TONGA TO SEEK $12 MILLION ADB LOAN FOR PROJECTS

News Release

The Legislative Assembly passed a resolution on the 6th of July 2007 to allow the Government to borrow 25 million pa’anga [US$12.3 million] from the Asian Development Bank (ADB) to fund the Nuku’alofa integrated urban development project.

The increase in economic growth over previous years has put pressure on urban areas, especially Nuku’alofa. The increase in demand for town allotments has pushed some people out to the low-lying wetlands. The growing population has put huge pressure on sanitation, roads, drainage, waste disposal and social services in Nuku’alofa. Flooding has also added to these problems, which worsens health indicators in the urban areas.

With improved services and facilities, this project will give lower income groups access to higher quality land and reduce flooding threats to the urban as well as low-lying areas.

This directly supports the ADB’s strategy for improved access to basic social services for poverty reduction. The project is directly linked to the ADB’s key strategy of support for the Government’s reform program to improve the efficiency and effectiveness of the public sector and addresses certain deteriorating social conditions through targeted interventions.

The loan will have a 32-year term with a grace period of 8 years. The interest rate will be 1 percent during the grace period and 1.5 percent thereafter. The project is estimated to be completed on 31 December 2012. The project will be implemented according to ADB guidelines and proper procurement practices.

Alleviate infrastructural problems

The ADB loan will go a long way to alleviating much of the infrastructural problems in Nuku’alofa. It is normal to expect the Talamahu market area to be flooded when it rains heavily because the drainage system is not existent. On Vuna Rd, there is a drainage system which but is not operational and most of the time you can see debris piling up caused by the blockages in the drains. This is not a pretty site for tourist and it also brings unwanted health problems. The Fanaga’uta lagoon lets of a terrible stench every time it rains due to the absence of a proper drainage and sewerage system.

This project has come at the right time and will definitely add value to the local tourism industry as well as improving the quality of life for those in the urban area especially low income earners.

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