[Photo: PARLIAMENT OF FIJI/ FACEBOOK]

The government will still have to finance a large share of infrastructure needs despite the new $1.5 billion Australian financing package.

Permanent Secretary for Finance Shiri Goundar told the Standing Committee on Foreign Affairs that the Australian financing would cover only a small portion of Fiji’s overall funding requirements.

He said Fiji collects roughly $4 billion in tax revenue, in addition to other sources of revenue, while the Australian package is expected to average about $150 million a year.

“I mean, I don’t see it as handouts that are going to create a dependency culture, but more so in terms of it trying to resolve or solve some of these major issues that’s going to be very, very costly to the country and to our people if not dealt with, especially this whole, if you see the significant funding on towards HIV and this drugs issue.”

Goundar said the money would largely be provided through project financing, rather than unrestricted budget support.

Some funding will be used as budget support, but most will be tied to specific projects.

The government states this funding can also help Fiji attract additional financing from multilateral development partners.

Goundar pointed to major infrastructure such as ports, where Australian support could be combined with financing from the Asian Development Bank, World Bank and other partners.

The proposed redevelopment of the shipbuilding facility at Walu Bay is one project still at the feasibility stage.

Goundar said Australia has been involved in a feasibility study to determine the business case, the required investment and whether the project can be sustained over the long term.

He said the shipbuilding project forms part of the wider port redevelopment plans being pursued with several development partners.

The financing will not immediately translate into construction.

Government agencies will first have to design projects, conduct due diligence, call tenders and establish whether Fiji has enough capacity to implement them.

Goundar said the funding would eventually appear in Fiji’s appropriation and budget books once individual projects are ready for implementation.