MINISTER of Finance and Treasury, Hon Harry Kuma 19th April revealed that the Government, on the 9th April, 2020, issued the first ever Solomon Islands Government COVID-19 Domestic Development Bond, up-to SBD $120 million, to interested buyers of the Bond.
According to the Minister, there are up to 5 domestic interested buyers of COVID-19 Development Bonds, but the Ministry will negotiate with only 3 prospective buyers.
The Minister also explained that the COVID-19 Domestic Development Bond will be negotiated according to the Government’s borrowing guidelines and process, and will also include within the 2020 Annual Borrowing Limit or ABL.
The Minister also revealed that the COVID-19 Development Bonds was issued as part of the Government’s strategy to mobilize resources to fund the Government’s COVID-19 Economic Stimulus Package that will be put to cabinet later this week.
Key usage of the COVID-19 Bond will be directed towards major infrastructures, which include bridges, roads and wharves that connect key productive, and resource sectors hub as well as infrastructure that connect to essential public services like health and education.
Furthermore, it was revealed that part of the COVID-19 Bond will be used as equity injection into ICSI’s portfolio company like the Soltuna, KFPL, and Solomon Airlines as well as towards specific investments and products of the Development Bank of Solomon Islands.
According to the Minister, the COVID-19 Domestic Bond is like killing 2 birds with 1 stone analogy, because whilst these investments are act as stimulus spending into the local economy because of the anticipation on engagement of local contractors, the investments also plays an important role as catalyst towards medium to long term economic growth in Solomon Islands.
Minister Kuma further revealed that the COVID-19 Development Bond transaction will send a positive signal to external investors noting that our financial and economic environment remains resilient, despite the social and economic fallout as the result of COVID-19 pandemic.
On this note, the Minister expressed the Government’s gratitude to the prospective buyers of the COVID-19 Domestic Development Bond, of their confidence to the Government effort to ensure that economic activities and growth remain vibrant, despite the challenges that overshadow the country due to COVID-19 pandemic.