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S.N.P.F. joins regional funds to address infrastructure gaps

Samoa National Provident Fund and other provident and pension funds are working with the International Finance Corporation to assist bridge the infrastructure investment gap in the region.

The I.F.C., which is a member of the World Bank Group, has signed an agreement with pension, provident and sovereign funds who are members of the Pacific Islands Investment Forum [PIIF] with the aim of bridging the gap.

The signing between the I.F.C. and the various pension, provident and sovereign funds which include the S.N.P.F. was announced in a press release issued by the I.F.C. on Thursday.

The I.F.C. stated in the press release that the PIIF membership plays a critical role in their local economies. Its membership collectively owns more than US$8 billion worth of assets. It is estimated that the infrastructure gap in the region amounts to US$45 billion over 12 years.

And with COVID-19 bringing a wave of unprecedented volatility across the world, a first step of the new agreement is for I.F.C. and PIIF to conduct a survey to understand the impact of the pandemic on PIIF fund members.

S.N.P.F. Chief Executive Officer, Pauli Prince Suhren, said they intend to share the results of the I.F.C.-led survey with their local contributors. 

“During times of crisis, PIIF member funds are regularly called upon to provide economic and social support across a range of areas,” he said in a statement. 

“So, we aim to share the results of this survey among our member funds as we adapt in this unprecedented environment. We’re also working with I.F.C. to help achieve our long- term vision of cross-border investment in the region, to deliver better infrastructure and services and, most importantly, better returns for the people who’re members of our funds.” 

The co-operation agreement with I.F.C. will allow PIIF – of which the S.N.P.F. is also a member – to explore co-investment opportunities with I.F.C. and also opportunities for funds to go beyond their own borders and invest in other countries’ industries, services and infrastructure.

I.F.C. Country Manager [Australia, New Zealand, Papua New Guinea and the Pacific Islands], Thomas Jacobs, said the funds continue to play a dominant role in their respective countries’ financial systems.

“In the Pacific these funds play a dominant role in financial systems and are major employers, so it’s important not only to assess the impact now of COVID-19, but also to look to the future and work on ways to allow for greater co-investments across the Pacific,” Mr Jacobs said. “The interest of the members of the funds is paramount, and that future investments are low cost with the right level of risk and suitable to the needs of pension fund members.”

While co-investment brings two major benefits to PIIF members of improved infrastructure and services and better returns, some funds will first have to address their regulatory bottlenecks that prevent them from investing overseas.

“We believe that first by gathering and sharing information in this manner, the Pacific region’s funds will bolster their approach to handling the economic impacts of the outbreak,” said the I.F.C. Senior Financial Sector Specialist, Aaron Levine said. “At the same time, we have the opportunity to use our global expertise to help PIIF member funds achieve their long-term goal of branching out across the Pacific and delivering better returns for workers.”

Working with the World Bank Group’s Finance, Competitiveness & Innovation Global Practice has enabled PIIF to benefit from global experience and best practices.

“We are working with PIIF to develop the most appropriate co-investment platform option for the Pacific,” said Ekaterina M. Gratcheva, Lead Financial Officer. “We are drawing on global experience and knowledge to bring the best approaches.”

The assistance to PIIF is supported by the Pacific Partnership, through which the governments of Australia, New Zealand and I.F.C. work to stimulate the private sector and reduce poverty.

PIIF members are: Cook Islands Superannuation Fund, Fiji National Provident Fund, Kiribati National Fund, Nauru Sovereign Wealth Fund, NZ SuperFund, Ngati Awa Growth Holdings, Nambawan Super (PNG), NASFUND (PNG), Samoa National Provident Fund, Solomon Islands National Provident Fund, Tokelau Trust Fund, Tonga Retirement Fund, Tonga Retirement Fund Board, Tuvalu National Provident Fund, Tuvalu Trust Fund, Unit Trust of Fiji, Unit Trust of Samoa, Vanuatu National Provident Fund.

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