Fiji’s Parliament has recently sanctioned a significant financial guarantee aimed at bolstering the Fiji Development Bank (FDB), supporting its borrowing capacity over the next year, from March 1, 2025, to February 28, 2026. The initiative, proposed by Deputy Prime Minister and Finance Minister Professor Biman Prasad, authorizes government-backed guarantees of up to $190 million through various financial avenues, including bonds and promissory notes.
In his address to Parliament, Professor Prasad underscored the FDB’s pivotal role in driving economic growth in essential sectors like agriculture, mining, and sustainable energy. He asserted that this government guarantee would not only bolster investor confidence but also reduce the bank’s borrowing costs, thus enabling it to extend more substantial support to individuals and businesses seeking financial assistance.
Prasad provided reassurances regarding the FDB’s robust financial management, highlighting its record of never defaulting on government-backed loans in the past. He expressed optimism that the updated guarantee will aid in implementing government policies designed to sustain crucial economic sectors, particularly benefiting micro, small, and medium enterprises.
With the approval of this motion, the total government guarantee exposure has increased to $1.2 billion, representing 8.2% of Fiji’s GDP. The unanimous support for the motion demonstrates a collective recognition of the importance of developing financial mechanisms that can accelerate Fiji’s economic recovery and resilience.
Historically, the FDB has been instrumental in numerous development initiatives, and this new guarantee is anticipated to further enhance its ability to support local enterprises and sustainable projects. This legislative move is perceived as a proactive measure to foster a more robust financial landscape in Fiji.
Overall, the approval of the government guarantee highlights a strong commitment to advancing the economic growth agenda while instilling hope for future business opportunities and sustainable development efforts in the region.
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