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The Cook Islands delegation has come away from talks with the European Investment Bank confident that the institution will lend for wide ranging infrastructure projects at concessional rates.
Led by Finance Minister Sir Terepai Maoate, the delegation met with senior directors of EIB in Sydney earlier this week to discuss a multi-purpose loan.
EIB has indicated strong support for financial assistance to upgrade the airport terminal on Rarotonga to required international standards.
This includes funding water and sanitation developments needed in the Cook Islands, especially where environmental impacts can be significant. It is likely the Rarotonga Apopo and Aitutaki Apopo infrastructure plans will be prioritised in a multi-purpose loan.
EIB head of the Pacific Region, Jean-Phillipe de Jong has indicated funding to support alternative energy prospects to minimize effects of climate change would also be considered favourably by EIB and attract even lower interest rates – around 3.5%.
“In fact, the Bank’s officials said they would be willing to look at any project that we may put forward to them, I got the overall impression that the meeting was very positive,” says Bank of the Cook Islands manager Unakea Kauvai who was part of the Cook Islands team.
“They want to help us, for instance instead of borrowing in Euro dollars, we would borrow in New Zealand dollars so the country is not exposed to foreign currency risks.”
Kauvai added that the Finance Minister, “spoke well, he was knowledgeable, knew exactly what he wanted (from EIB) yet was very diplomatic.”
“We came away knowing that EIB are very supportive of our projects and would be keen to extend financial assistance to the Cook Islands.”
EIB has also approved a $NZ5 million facility to BCI for private sector initiatives – repayments will be spread over 15 years. Ongoing discussions will involve settling the terms and conditions of the loan – the first facility BCI has obtained from EIB. BCI can no longer obtain concessionary loans for its lending operations from ADB due to the country’s high per capita income rating. The Banks’ existing loan with ADB is almost paid off, confirmed Kauvai.
“We are pushing for government to guarantee the EIB loan, subject to that guarantee, the loan would be obtained at five percent interest, or lower due to the improvement of the country’s Standard & Poors rating.”
He says this would enable BCI to keep lending rates to a minimum.
Also representing the EIB were David Crush, head of the Caribbean Pacific Division of ACP-IF Department of EIB and Technical Adviser Nigel Hall.
After travelling for 30 hours, Sir Terepai is now in Madrid for the ADB meeting with Financial Secretary Sholan Ivaiti and Treasury Manager Priscilla Maruariki.
Source: Office of the Deputy Prime Minister |
