tomorrow?
The upcoming urban development projects in Papua New Guinea paint a contrasted landscape. On one side, megaprojects of infrastructure – deepwater ports, highways, electricity programs – driven by the ADB, Australia, the European Union, Japan, or the World Bank. On the other, more modest operations, yet just as structuring: modernized municipal markets, social housing estates, youth employment programs, upgrading of informal settlements, strengthened planning capacities.
To gradually transform its cities like Port Moresby or Lae, Papua New Guinea is betting on several levers: integrating neighboring villages into urbanization, involving customary communities in the development of their land, linking investments to climate strategies, promoting public-private partnerships, securing land titles, and addressing critical deficits in water, sewer, and electricity infrastructure.
The urbanization of the country, projected at about one-quarter of the population by 2050 according to international estimates, will depend on the ability to converge these multiple projects towards more inclusive, better connected, and better protected cities in the face of natural risks. The projects currently launched in Port Moresby, Lae, and the main port centers offer a first glimpse of this urban future under construction.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
