American Samoa Governor Looks To Equity Market To Fund Development

New Territorial Bank could provide incentives for investment

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, Feb. 4, 2017) – The Lolo Administration is looking at the equity market to fund future economic development while the government owned Territorial Bank of American Samoa could be designated for a federal program, which provides incentives for those who want to invest in the territory.

This is the latest revelation by Commerce Department Acting Director Keniseli Lafaele during his economic development presentation to the Chamber of Commerce last Wednesday night where he also announced that ASG’s federally funded State Small Business Credit Initiative (SSBCI) program is now in place.

In his presentation dealing with access to capital, Lafaele says, “we cannot develop without money and access to the capital.”

One such example of such capital is found through the SSBCI program, which for American Samoa is called the American Samoa Venture Fund, which Lafaele said is “now online.” The government had experienced some difficulties in getting the program off the ground in the past couple of years “and now we’ve got our program together.”

He said the fund manager is the local attorney Marshall Ashley and DOC staffer Mike McDonald is attached to the SSBCI program. Additionally, the fund adviser is Andy Moss. Lafaele shareed similar information during last Friday’s cabinet meeting, where he said the program is “now in place.”

In an email over the weekend, Lafaele explained further that the fund’s adviser is in Westport, Connecticut based Bluewater Associates, whose owner and managing director is Andy Moss, who is also affiliated with the NYU Entrepreneurship Institute of New York University.

Formerly of Microsoft as senior director of its Technology Policy, Moss is an experienced venture capitalist. At Microsoft (1990-2007), he was involved in building from the ground up several companies including Microsoft Consulting Services in 1990, Windows Plus in 2001, and Windows Division in 2007.

“The US Treasury would not have approved our modified SSBCI program without an experienced venture capitalist,” Lafaele said. “We are very fortunate that Andy Moss of Bluewater Associates accepted our plea to join our SSBCI team.”

“We are hopeful that this relation will grow a viable venture fund program for American Samoa or a mentoring program involving the NYU Entrepreneurship Institute,” he added.

One project ASG have already identified for use of the SSBCI funds is the construction of the super alia for local owners, wanting this new type of vessel.

The local SSBCI program information is available on DOC website www.doc.as.

Of the total $10.5 million awarded in 2012 (during the Togiola Administration) to American Samoa for the local SSBCI program, only $576,178 has been used for administrative service costs, according to the latest SSBCI quarterly report release Jan. 10 this year.

Lafaele said that in due time, TBAS board and management will talk with the Chamber about the various services it offers to others in the future as TBAS is another source of access to capital.

Another area of access to capital is through “public-private partnership” which is “something we’re starting to look into, as an avenue to get private equity from the US equity market” in addition to the American Samoa Economic Development Authority issued bonds that ASG has right now, according to Lafaele.

He said the governor believes that it’s time that American Samoa change “the way we think of the development” because in the past “we’ve been relying on federal funds.”

“We’re moving on to test the equity market in the states and that is getting investors to buy shares of public private partnership in the territory. We will talk more about those when we get into the specific projects that we’re working on,” he said.

Lafaele also said that there’s an opportunity for TBAS — when it has a routing number and is FDIC insured, in maybe two to three years — to apply to the US Treasury Department for a designation called CFDI — Community Development Financial Institution.

“When we get that designation, then TBAS will have the opportunity to give out incentives, like the new market tax breaks,” said Lafaele, who is also a board member of the bank. “This is a very good incentive to entice US companies to open shop here and invest here. In return our TBAS can give them a new market tax credit, which is given to companies who invest in low income areas like American Samoa.”

The CDFI Fund was created to expand the availability of credit, investment capital, and financial services in distressed urban and rural communities, according to the US Treasury website. (See www.cdfifund.gov for more details.)

Other sources of capital for economic development cited by Lafaele, is the federal EB-5 Immigrant Investor Program, the Development Bank of American Samoa and federal grant programs, such as the US Department of Agriculture Rural Development loan program.

The Samoa News
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