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BASE in partnership with Oxfam in the Pacific, has been awarded a feasibility study grant, for the development of a remittance-based financing vehicle that aims to advance climate action and sustainable infrastructure development in the Pacific Islands. This grant funding has been awarded through Convergence’s Indo-Pacific Design Funding Window, funded by the Australian Government.
“As the world faces a severe climate crisis, we need to accelerate solutions that will equip countries most exposed to its shocks with the right tools and infrastructure. This feasibility study is set out to do just that, building on BASE’s previously implemented remittance-based financing mechanisms in Haiti and Bolivia, which benefited more than 400,000 people in those countries,” states Robert van Zwieten, Managing Director for the Asia-Pacific region at Convergence. BASE’s work with remittances complements very well with the efforts of Oxfam in cash-transfer in the Pacific region as Oxfam has been actively pursuing innovative interventions that promotes community-based resilience in the region especially during times of disasters. In Vanuatu, Oxfam in the Pacific has successfully implemented a National Cash transfer program following the Ambae Volcano incident in 2018, distributing USD 1.7 million in cash vouchers using block-chain technology.
A sizeable portion of the population in the Pacific Islands live and work along its coastlines, exposed to climate events such as land erosion, flooding, and cyclones. Frequent natural disasters in these under-resourced small island states result in damages worth millions of dollars. Much of the physical damage and associated social and economic devastation can be avoided by investing in sustainable and resilient infrastructure. While remittances are an important source of income for people in the Pacific Islands, the potential for remittances to enhance climate resilience has not yet been realised in the region.
Convergence’s feasibility grant will enable BASE, in partnership with Oxfam in the Pacific, to explore the feasibility of a remittance-based financing mechanism for micro-infrastructure solutions such as roof strappings, solar panels and batteries, and solar heaters and water tanks, for enhanced household resiliency. This mechanism is expected to mobilise impact investors, local financial institutions, migrant workers in Australia and New Zealand and remittance recipients in the Pacific Islands, many of whom will be women. After an initial pilot, the mechanism is expected to be self-sustaining, envisaged to mobilise USD 35 million into the local economy, and impact 9,000 households.
“The aim of our program is to design a locally relevant and self-sustaining finance vehicle that enables migrant workers from Pacific Island Countries who live and work abroad to channel part of their remittance payments towards sustainable and climate resilient infrastructure investments for their families and communities at home,” says Jasmine Neve, Deputy Director at BASE.
The feasibility of this mechanism will be explored initially in Samoa, Tonga, Fiji, Vanuatu and Kiribati, and three countries will be shortlisted for the final feasibility study. Initial work will include detailed research on targeted countries, stakeholder consultations to assess barriers, in-depth gender analysis to understand the impact potential to advance gender equality in the region, and a vehicle structure customised to the identified countries.