Fiji issues first developing country green bond to fight climate change

Fiji issues first developing country green bond to fight climate change

By Georgina Wade

Fiji, which holds the presidency of COP23 this year, has become the first emerging economy and small island state to issue a sovereign green bond in support of climate change mitigation and adaptation efforts. With aims of raising 100 million Fijian dollars, Prime Minister Frank Bainimarama cites the move as a step towards using financial innovation in protecting the vulnerable.

The issuance of the bond came at the request of Fiji’s Reserve Bank who were provided technical assistance by the World Bank and the International Finance Corporation (IFC). This collaboration took place under a three-year Capital Markets Development Project supported by the Australian Government aimed at promoting sustainable economic growth and reducing poverty in the Pacific.

In a statement issued by World Bank Group President Jim Yong Kim, Fiji’s adoption of this bond “has demonstrated that green capital markets can be created in emerging economies, and that all countries, big and small, have an important role to play in facilitating climate solutions.”

With aims of boosting climate resilience, Bainimarama believes that the issuance of this green bond aimed at raising funds for climate-friendly projects sets an example to other climate-vulnerable nations. Living on the front lines of climate change, the Pacific island state is particularly susceptible to rising seas, changing weather patterns and severe weather events that affect its economic development and the security of its residents. The island state is still recovering from a direct hit by Cyclone Winston in 2016 that resulted in economic losses estimated at a third of the country’s GDP.

The bond proceeds will be used towards adaptation projects that support its commitment to a 100% renewable energy conversion and a 30% reduction in energy sector CO2 emissions by 2030. Through these projects, Fiji expects to increase resilience to extreme events caused by climate change.

Cover photo by Jovi Waqa on Unsplash.

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