The European Union has earmarked over 151 million US dollars to spend on development projects over a six-year period beginning next year.
EU ambassador to PNG, Aldo Dell'Arricia, told the National newspaper that the money would go through direct assistance to government programmes.
Mr Dell'Arricia says the EU was the second largest donor to PNG and its present five-year programme of assistance with the Government exceeded 201 million US dollars in direct grants.
He says that EU was also the main contributor to health initiatives such as the global fund to fight malaria, tuberculosis and HIV/ AIDS.
Mr Dell'Arricia added he was pleased that the EU signed a financing agreement with Treasurer Sir Rabbie Namaliu to provide 6.72 million US dollars to facilitate the participation of civil society in the process of economic and social development.