Fiji: Sustainable and Resilient Growth Program (Subprogram 2)

Fiji: Sustainable and Resilient Growth Program (Subprogram 2)

SUMMARY

STATUS: Proposed
MEMBER: Fiji
SECTOR: Multi-sector
E&S CATEGORY: Category C
PROJECT NUMBER: 001056

FINANCING

PROPOSED FUNDING AMOUNT: USD20 million
FINANCING TYPE: Sovereign

TIMELINE

CONCEPT REVIEW: May 22, 2026

OBJECTIVE

To support Fiji in implementing policy and institutional reforms to strengthen climate and disaster resilience and support more sustainable, climate-resilient growth.

DESCRIPTION

Fiji is highly exposed to climate change and natural disasters, which affect infrastructure, public finances, service delivery, and communities, while limited fiscal space and institutional capacity constrain resilience-building investment. The Program is a climate policy-based financing operation to be co-financed with ADB as lead co-financier under Subprogram 2 of the Sustainable and Resilient Growth Program. Among the policy actions proposed under ADB’s program, AIIB financing will focus on those supporting climate and disaster resilience reforms.

The Program is expected to support policy actions to: (i) strengthen water sector governance through national policies on water resource management, sanitation, and wastewater, together with utility-level environmental and social management arrangements; (ii) integrate climate risk into financial sector decision-making through climate risk reporting requirements and a green taxonomy issued by the Reserve Bank of Fiji; (iii) establish the Blue Economy Framework 2025–2035; (iv) strengthen disaster risk financing through a Disaster Risk Financing Policy and implementation plan; (v) modernize forest governance through the Forestry Act 2025; and (vi) apply a standardized multi-criteria analysis framework for prioritizing rural water supply and sanitation investments linked to sector planning and Public Sector Investment Programme processes.

These reforms are expected to strengthen Fiji’s institutional capacity to manage climate and disaster risks, improve the transparency and climate responsiveness of public investment decisions, and support better-targeted investment in resilient infrastructure and services, including for rural and vulnerable communities.

ENVIRONMENTAL AND SOCIAL INFORMATION

Applicable Policy and Categorization: The Program will be co-financed with ADB as lead co-financier. To ensure a harmonized approach to managing the Program’s environmental and social (E&S) risks and impacts, and as permitted under AIIB’s Environmental and Social Policy, ADB’s Safeguards Policy Statement (SPS) will apply to the Program in lieu of AIIB’s ESP. 

Environmental and Social Instruments. The Program supports policy and institutional reforms under Reform Area 3, covering water sector governance, financial sector climate risk integration, ocean governance, disaster risk financing, sustainable forest management, and rural water and sanitation investment prioritization. An initial Environmental and Social (ES) impact assessment matrix has been developed, based on preliminary information, to assess each policy action and will be disclosed by the Bank in a timely and appropriate manner. The ES matrix will be further refined as additional information becomes available. Overall, the prior actions are expected to generate predominantly positive environmental and social effects. 

Environmental and Social Aspects. Potential ES risks are expected to be indirect and implementation-related, including risks arising from implementing-agency capacity constraints. These risks are most relevant to prior actions on natural resource governance and rural water and sanitation investment prioritization, where implementation could affect communities with customary rights and environmentally sensitive areas if not properly managed. They are expected to be addressed through Fiji’s legal and institutional framework, including the Environment Management Act 2005, the Climate Change Act 2021, the iTaukei Land Trust Act, relevant sector legislation and regulations, and institutional arrangements to be clarified or strengthened under the supported reforms. Any material gaps identified during appraisal will be addressed through further dialogue, refinement of the E&S Matrix, and, where appropriate, additional measures in the program documentation. The Program is expected to generate positive gender effects across several prior actions, consistent with the Government’s commitment to gender equality and women’s economic empowerment under the National Development Plan. 

Program Grievance Redress Mechanism (GRM) and Monitoring Arrangement. Individuals and communities who believe that they are adversely affected by this CPBF may submit complaints to the responsible government authorities and the applicable local and/or national grievance redress mechanisms. Information on the GRMs to be used and AIIB’s Project-affected People’s Mechanism (PPM) will be disclosed in an appropriate and timely manner. Under the Program, the Ministry of Finance, Strategic Planning, National Development and Statistics (MoFSPNDS) will serve as the Program Executing Agency and primary coordinator and will consolidate reports from line ministries on the implementation of all policy actions supported by this operation for submission to AIIB and ADB in an agreed format. AIIB and ADB will jointly conduct regular policy dialogue and Program monitoring missions, as appropriate, to validate implementation progress. Further details will be discussed and determined with MoFSPNDS during appraisal.