AIIB approves $178 million loan and grant package for Fiji

The Asian Infrastructure Investment Bank (AIIB) has approved a US$80 million (FJ$178 million) loan and grant package for Fiji.

AIIB president Zou Jiayi was welcomed with a traditional ceremony at the Grand Pacific Hotel (GPH) yesterday, attended by Prime Minister Sitiveni Rabuka.

The financing, co-financed with the World Bank in a combined US$230 million (FJ$513m) package, targets economic resilience, climate preparedness and private-sector reforms under AIIB’s Energy, Food Security and Economic Resilience Facility.

“We promise that AIIB will be your reliable development partner in your process of development,” Ms Zou said.

Finance Minister Esrom Immanuel confirmed the US$80m (FJ$178m) was a mix of loans and grants, already allocated in this and last financial year’s Budget.

“It’s policy-based funding that will assist the government,” he said, adding the borrowing traced back to COVID-era reforms from 2020.

Mr Rabuka said no loan had yet been signed.

“We have not made any loan, we have not signed any loan, we’re just talking to the people, potential donors,” he said, adding Fiji’s national debt was on track to hit $12.8 billion by month’s end.

Former Reserve Bank Governor Savenaca Narube welcomed the funding, but cautioned that Fiji’s overall indebtedness was “way, way above what it should be,” compared to a healthy benchmark of around half that level.

“That’s the distress level for a country like Fiji,” he said, warning past loans had been “misused” and “applied in a very inefficient way,” failing to generate enough revenue to repay themselves.

He urged Government to itemise the benefits of any new loan. “What will be the benefit to the country,” Mr Narube said.