Pacific Regional—Australian Infrastructure Financing Facility for the Pacific

Stepping-up Australia's Pacific engagement

Prime Minister Morrison announced on 8 November the Government's decision to establish an Australian Infrastructure Financing Facility for the Pacific (AIFFP).

This $2 billion infrastructure initiative will significantly boost Australia's support for infrastructure development in Pacific countries and Timor Leste. It will use grant funding combined with loans to support the development of high priority infrastructure.

The Pacific region is estimated to need US$3.1 billion in investment per year to 2030. As a partner and friend, Australia has a long track record of supporting critical infrastructure in the Pacific region. For many years, the Australian Aid program has worked to build the capacity of Pacific Governments to construct and maintain critical infrastructure. This new initiative is the next step for our assistance to this sector.

Designing the AIFFP

The AIFFP, to be managed by the Department of Foreign Affairs and Trade (DFAT), will be operational by July 2019. The AIFFP will avoid unsustainable debt burdens, meet genuine needs and uphold robust standards so that investments deliver long-term benefits.

Australia is engaging closely with governments across the Pacific in the design process to ensure the new facility supports the development priorities of Pacific countries. We will work with our Pacific partners to identify projects that will support transformative and sustainable economic growth

We are undertaking a design process, to develop the detailed operating procedures for the AIFFP prior to its launch. A country's overall debt sustainability will be a key consideration in accessing the AIFFP and will help determine the appropriate amount of concessionality that should be applied to individual projects through the AIFFP's grant component.

DFAT will work closely with Efic and other Australia Government agencies to deliver the AIFFP. DFAT will also bring in detailed expertise from the finance industry where appropriate.

The AIFFP will invest in high priority infrastructure across the Pacific, including in areas such as telecommunications, energy, transport, water and other essential infrastructure. This list is not exhaustive.

The AIFFP will look for opportunities to work with bilateral and multilateral partners and the private sector.

For further information, please contact the design team

Last Updated: 10 January 2019