Green bond query

THE announcement by Economy Minister Aiyaz Sayed-Khaiyum in Parliament that Fiji’s green bond will be listed on the London Stock Exchange (LSE) next month has been questioned.

University of the South Pacific economist Dr Neelesh Gounder says green bonds are basically loans exclusively to fund projects that have environmental and climate benefits.

Dr Gounder said with this announcement, how could the Fijian public be assured that funds from the green bond would strictly be used towards environmentally or climate benefit outcomes.

In his ministerial statement, Mr Sayed-Khaiyum said the Prime Minister would travel to London to officiate at the launch of the green bond.

“London Stock Exchange — the world premier listing choice — and by listing our green bond in the London Stock Exchange, we will inevitably be raising Fiji’s international profile amongst investors,” he said.

Mr Sayed-Khaiyum said the LSE would be working hard to promote Fiji’s green bond and secure more international investors.

“As mentioned last week, there was a drastic need for increased private sector participation through climate funds in climate finance and investing.

“Fiji’s green bond is one way that the private sector can show the support for climate finance.”

He said proceeds from the green bond would be put into a ring fence account which could only be used on climate mitigation projects identified in the 2017/2018 National Budget.

Dr Gounder said green bonds could be an alternative to concessionary loans if such loans were linked to regional politics.

Responding to the minister, National Federation Party leader Professor Biman Prasad said bonds were debts.

“It is a debt that we are piling on ourselves,” Prof Prasad claimed.