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Soft loans at low interest rates

SUVA, Fiji (Fijilive, February 10, 2009) – Fiji’s interim Prime Minister has told visiting Chinese Vice President Xi Jinping that Fiji is about ready to access the $US600 million dollar China Soft Loan Facility.

The interim Government plans to use the funds for priority projects proposed in its 2009 Budget such as upgrading of rural roads and maritime transportation, provision of low cost housing for squatters and fixing of water supply problems.

The loans would be at very low interest rates of around 2 per cent and terms of up to 20 years, with a grace period initially with possibilities that loans extended could later be turned into grants on application and on case by case basis.

The Chinese Premier, Wen Jiabao, during his visit to Fiji in April 2006 had announced that the People’s Republic of China has set aside $US600 million to be extended to Pacific Island Countries in the form of soft loans.

"Your Excellency, we are very close to concluding preparatory works for accessing the soft loan funding which was announced by your Premier Wen Jiabao when he visited Fiji in April 2006," Commodore Bainimarama told Xi Jinping during their meeting in Nadi on Monday.

"We are in the final stages of accessing funding under the soft loan facility for the projects we have identified for such funding."

Seizing the opportunity of the visit by the Chinese second-in-command, Commodore Bainimarama sought to better Fiji’s lot with the global powerhouse.

"China has great potential as a source of foreign direct investment for Fiji and in this regards, we are positively considering the Investment Protection Agreement which has been initiated by your authorities," he said.

"We also would like to record our deep appreciation for China granting Fiji the approved destination status to enable a greater inflow of Chinese visitors to Fiji.

"On our part, we have reciprocated by relaxing the entry requirements for Chinese visitors into Fiji and accordingly, providing them the opportunities to travel to Fiji and be issued a visa on arrival here.

"We also are appreciative of the favourable consideration provided by your relevant authorities to enable Air Pacific gain landing rights into Hong Kong.

"Our national carrier has secured the necessary airport arrival and departure timings to permit direct Nadi-Hong Kong flights within the next three months, with excellent flight connections with UK, Europe, Middle East, India, Japan and North Asia plus Shanghai and Beijing.

"Your Excellency, there is a further consideration we would like to seek from the People’s Republic of China to enable our national carrier to fully exploit tourism opportunities available for Fiji in Asia and beyond.

"In particular, our Air Services Agreement (ASA) with People’s Republic of China requires a review and updating to a more modern and expansive document. Fiji would be greatly appreciative of your kind consideration to allow consultations to begin in this regards."

Commodore Bainimarama said Chinese developmental assistance to Fiji has improved in recent years and expressed hope for further help "especially in respect of the reconstruction and rehabilitation works so necessary after the recent floods".

"Our officials no doubt will be discussing this further following the conclusion of your visit," he added.

The interim PM then highlighted the "huge potential" for further collaboration between the two countries.

"On our part, Fiji is committed to the one-China policy and is open for discussions on new possibilities for collaboration," he said.

"Essentially, we are keen to explore possibilities through discussions that would take our current level of bilateral cooperation to new heights in the form of more intensive partnerships covering economic, trade, aid, education, social and cultural issues and other related areas."

The Chinese VP and his delegation jetted into the country on Sunday night and returned about 24 hours later.

They were accorded a military guard of honour, both on arrival and departure, and a traditional welcome ceremony.

Fiji President Ratu Josefa Iloilo also met with Jinping at the Sheraton Resort where they were hosted by the interim Government.


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