Project name: Incentive Fund Phase III

Client name: Australian Government – Department of Foreign Affairs and Trade (DFAT)

Duration: 2010 – 2015 

Location: Asia Pacific, Papua New Guinea

The Incentive Fund Phase III aims to deliver significant and immediately tangible economic and social development outcomes for men, women and children in Papua New Guinea. 


Papua New Guinea, despite a recent period of relative economic improvement and increased workforce participation, is still not achieving the broad-based growth required in order to sustain and maintain macroeconomic stability, and in turn, achieve their Millennium Development Goals.

With more than 80 per cent of the population living in rural and remote areas, infrastructure that supports economic growth is vital. Access to cash markets and health and education services allows PNG communities to improve their standard of living and increase their involvement in the economic development of their country. 


The Incentive Fund Phase III, managed by Coffey, was an A$60 million Australian Government initiative with the goal of delivering significant and immediately tangible economic and social development outcomes for men, women and children in Papua New Guinea.

Its distinct approach set the program apart. Twenty public and private sector organisations which were proven performers were rewarded with critical infrastructure development funding. This was designed to expand their capacity to deliver and maintain high-impact development activities. In the process, organisational capacity was strengthened in a range of areas including financial and project management. Each funded organisation also determined the type and extent of infrastructure works to be completed to ensure they met local demands.


Phase III of the program delivered 20 education and health projects in nine provinces. This followed previous phases implemented from 2000-2008, delivering 39 projects valued at A$110 million in 19 provinces.

Student numbers in secondary, tertiary and technical institutions increased as a result of new and upgraded education infrastructure, with a 30% rise in enrolments. The creation of 56 new classrooms also made smaller class sizes possible, improving the capacity to deliver specialised training. More than1600 new and/or upgraded dormitory places were also created as part of the program. 

In health, the establishment of 28 new and renovated wards, seven new and renovated specialist clinics and 14 remote health centres and aid posts saw more people receiving medical treatment, including pregnant women and infants and victims of violence. Three new HIV/AIDS clinics were also created.

The program also saw the immunisation of 10,000 children in the Madang Province.


Photo credit: Students from Caritas Technical Secondary School in various classrooms, East Boroko, PNG. Photo taken by Ness Kerton for AusAID. View sourceView image license.