Listen to the powerful story of resilience and transformation in Vatani village, Fiji, where access to clean water, made possible by an innovative sovereign green bond, has redefined daily life. Join us as we delve into the journey of some of Fiji’s citizens who have benefited from this groundbreaking initiative. Discover how the first sovereign green bond issued by an emerging market, backed by the IFC and World Bank, is creating hope, improving public health, and showcasing Fiji’s pioneering role in addressing climate change.
Transcript
Caitriona Palmer: In the village of Vatani, Fiji, as dawn breaks over a watery horizon, Lemba Sekoula is tidying up her house after breakfast.
[Pause to allow audio to linger].
A mother-of-two, who works as a community health worker, Lemba has just waved her daughters off to school.
Now, before heading out to visit patients in the village, Lemba is washing dishes while she chats with her elderly mother-in-law.
[Pause to allow audio to linger].
Until recently, Lemba did not have running water in her house.
The clean, fresh water that now pours from the tap in her kitchen is a recent development, and one that originates from an unlikely source: a financial instrument, known as a sovereign green bond.
[Audio fades]
Issued in 2017 by the government of Fiji, the proceeds of that green bond are providing tens of thousands of people like Lemba with water harvesting tanks, helping improve access to clean water for vulnerable communities across Fiji’s islands.
This sovereign green bond – the first ever issued by an emerging economy – allows the government of Fiji to raise money for projects with environmental benefits, primarily projects that address climate change mitigation and adaption.
Outside her house, Lemba points to a large, rotund olive-green tank that collects rainwater, drop by precious drop. She explains how the tank works.
Lemba Sekoula: “Our water tank feeds from the rainwater. We prepare our gutters around the house, as you can see around this house, and when the rain comes down, it goes through to our water tanks.
So we have to put some netting in the mouth of the water tank just to stop the dirt going down to the water tanks and the mosquitos breeding there. Then to collect our water. Then we’ve got our pipe down there. So, whenever we want to use it, we can use the tap anytime. Just after that we close the tap back.”
[sound of waves meeting the beach]
Caitriona: Located nearly 2,000 miles east of Australia, Fiji is highly susceptible to the impacts of climate change. Rising sea levels are swallowing the country’s coastline while severe cyclones routinely make landfall.
[sound of waves meeting the beach]
As is the case with most small island developing states, Fiji’s poorest residents are the most severely impacted by the changing weather.
Ariff Ali is the Governor of the Reserve Bank of Fiji, the country’s central bank. The son of a local fisherman, Ali knows personally how climate change can alter a family’s life in an instant.
Ariff Ali: “The cyclone season starts in November, ends in ends in April. Children are unable to go to school because the roads of the rivers are flooded, the bridges. You are unable to close the bridges. It impacts farmers, because really the crops are affected. It affects government because tourists are unable to come to Fiji or leave Fiji, and therefore it affects the economy, because we are unable to, you know, maximize on our economic productivity.”
Caitriona: In 2017, this first-hand experience inspired Governor Ali to come up with an ambitious proposal: to help Fiji become the first-ever emerging market to issue a sovereign green bond.
While Ali and his colleagues at the Reserve Bank of Fiji had the mandate to raise funds for a green bond, they lacked technical expertise. That’s when IFC and the World Bank stepped in.
Sameer Chand: “When the governor told us about their plans, we immediately mobilized a team to offer our help.”
Caitriona: That’s Sameer Chand, an operations officer for IFC based in Suva, the capital of Fiji.
A Fijian citizen Sameer grew up in a village just a few miles down the road from Governor Ali. When the Reserve Bank of Fiji approached IFC looking for technical assistance, Sameer knew exactly what to do.
Sameer: “By that stage, IFC had been helping clients through its Green Bond Program for several years. Our role as a technical advisor ranged from pre-issuance considerations like outlining the purpose of the sovereign green bond and assisting in the identification of eligible projects. Preparations included development of a policy framework and governance structure. The actual issuance focused on raising awareness. And finally, post issuance involved guidance on monitoring and reporting structures.
For me personally, as a Fijian, it was a wonderful opportunity to be part of this innovative issuance. The government of Fiji had the option of going to any of the multilateral development partners, but they chose IFC and World Bank Group because of our unique expertise and the fact that we ensured a process that was aligned to Fijian context including having locals like me working with the key counterparts.”
[the Fijian drums being played at the London Stock Exchange]
Caitriona: In April 2018, against the pulsating staccato of the Lali – the traditional drums of Fijian warriors – Fiji’s sovereign green bond was traded on the London Stock Exchange.
This landmark moment was proof to Governor Arrif Ali, that all climate-vulnerable nations, big and small, have a role to play in facilitating climate solutions.
Ariff: “For Fiji to issue a green bond, the first developing nation, means that we are punching well above our weight…
I am glad to see that over the last ten years or so, there have been so many other countries, particularly emerging countries, issuing green bonds.”
[sounds of morning bird song and children playing by the green pool]
Caitriona: Back in Vatani village, beneath the shade of a magnificent mango tree, children play by an emerald-green pool, a sacred body of water that has anchored the village for generations.
Positioned around the pool, like satellites, are small houses, many of which are connected to squat, round water harvesting tanks, capable of holding two and a half thousand gallons of rainwater.
Before the water harvesting tanks came to Vatani village in 2020, the residents had to travel long distances by canoe to petition a local hotel for fresh water. The burden was heaviest on women, says Lemba Sekoula.
Lemba: “….Before water came into this village, many of us women, we have to keep worrying about what is going to be fed, feed in the family, and mainly water. So we have to collect buckets containers in order to go far to the mainland or to the bushes, just to get water from there. And when we want to wash our clothes, we have to go. It took us the whole day to go very far wash our clothes from there….”
Caitriona: Now, thanks to the water harvesting tanks, everyday scenes of life anchored in fresh, clean water are evident everywhere across the village.
Clothes lines, laden with clean laundry, flutter in the ocean breeze. Children dip their heads beneath the flow of newly installed water pipes to quench their thirst. An elderly man rinses rice beneath the steady flow of water from a tank.
The impact on public health was immediate, says Lemba. As the village community health worker, the first difference that she noticed was a drop in the number of villagers reporting illness.
Lemba: “Before the water tanks came into our village, plenty of us got fevers and skin diseases, like scabies in children and ringworm in elders.
But when the water came into the village, our skin got brighter and cleaner.”
Caitriona: The benefit of Fiji’s sovereign green bond is so real, Lemba says, she can almost taste it.
Lemba: “The water tanks make life easy. Just go to the kitchen, get the water. That’s what water does for us. It brings changes to the village.
Water means life to all of us.”
Caitriona: If you enjoyed this episode of IFC audio stories, please share it with others. For more on IFC’s work in development finance, or to learn more about our work on green bonds in Fiji, please visit IFC.ORG.
IFC’s work in Fiji on green bonds was also supported by the government of Australia.
This audio story was produced by Camryn Billett, with sound by Armando Gallardo. The story was written by me, Caitriona Palmer.