4 Jul 2007

Fiji turns to China for soft loans

9:06 am on 4 July 2007

Fiji will turn to China for soft loans as aid and other assistance from traditional sources diminish.

A meeting of the interim cabinet yesterday decided to pursue talks with Chinese authorities to secure funding through the Beijing government's soft loan facility.

The interim prime minister, Commodore Frank Bainimarama, told Cabinet that during his visit to Fiji last year the Chinese premier, Wen Jiabao, had revealed that China would set aside 600-million US dollars for soft loans for Pacific island countries.

Commodore Bainimarama says such loans would have a very low interest rate of about 2 percent and terms of 20 years.

There was also the possibility that the loans could later be turned into grants on application on a case by case basis.

Priority sectors for such loans would be rural roads, marine transportation, low cost housing and water supplies.

Commodore Bainimarama says it is now up to Fiji to identify projects and proposals to seek funding under the Chinese loan facility for the Pacific.