Fiji and Japan have formalized a $72 million Stand-by Loan agreement aimed at enhancing disaster recovery and rehabilitation efforts. This initiative is part of Fiji’s strategy to improve disaster risk management and prepare for the financial demands that emerge after natural disasters.
The loan agreement enables the Fijian government to request financial support for disaster recovery costs as soon as a natural disaster is officially declared. The purpose of this Stand-by Loan is to foster economic stabilization and development in Fiji, particularly by strengthening its capacity to manage disaster risks and facilitate post-disaster recovery.
Finance Minister Biman Prasad highlighted that this highly concessional financing features a repayment term of 40 years, with a 10-year grace period and a minimal annual interest rate of 0.4 percent. He clarified that the funds would only be accessed in the event of a significant natural disaster following a Cabinet declaration.
Professor Prasad acknowledged the pivotal role of the Japanese government, through the Asian Development Bank (ADB), as a key contributor to Fiji’s infrastructure, education, health, and disaster response initiatives. He pointed out that the first phase of the disaster financing was utilized for recovery efforts following Tropical Cyclone Harold in 2020.
Japanese Ambassador to Fiji, Rokuichiro Michii, noted that this concessional loan exemplifies the strong Fiji-Japan partnership, with a focus on disaster response and risk management. He affirmed Japan’s commitment to supporting Fiji’s development through official development assistance and mentioned that the loan signing is part of a broader set of five exchange notes, which are expected to total around $133 million in the coming weeks.