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Fiji Receives Praise For Raising Green Bonds

Fiji Receives Praise For Raising Green Bonds
Prime Minister and COP23 President Voreqe Bainimarama with Director ‘Climate Strategy, governance and emissions from non-trading sectors’, DG Climate Action of the European Commission Artur Runge-Metzger in Bonn, Germany. Photo: DEPTFO News
November 09
13:50 2017

Fiji’s decision to raise Green Bonds has received praise from the Climate Bonds Initiative during a penal discussion in which Attorney-General and Minister responsible for Climate Change Aiyaz Sayed-Khaiyum participated in alongside representatives from Kenya and Nigeria.

Fiji is the only emerging economy to have raised the Green Bonds, money from which will be used for specific projects to mitigate and adapt to climate change.

Mr Sayed-Khaiyum discussed how Fiji with help from the International Finance Corporation (IFC) raised the Green Bonds.

The fact that Fiji is the only emerging economy to do so, beating out many who are still in the process of dotting the I’s and crossing the t’s has also won praise at various COP23 side events.

Nigeria also acknowledged the work Fiji has done to ensure transparency and accountability of raising the Green Bonds and is keen to adopt some of Fiji’s best practices as they also prepare to raise Green Bonds.

In simple terms, Green Bonds or Green Sovereign Bonds are the same as any Bonds Governments raise to raise money but in this case, any money raised from this is used for specific climate change related projects.

In Fiji, the noteworthy uptakes were  from the commercial banks.

Mr Sayed-Khaiyum explained that Fiji did not want to rely only on its superannuation fund- Fiji National Provident Fund to buy into the Green Bonds and Fiji is expecting investment into it by foreign companies.

World Wide Fund for nature (WWF) France which had bought Green Bonds which France had issued said WWF Fiji could be explored as an investor in Fiji’s Green Bonds, but the onus was left on WWF Fiji.

Mr Sayed-Khaiyum also detailed the newly rolled out Environment and Climate Adaptation Levy or ECAL.

He explained to the panel that in order to ensure transparency, Government would be releasing details every quarter on how the ECAL has been used in various climate change adaptation or mitigation projects.

This information would be widely displayed at the Nadi International Airport and also at various municipalities.

So, for example, if money from the Levy has been used in relocating of a village which has lost land due to rising sea water, people will have that information easily available.

Giving examples of where the Green Bonds will be used, Mr Sayed-Khaiyum explained by the way of an example that in the aftermath of TC Winston, large parts of the country were left without power because all the power poles with the electricity cables had fallen.

Now, instead of putting those poles back up, it made more sense to invest in underground cables, which will not be affected in the event of another cyclone. While this exercise costs around FJD20million more, in the long run it makes economic sense.

The first set of underground cabling is already underway on the stretch leading to Nadi International Airport.

This costly climate adaptation projects needed funds which cannot just be sustained through the national budget.

Therefore, Mr Sayed-Khaiyum said there should not be a demarcation between climate funds and development funds for countries such as Fiji.

He also took part in another panel discussion organised by the European Investment Bank (EIB) where discussions have also taken place on how EIB can assist Fiji with its new Ministerial portfolio of Ministry for Waterways.

Edited by Mohammed Zulfikar

Feedback:  jyotip@fijisun.com.fj

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