Fiji and Japan recently formalized an agreement for a $72 million Stand-by Loan aimed at supporting the second phase of the Disaster Recovery and Rehabilitation initiative. This project aligns with the Fijian government’s goals regarding disaster risk reduction and management.
The Stand-by Loan is designed to provide immediate financial assistance during post-disaster recovery. It allows the Fijian government to request loans for disaster-related recovery costs once a natural disaster is officially declared.
The primary focus of the loan is to bolster economic stability and development in Fiji, particularly through enhancing disaster risk management capabilities and aiding post-disaster recovery efforts. Deputy Prime Minister and Finance Minister Professor Biman Prasad detailed that the loan will have a favorable 40-year repayment period, including a 10-year grace period, and a low annual interest rate of 0.4 percent.
“This funding will only be activated in the event of a significant natural disaster following a Cabinet declaration of a state of natural disaster,” said Prof Prasad. He noted that the Japanese government, along with the Asian Development Bank (ADB), has played a key role in funding various sectors in Fiji, including infrastructure, education, health, and disaster response.
Prof Prasad also mentioned that the first phase of disaster financing assisted in rehabilitation efforts during Tropical Cyclone Harold in 2020. Japanese Ambassador to Fiji Rokuichiro Michii highlighted that this concessional loan demonstrates the strong relationship between Fiji and Japan, particularly in disaster response and risk management.
Ambassador Michii affirmed Japan’s dedication to supporting Fiji’s development through official development assistance and mentioned that the recent agreement is part of a larger initiative that includes the signing of five additional exchange notes expected in the coming weeks, with a total value of approximately $133 million.