A project to streamline climate friendly projects in Fiji is expected to channel more investment finance into the space.
The project is an initiative by the Reserve Bank of Fiji (RBF) in partnership with the International Finance Corporation (IFC), supported by the Australian Government.
In a memorandum of understanding signed this week, the parties will work together to develop guidelines and parameters to clearly define green assets.
The new taxonomy will deepen climate finance options in Fiji, they said, and help encourage more lending and investment to support the country’s climate mitigation and adaptation goals, and create green jobs.
“A well-defined and structured Fijian taxonomy will enable the financial sector to channel private sector capital towards climate-related projects which will contribute to achieving national environmental objectives,” said RBF Governor Ariff Ali.
“That makes this a critical step towards strengthening Fiji’s financial resilience, including the stability of the financial system in the face of the growing challenge from climate change,” Mr Ali said.
IFC country manager for Australia, New Zealand, Papua New Guinea and the Pacific Islands Judith Green said while Fiji is one of the lowest emitters of carbon in the world, it is, like other Pacific nations, bearing the brunt of the climate crisis, from rising sea levels to more frequent and more extreme weather.
“A robust private sector and deeper climate finance markets are crucial to supporting Fiji’s adaptation efforts and unlocking a sustainable future for the people of Fiji. I commend RBF’s commitment to promoting sustainable finance practices,” said Ms Green.
Australia’s High Commissioner to Fiji and Special Envoy for Pacific and Regional Affairs, Ewen McDonald said Australia was pleased to support the development of the green finance taxonomy through the partnership.
“Expanding climate finance options in Fiji will pave the way for greater investment in sustainable infrastructure and support green jobs. I congratulate the RBF for launching this important project,” Mr McDonald said.
The introduction of a green taxonomy and ESG standards is aligned with the Fiji government’s aim of increasing investments in projects that champion climate resilience and environmental sustainability, as well as achieving net-zero national emissions by 2050.
Fiji has been a strong advocate for climate change and was among the first nations in the world to issue a sovereign green bond in 2017.
The bond raised $100 million with an emphasis on helping the country adapt to the changing climate.
RBF said it was committed to growing the market for sustainable finance and supporting green investment.
“There will be a consultative approach to obtain input from key stakeholders in considering the design of the framework.”
