Fiji’s Green Bond launch sees unprecedented support

Two weeks after the launch of Fiji’s Green Bond, the Fijian Government has announced the issuance of the first bonds on 1 November after receiving overwhelming interest both among domestic and international investors.

The enthusiastic reception for this sovereign bond—the first in the Southern Hemisphere, first in an emerging economy, and just third globally after similar green bonds by the governments of France and Poland—marks a clear signal of the business community’s support for funding sustainable development in Fiji.

Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum welcomed the unprecedented level of interest in Fiji’s Green Bonds as a big win for both the Fijian people and for climate adaptation financing the world over.

“With this issuance, we’ve shown that Fiji is not only leading in climate advocacy, as President of COP23, but that we are leading the way among emerging economies in finding new, creative ways to raise climate finance. The funds from our Green Bond will help us carry out life-saving work to boost resilience across Fiji and the Fijian economy to climate impacts, and go towards climate mitigation and environmental protection programmes. We’d also like to thank our partners in the private sector for their confidence in our vision for a more resilient Fiji,” he said.

The first tranche floated FJD40 million to be offered, but the week-long tender saw an oversubscription that ballooned to more than double that amount, with FJD87.71 million subscribed. Of that total, FJD60.10 million in subscriptions were received in tenders for the offering’s 5-Year maturation, with an additional FJD27.61 million received for the 13-Year tenor. Notably, the Green Bond attracted overseas investment, the first time Fiji has ever received international investment for a FJD-denominated bond.

The participation rate recorded in the tender was extremely robust– three times the rate normally associated with Fiji Government Infrastructure Bonds. Fiji’s domestic commercial banks also showed record support, putting in a combined FJD40 million tender– the highest-ever amount subscribed by the industry. Because the tender oversubscribed, a total of FJD13.27 million was allotted to the banks. Additional local investors included insurance companies, the Fiji National Provident Fund, and the Unit Trust of Fiji, among others.

“This sizable oversubscription is a demonstrable show of confidence for the concept of sovereign green bonds—a new and innovative idea–not just in Fiji, but around the world,” said RBF Governor Ariff Ali. “With Fiji’s Green Bond, investors are diversifying their investment portfolios with sustainable development funding; far and wide, investors are seeing this not only a smart a business decision, but an ethical one.”

As advertised, only FJD20 million for each the 5-Year and 13-Year tenor was accepted, with coupon rates of 4.00% and 6.30% per annum, respectively. There will be subsequent issues in the coming months in order to raise the total targeted amount of FJD100 million.

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