WASHINGTON, D.C., Feb. 3-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$350,000 Yen equivalent in Solander Pacific (Fiji) Limited, a fishing company based in Suva, Fiji, to expand Solander's tuna longline operation in Fiji. The expansion will allow Solander Pacific to fund and purchase an additional vessel, thus allowing the company to continue fishing the substantial marine resources in an environmentally sustainable manner that will maximize benefits to the community.
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.
Most of the tuna will be sold to the Japanese sashimi market. The project is expected to increase employment and economic activity in the Suva area. The company's annual foreign exchange earnings are likely to grow to about US$4.5 million.
Mr. Harold Rosen, Manager in IFC's Asia Department said, "As a result of this investment and by improving fishing efficiencies, Solander will be able to increase its exports to about US$4.5 million per year in an environmentally friendly manner, as the region's tuna stocks are well above sustainable levels."
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. PIIF's second investment was a US$300,000 loan to Masurina Limited, a fisheries project in Papua New Guinea.
In addition to Solander Pacific (Fiji) 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 private hospital in Western Samoa; and an agribusiness project, also in Western Samoa.
Mr. Rosen added, "Besides 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.
