As
the world gets ready to descend on Bonn for COP 23 in November, the issue of
access to climate finance will be a key part of Fiji's agenda. Fiji will issue
$100 million worth of “green bonds” to pay for projects to achieve the 100%
renewable energy goal it agreed to at the Paris Climate Change Agreement, to be
achieved by 2030. These bonds will be issued at FJ$100 each from November 1st,
2017. The 5 year bonds will yield a 4% interest rate, and 13 year bonds have yields
of 6.3%.
Ratu Sailosi Dawai (right) an Integrity Champion at the Pre COP Conference held at Sheraton Nadi on Oct 16-18
Of
the developed nations only France and Poland have issued sovereign green bonds.
Australia has supported the Fiji initiative. The International Finance
Corporation has shown support as the green bond is envisaged to stimulate
private sector investment and economic growth in the country.
Climate
finance deals with the financing of activities that bring down greenhouse gas
emissions or helps society to adapt to the impact of climate change. A green
bond is a debt investment in which an investor loans money to an entity (usually
a government) which borrows the funds for a defined period of time at a
variable or fixed interest rate to fund environment-friendly projects. Green
bonds first became popular when the World Bank issued them in debts linked to
climate change. Between 2005 and 2014 climate-induced disasters in the Asia and
Pacific region killed nearly 225,000 people and caused an estimated $350
billion in damages. The Asia Development Bank (ADB) will double its climate
financing to $6 billion by 2020 in order to assist developing nations fight
against climate change. STC Winston claimed the lives of 44 and left Fiji with
a total damage bill of US$1.4 billion or one third of the GDP.
"Nations cannot individually protect themselves or their people from #ClimateChange. This is why international negotiations are so vital."
The following website (http://www.sbs.com.au/news/article/2017/10/18/fiji-issue-bond-fight-climate-change)
notes that since 1969, Fiji has faced 63 cyclones and 146 notable floods. In
2016 Severe Tropical Cyclone Winston was the strongest ever cyclone system
recorded in the southern hemisphere to strike Fiji, severely affecting 60% of
the population. 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.
One
thing that came out very clearly after STC Winston was that it was like a
wrecking machine that affected us in terms of very high relief and rehabilitation
costs and the loss of loved ones. We also lost homes, crops, livestock and
there were days when there was no electricity, transport and water. It was
realized after STC Winston that a much bigger funding avenue would be needed to
help Fiji cope with the effects of and the need to adapt to climate change and
natural disasters.
Fiji
was one of the first developing nations to receive a grant of US$31 million
from the Green Climate Fund (GCF) as part of a loan from the Asian Development
Bank for the Urban Water Supply and Wastewater Management Project that will
benefit a third of Fiji’s population of 860,000. This project allows for new
infrastructure to increase clean water supplies by 20% and boost wastewater
treatment capacity by 200% in the greater Suva area. The water intake for the
new system will be moved higher up the Rewa River to avoid saltwater intrusion
from a rise in the sea level and to cope with likely shifts in river flows in
the future. The water system will be climate-proofed through a number of measures
including strengthening pipes to make them more resilient to flooding. Preety
Bhandari, of ADB’s climate change and disaster risk management said that part
of the success of the joint submission to the Green Climate Fund was due to the
‘determination of the Fijian Government to link the resilient water supply and
wastewater project to climate considerations. A unique feature of this project
was that the Fijian Government showed very clearly that it was trying to
integrate climate considerations into its normal development projects.”
Given
the constant threat of natural disasters Fiji has to consider the impact of the
changing climate and not being sucked into a vicious cycle of rebuilding our
nation and our economy from one disaster after the next. Diversifying and
broadening the economic base, despite the extensive cyclone damage resulted in
the economy rebounding to achieve its seventh consecutive year of economic
growth.
Fiii
is building resilient infrastructures now given that the costs of beginning from
scratch and rebuilding after extreme natural disasters are even higher. That is
why Fiji’s public sector infrastructure meets tougher building codes and
standards as short-term fixes will only cause more problems for the nation.
For more information on COP 23 please go to the Fiji Secretariat website
https://cop23.com.fj/
The website also has their twitter and facebook links
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