NEWS

Government will Provide Guarantee of $160m to Fiji Development Bank (FDB)

The motion also proposed that FDB pay a guarantee fee of 0.075 per cent on the utilised credit.
15 Feb 2019 10:10
Government will Provide Guarantee of $160m to Fiji Development Bank (FDB)
Attorney General and Minister for Economy Aiyaz Sayed-Khaiyum outside Parliament. Photo: Ronald Kumar.

 

Parliament yesterday approved the motion for Government to provide a guarantee of $160 million on the funds that the Fiji Development Bank (FDB) will raise in the open market this year.

Attorney-General and Minister for Economy, Civil Service and Communications, Aiyaz Sayed-Khaiyum moved the motion which was agreed to by the Opposition.

The motion called for Government to provide a guarantee of $160 million for the repayment of the short and long-term bonds, promissory notes, term deposits and other short-term borrowings of FDB for the 12-month period from March 1, 2019 to February 29, 2020.

The motion also proposed that FDB pay a guarantee fee of 0.075 per cent on the utilised credit.

“The 2019 government guarantee, will enable FDB to continue facilitation and implementation of government policy by lending to essential sectors of the economy,”  Mr Sayed-Khaiyum said.

“This included, particularly resource- based sectors like agriculture, mining, manufacturing and small and micro enterprises, which will assist our citizens to earn a decent livelihood.

“By Government giving this guarantee, the private investors feel very secure to lend to FDB.”

He added FDB’s total forecasted inflow for 2019 was $71.70 million while the total outlay is $231.70 million.

That leaves a shortfall of $160 million which is what FDB wants to go out and borrow from the market.

“FDB has a good track record as there have never been government guarantee fallouts,” Mr Sayed-Khaiyum said.

“Whatever we guaranteed, we have never had to actually pay as FDB has always paid off its loans.”

Edited by Percy Kean

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