Government is now FSC loan guarantor

May 24, 2024 4:51 pm

[Source: Parliament of the Republic of Fiji/Facebook]

The Fiji Sugar Corporation has continuously been incurring net losses for the past ten years, which has resulted in the full exhaustion of the approved government guarantee limit on loans that is being utilized to improve the sugar sector.

This was highlighted by the Minister for Finance, Biman Prasad, in parliament while debating the motion to increase the government guarantee for the Fiji Sugar Corporation domestic borrowings of $75 million from August 1, 2022, to May 31, 2028, by $20.0 million and that the FSC be exempted from paying the guarantee fee.

Prasad says that the government has been guaranteeing FSC’s domestic and offshore borrowing for the past few years.

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Minister for Finance, Biman Prasad [Source: Parliament of the Republic of Fiji/Facebook]

The finance minister says that it is the government responsibility to ensure that risks are minimized so that FCS is able to function.

“FSC executed and utilized the guarantee with Bank of the South Pacific Ltd. for a loan facility of $50 million and HFC Bank for an overdraft facility of $25 million, respectively”.

Prasad says that the Ministry of Finance is working with FSC and the Ministry of Sugar to monitor the restructuring efforts to ensure any fiscal risks that might arise are properly communicated, mitigated, and managed by FSC with the government.

Opposition Member of Parliament Premlia Kumar supported the motion as she believes it will assist the sugar industry in improving its operational capabilities.

“We support the motion because we know the significance of the sugar industry to Fiji’s economy. It not only supports export reserves but also safeguards our foreign exchange.”

Charan Jeath Singh [Source: Parliament of the Republic of Fiji/Facebook]

The Minister for Sugar, Charan Jeath Singh, states that since taking office, he has been working closely with the relevant stakeholders to assist FSC with operational capacities.

“The groundwork of the coalition government is evident, and it is clear that the industry is on the path of rebuilding. The approval of this motion will be instrumental in ensuring that this recovery continues unbated. By increasing the government’s guarantee and exempting from the guarantee fees, we are providing the necessary financial support and confidence that will enable FSE to meet its commitment towards our hard-working farmers.”

The sugar minister urged members of parliament to support the motion.

Singh said that this motion is a vital component of our ongoing efforts to revitalize and sustain the sugar industry for the benefit of all Fijians.