Fiji has announced it will issue a sovereign green bond of US$50 million to raise funds for the Pacific nation to tackle climate change.
Fiji hopes to raise US$50 million (A$62 million) by selling a batch of “green” bonds to investors to help tackle the environmental threats it faces from climate change.
They will finance projects to help achieve 100 per cent renewable energy by 2030, in line with Fiji’s adherence to the Paris climate change agreement.
Fijian Prime Minister Frank Bainimarama said his nation lived on the front lines of climate change.
“The rising seas, changing weather patterns and severe weather events are threatening our development, our security and the Fijian way of life, along with the very existence of some of our low-lying neighbours,” Mr Bainimarama said.
Fiji is just the third nation after France and Poland to issue a sovereign green bond, and the first emerging economy to do so.
Mr Bainimarama said the decision should serve as an example to other countries.
“We are also sending a clear signal to other nations that we can be creative and innovative in mobilising funds and create win-win outcomes for countries and investors in adapting to the serious effects of climate change,” he said.
The announcement comes as Fiji prepares to chair the 23rd Climate Change Conference in Germany in early November.
Australia has backed the initiative through the Fiji partnership.
Alongside the International Finance Corporation, the Fiji partnership aims to stimulate private sector investment and economic growth in the country.
The bonds will be issued by the Fijian government at 100 Fijian dollars each from November 1.
Five year bonds will return a four per cent interest rate, and 13 year bonds have an interest rate of 6.3 per cent.
Home to a little under one million people, Fiji’s 300 volcanic islands are highly susceptible to cyclones and floods.
More than 40 villages are under threat from rising sea levels, and three villages have already moved to higher ground.
THE CLIMATE CHANGE CHALLENGE IN FIJI
* 63 cyclones since 1969
* 146 notable floods since 1969
* In 2016 Cyclone Winston, strongest ever cyclone system recorded in the southern hemisphere hit Fiji, impacting 60 per cent of the population
* Cyclone Winston wiped out the equivalent of one-third of Fiji’s GDP
* Average asset losses from cyclones and floods estimated at more than FJD$500 million (A$310 million) a year.
* Rising sea levels threatening more than 40 villages
* Three villages forced to move to higher ground