Fiji’s groundbreaking Climate Change Act 2021 provides a platform for advancing the climate finance agenda says the Asian Development Bank in its Pacific Economic Monitor.
Section 71 of the act requires all public infrastructure proposals must undergo a climate risk and resilience assessment prior to securing approval.
Section 91 requires the minister for finance, in consultation with the Reserve Bank of Fiji, to develop climate finance strategies, frameworks, and approaches to support and coordinate Fiji’s ongoing access to climate finance.
The report states external funds will remain a critical part of budget financing even after the tourism industry recovers, while Fiji’s future climate financing solutions will require a different financing mix.
It says considering the high cost of building climate-resilient infrastructure and its recent country grouping reclassification in ADB, Fiji can avail grants/concessional resources to partly finance such projects.
Alternatively, it says the government can consider cost sharing mechanisms such as public–private partnerships in line with Section 43 of the act that encourages the involvement of the private sector in climate change mitigation efforts.
This may include renewable power generation.
The Pacific Economic Monitor also highlights COVID-19 pandemic has widened the government’s budget deficit because stimulus spending was needed to prop up an economy battered by the collapse in tourism.
It says with the deficit expected to further widen this year before moderating in succeeding years, it may be difficult for Fiji to mobilize non-grant resources for its climate adaptation plans.
The report states rising inflation can set back the current economic recovery phase, but the continuous rollout of vital climate-related infrastructure, supported by different financing modalities, can help sustain Fiji’s long-term growth prospects.