Fiji’s membership with the Asian Infrastructure Investment Bank [AIIB] will expand the Fijian Government’s funding source for large infrastructure projects that will stimulate economic growth.
The Fiji Development Bank [FDB], in its presentation to the Parliamentary Standing Committee on Foreign Affairs and Defense (13.06.17), has recommended on how the Government could use the FDB as its conduit in deploying global funding towards infrastructure development.
Acting Chief Executive Officer, Mr. Nafitalai Cakacaka, said the benefits of Fiji’s membership with the AIIB includes the opportunity to contribute to the AIIB’s policy decisions on financial issues relevant to small island economies such as Fiji.
“The partnership will allow easy access to finance and we hope that it will be flexible to address challenges in matching terms and funding structures against the nature of the projects,” he said.
He said it will also provide an opportunity for the government to co-fund infrastructure development with other multilateral development institutions.
“One of our key interest, at this stage and as holding Presidency to COP23, is to analyze the impact of AIIB’s Articles of Agreement affecting Fiji’s ability to source climate resilient infrastructure financing,” said Mr. Cakacaka.
“Fiji, as a member, could easily access funds for building climate resilient infrastructure and help support climate resilient economic growth,” he said.
He said that the availability of low cost of capital could also influence the domestic market rates.
“Local financial institutions and banks who hold capability to provide sustainable development finance facilities could also be affected depending on the lending rates,” he said.
“The Agreement does not state the cost of fund as well as accessibility level. Analysis needs to be done in comparison with other multilateral financing development institutions in terms of cost of fund and fund accessibility level,” he said.
“While there are also regional opportunities to extend lending to other Pacific Island Countries who are not members of the AIIB, we need to ascertain our national short and long term infrastructure development needs through our national development plan for the next 5 to 10 years in preparing projects for funding,” he said.