Page 22 - IB August 2020

Economy Economy

over the last decade, as many smaller island states struggled Exsley Taloiburi confirmed that the GCF’s health window
to access funds from global climate finance institutions such could not be used for medical supplies or equipment, but
as the Kyoto Protocol Adaptation Fund and GCF. Even though might be used for health infrastructure that was adversely
most island nations have now obtained GCF funding, the affected by climate change.
idea of a regional “one stop shop” for resilience and disaster “A possible project would be the relocation of a hospital,”
finance has slowly won favour. he said. “Most of our public hospitals are close to coastal
After disagreements at FEMM 2019, a specially convened areas where there are effects of sea level rise. For example,
meeting of Forum finance ministers discussed the Pacific in the Solomon Islands, they have been discussing for a num-
Resilience Facility (PRF) in July last year. They endorsed the ber of years now to relocate the National Hospital to higher
purpose of the new regional funding mechanism “to provide ground. When you are building a new hospital, you could also
predictable, sustainable, accessible and accountable funding then build quarantine rooms in those areas that could also be
for disaster preparedness and climate risk resilience-building relevant for pandemics in the future as well.”
within vulnerable communities.” As well as the multilateral institutions, major regional
Speaking to journalists after FEMM 2020, Dame Meg Taylor donors like Australia, China and the United States have estab-
said a regional fund will give increased control to Forum lished new funding mechanisms for bilateral grants or loans.
member countries: “It is very important that the Pacific start China’s Asian Infrastructure Investment Bank (AIIB) has been
thinking about institutions to help ourselves. I think there is a followed by the Australian Infrastructure Finance Facility for
really strong wish by many of our ministers that we do things the Pacific (AIFFP), an AUD$2 billion fund that includes $500
to start helping ourselves in the region.” million in grants and $1.5 billion for concessional loans.
The meeting approved the PRF prospectus and transitional Australian Minister for International Development and the
arrangements, and acknowledged Samoa’s offer to host the Pacific Alex Hawke told Islands Business: “The Australian
institution once it’s formally established. In the interim, the Infrastructure Finance Facility has a climate window within
Forum Secretariat in Suva will continue to host the initiative. it. This means that we are looking for projects that are ef-
To capitalise the fund, Forum member governments plan to fective in the infrastructure sense, but also help the climate
hold a pledging conference, seeking US$1.5 billion. Secretary and commit to emission reductions and contribute to climate
General Taylor noted: “When one sees the figure US$1.5 bil- resilience.”
lion, it sounds like an enormous amount of money – and it is. Following a virtual summit on 5 August between PNG Prime
But if you look at it, then it is 1 per cent of the GDP of the Pa- Minister James Marape and his Australian counterpart Scott
cific and you multiply that by five years, it is not that huge.” Morrison, Australia will now fund a major renewable energy
The Forum Secretariat is working with PSIDS ambassadors in initiative in its northern neighbour.
New York and the UN Secretary General’s office to discuss the “The Markham Valley Solar Plant is one of our first an-
best timing for a global funding conference. Taylor confirmed nounced initiatives under the Infrastructure Finance Facil-
that initial plans to hold this meeting in 2020 have been ity,” Hawke said. “This is a massive solar plant that stands
postponed until at least next year: “Taking into consideration to provide stability to part of the grid in Papua New Guinea.
the impact of COVID on economies around the world now, It is a substantial commitment of money, a climate resilient
everybody is hurting in some way and has to rebuild their own investment and a renewable plant for power generation.”
countries. At the right time, we will seek a pledging event so Even though Australia used to be co-chair of the GCF Board,
we can raise those resources.” the Morrison government did not provide new and additional
funding to the global fund during its 2019 replenishment
Multilateral funding round. This comes despite Australia’s crucial role in supporting
Beyond the discussion on the PRF, FEMM 2020 looked at dif- Pacific governments when it served on the GCF Board. Howard
ferent ways to tap financial resources for the health, econom- Bamsey, the former Executive Director of the GCF Secre-
ic and climate crisis facing island states. tariat in South Korea, argues that past efforts by Australia to
Multilateral Development Banks (MDBs) like the World combine bilateral and multilateral funding have been very
Bank and Asian Development Bank have now expanded their successful.
definition of disaster risk to include pandemics. PIFS climate “When Australia was participating in the Green Climate
finance adviser Exsley Taloiburi says that “Forum Island Fund, we invested $200 million,” Bamsey told an ANU seminar
Countries could leverage existing resources under climate last month. “I think largely as a result of Australian efforts,
and disaster risk financing mechanisms to build the resilience the GCF at that point ended up investing $600 million in the
of the health sector in our region. A number of Forum Island Pacific. I’m thinking of hydro in Solomon Islands or the port in
Countries have already accessed disaster risk funding from Nauru, that was a combination: Australia working to develop
MDBs like the World Bank and ADB to respond to COVID-19.” projects that could be taken to the Green Climate Fund and
Tuvalu’s Finance Minister Seve Paeniu also noted that “the where you had some Australian investment, that could be
Green Climate Fund has provision for health pandemic sup- used to leverage some GCF investment. You could get a very
port, but up to this time no country in the Forum Island Coun- good result.”
tries region has accessed that provision under the GCF.” In the United States, the Trump administration has refused

22 Islands Business, August 2020