Pacific Resilience Facility General Manager Finau Soqo. Photo credit: RNZ Pacific.
Source: RNZ Pacific
After years of frustration trying to access climate finance, Pacific leaders are creating their own climate fund.
The Pacific Resilience Facility (PRF) treaty is set to be signed and ratified on Wednesday at the 54th Pacific Islands Forum Leaders Meeting in Honiara, after a decade in the making. It will become the Forum’s first financial institution.
The fund is going to be Pacific-led and is dedicated to improving community resilience in the region.
General Manager of PRF Finau Soqo says the idea was sparked by the difficulty of accessing the Green Climate Fund (GCF) – the world’s largest climate fund for helping developing countries adapt and limit greenhouse emissions.
“For some of our countries, we’ve had to wait for years to access it. So the response to that was, ‘Okay, instead of a club of 100 countries or 60 countries, maybe let’s have just ours, just for the Pacific’, and that’s the essence of it,” Finau says.
So far, US$162 million has been pledged, with the goal of reaching $500m by the end of 2026.
“What the PRF treaty signing on Wednesday will do is trigger a series of processes, including a call on those pledges [and] an invitation for other sovereign investors to then formally pledge to fundraise for the rest,” Finau adds.
“Our investors are dipping their toes in the water, like they’re testing, so they’re coming in with single-digit contributions.
“But of course, what we really want to do is fundraise the whole $500m before we start granting to communities so that the fund can be sustainable.”
The money from investor countries will generate a return – similar to a superannuation fund – with the return being used to finance community projects.
“Out of every dollar that we earn in income, 90 cents will be distributed, 10 cents will be reinvested so that we can grow the fund,” Finau explains.
“It needs to be sustainable. We don’t want it to just disperse everything and then it runs out of money for community projects.”
Last year, leaders endorsed Tonga as the location for the fund.
Pacific Islands Forum Chair and Tongan Prime Minister Dr ‘Aisake Eke says the Pacific does not have the luxury of time when it comes to climate change.