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WASHINGTON, D.C., Jan.7—The Pacific Islands Investment Fund (PIIF) -- established in 1995 by the International Finance Corporation (IFC) to provide financing for small and medium enterprises in the Pacific Island countries -- has invested US$300,000 in Masurina Limited, a fishing project in Papua New Guinea’s Milne Bay Province to develop its substantial marine resources in an environmentally sustainable manner that will maximize benefits to the community. Masurina Limited is a medium-sized public company with about 500 shareholders, most of whom are residents of Milne Bay.
The project will involve catching, processing, and export of prawns, tuna, and other fish, and will also include the purchase and outfitting of two longline fishing vessels; the construction and sale to local fishing groups of smaller fishing vessels; and the construction of shore-based processing facilities. Tuna longlining involves the catching of large (over 25 kg) high-value tunas, especially bigeye and yellow fin (the two most valuable tropical tuna species), which can be exported in fresh chilled form for sale as sashimi in overseas markets. The South Pacific Project Facility (SPPF), based in Sydney, Australia, has provided technical assistance and advisory services to Masurina Limited, including the sponsoring of a fishing industry workshop on tuna longlining.
Most of the tuna will be sold to the Japanese sashimi market. The project is expected to increase employment and economic activity in Milne Bay province. Annual foreign exchange earnings are likely to grow to about US$565,000.
PIIF was set up as a US$2 million risk capital fund on a two-year pilot basis to invest equity capital in small projects with costs between US$500,000 and US$5 million. It also assists investors in mobilizing financing from local sources. PIIF invests in projects that are commercially viable, have a positive developmental impact, and are based in IFC's nine member countries in the Pacific islands -- Fiji, Federated States of Micronesia, Kiribati, Marshall Islands, Papua New Guinea, Solomon Islands, Tonga, Vanuatu, and Western Samoa. In November 1995, PIIF approved its first investment -- a US$167,000 preference share investment -- in the Sinalei Reef Resort in Western Samoa.
In addition to Masurina Limited, several other PIIF investments are in advanced stages of evaluation, including an eco-tourism project in Papua New Guinea, a banking project in the Marshall Islands, a fisheries project in Fiji, a private hospital in Western Samoa, and an agribusiness project, also in Western Samoa.
Mr. Harold Rosen, Divisional Manager in IFC’s Asia Department said, "In addition to IFC's own direct investments in the region, the Corporation has developed an integrated approach to supporting private sector development in the Pacific Island countries through the combined efforts of PIIF, SPPF, and FIAS (the Foreign Investment Advisory Service). PIIF works closely with SPPF, which brings to IFC financing proposals arising from its technical assistance work. In so doing, IFC is leveraging SPPF’s efforts and helping it raise project financing for private businesses in the Pacific.”
SPPF, which is managed by IFC, was established in 1990 to provide assistance to small and medium enterprises to evaluate and structure investment opportunities, prepare business plans, and obtain project financing. SPPF, which does not invest in projects, is funded by the Governments of Australia, Fiji, Japan, New Zealand, and Western Samoa, as well as by IFC.
IFC provides another service -- FIAS -- that is designed to promote private sector development in the region. A joint venture between IFC and the World Bank, FIAS helps developing countries structure laws, promotional strategies, and institutional arrangements to stimulate foreign direct investment. FIAS's office in Sydney, Australia, is the focal point for managing its work in the Asia and Pacific region.
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
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