Fiji and Japan have signed an exchange of notes for a stand-by loan to support post-disaster recovery and rehabilitation in an effort toward strengthening disaster preparedness and recovery efforts.

The agreement was formalized today by Deputy Prime Minister and Finance Minister, Biman Prasad, and Japanese Ambassador to Fiji Rokuichiro Michii.

The stand-by loan facility is designed to meet Fiji’s financial needs during the reconstruction period following natural disasters.

Deputy Prime Minister Prasad emphasized the importance of disaster preparedness, highlighting the severe impact natural disasters can have on Fiji’s economy and infrastructure.

He say the financing facility will only be utilized in the event of a natural disaster and after the Cabinet approves or declares a state of natural disaster.

“It is important for us as a country where we hope and pray that we don’t get hit by a devastating cyclone, drought, and flood. It’s always good to be prepared and therefore, because if we are not prepared and if we are not putting aside financing facility, not only from our donors and our development partners, but also as part of our budget, we would have great difficulty and the damage and the rehabilitation could take a much longer period and could be much more pronounced.”

The loan facility comes with a 40-year term, including a 10-year grace period, and carries an interest rate of 0.4% per annum.

Ambassador Michii expressed Japan’s commitment to supporting Fiji’s disaster resilience and recovery strategies.

“We all know that both in Japan and Fiji, we are entering the time of the cyclone and all these seasons. And this is a very timely sort of signing of the relevant agreement. Now, this stand-by loan that we call for disaster recovery and rehabilitation is a type of facility which has rapid deployable funding to Fiji equivalent to 82 million Fijian dollars made available at an extremely well-adapted concessional rate, interest rate, tenure and grace period.”

He says the signing marks the first of several projects to be formalized in the coming weeks, collectively amounting to $133 million.

This includes improvements to aviation safety facilities and fisheries research.