Potential wait of “months” for green light on Fiji US$200m ADB loan bid

Fiji’s loan request of US$200million (F$460m) from the Asian Development Bank (ADB) “will be considered by ADB’s Board of Directors in the coming months,” according to a statement from the ADB this week.

As detailed in the Fiji government’s revised 2019/2020 Budget last month, half of the requested loan is to go towards the refinancing of Fiji’s global bond, due for settlement in October this year, while the other half is earmarked for our response to the coronavirus pandemic.

Of the ADB’s 14 member countries in the Pacific region, Fiji is expected to experience the “steepest decline” from the pandemic’s economic fallout, according the ADB’s Outlook 2020, released this week.

 ADB President Masatsugu Asakawa and Fiji’s Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum recently discussed how the Bank may be able to assist Fiji.

“Developing economies will be hardest hit by the coronavirus-driven collapse of the world economy. This crisis demands an unprecedented multilateral response–and we’re encouraged by ADB’s willingness to support Fiji in responding to and recovering from this pandemic,” Sayed-Khaiyum said.

Fiji’s economy, he said, was already feeling the shocks of the pandemic’s impact on major international source markets for trade, manufacturing, tourism, and the aviation industry.

The ADB said Fiji’s US$200m policy-based loan was part of subprogram 3 of the ongoing ADB-supported Sustained Private Sector-Led Growth Reform Program and that the request would be considered by its board over the coming months.

“ADB is committed to helping Fiji combat the impact of this damaging pandemic,” Asakawa said. “We will consider all options, including policy-based lending, that can be approved and disbursed in a timely manner.”

The Fiji government had revealed in last month’s COVID-19 Response Budget how the money would be used.

“Government is refinancing the US$200 million global bond in October 2020 with policy based loans from the Asian Development Bank (ADB) and the World Bank. Government has completed a series of sub-programmes as part of the entire policy-based reform programme and has secured US$65 million from ADB and US$35 million from World Bank.
Government is currently in the advanced stages of the final sub-programme which will result in an additional loan financing of US$200 million by ADB towards global bond refinancing (US$100 million) and budget support for COVID-19 (US$100 million). The implementation of reforms under the sub-programmes have been further supported by Australia and New Zealand in the form of grants and technical assistance,” it said.