Fiji’s Economic Boost: Parliament Approves $190M Bank Guarantee

Parliament has recently approved a financial guarantee for the Fiji Development Bank (FDB) designed to support its borrowings over a period of 12 months, from March 1, 2025, to February 28, 2026. The motion, moved by Deputy Prime Minister and Finance Minister Professor Biman Prasad, allows for up to $190 million in government-backed guarantees using various financial instruments, including bonds and promissory notes.

During his address, Professor Prasad emphasized the FDB’s essential function in bolstering economic growth across critical sectors such as agriculture, mining, and sustainable energy. He noted that this government guarantee would not only enhance investor confidence but also lower borrowing costs for the bank, enabling it to provide better support for individuals and businesses in need of financial assistance.

Prasad reassured Parliament of FDB’s strong financial management, pointing out that it has never defaulted on previous government-backed loans. He expressed confidence that the updated guarantee will facilitate government policies aimed at sustaining vital sectors of the economy, particularly for micro, small, and medium enterprises.

By approving this motion, Parliament has effectively increased total government guarantee exposure to $1.2 billion, or 8.2% of Fiji’s GDP. The motion received unanimous support, reflecting a broad agreement on the importance of fostering financial mechanisms that can stimulate Fiji’s economic recovery and resilience in the face of challenges.

Historically, the FDB has played a crucial role in many development projects, and this new guarantee is set to further enhance its capacity to support local businesses and sustainable initiatives. This development is seen as a proactive step toward securing a more robust financial environment in Fiji.

Overall, the approval of this government guarantee not only showcases the commitment to the economic growth agenda but also signals optimism for future business endeavors and sustainable development initiatives within the region.