Suva, Fiji, September 26, 2023 –The people of Fiji stand to benefit from the development of a green finance taxonomy that’s expected to pave the way for greater investment in climate-friendly projects and help drive more inclusive and sustainable economic growth.
Under an agreement announced today, the Reserve Bank of Fiji (RBF) and the International Finance Corporation (IFC), through support from the Australian Government, will work together to develop guidelines and parameters to clearly define green assets. The new taxonomy will deepen climate finance options in Fiji, encouraging 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.”
IFC, a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets, will also support RBF in integrating environmental, social and governance (ESG) standards in financial market operations and encourage adoption of these standards by businesses and financial institutions including climate risk management.
“While Fiji is one of the lowest emitters of carbon in the world, like other Pacific nations, it is bearing the brunt of the climate crisis, from rising sea levels to more frequent and more extreme weather,” said Judith Green, IFC Country Manager for Australia, New Zealand, Papua New Guinea and the Pacific Islands. “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.”
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. There will be a consultative approach to obtain input from key stakeholders in considering the design of the framework.
“Australia is pleased to support the development of the green finance taxonomy through our IFC Partnership for Fiji,” said Australia’s High Commissioner to Fiji and Special Envoy for Pacific and Regional Affairs, Ewen McDonald. “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.”
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 FJD100 million (around USD50m) with an emphasis on helping the country adapt to the changing climate. The RBF is committed to growing the market for sustainable finance and supporting green investment.
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
The RBF is the central bank of the Republic of Fiji established under the Reserve Bank of Fiji Act 1983. The principal purposes of the Bank are to regulate the issue of currency and the supply, availability, and international exchange of money, to promote monetary stability, to promote a sound financial structure, to foster credit and exchange conditions conducive to the orderly and balanced economic development of the nation and to regulate the capital markets and insurance industry.
IFC’s work in Fiji is supported by the Government of Australia under the Fiji Partnership, which aims to improve the competitiveness of the private sector and stimulate inclusive and climate-smart private investment in Fiji.
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