World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search


US$20 Million Investment Fund For Pacific Islands

Commonwealth Secretariat


26 October 2005


A US$20 million investment fund for the Pacific Islands targeted at small and medium enterprises will be launched at the Pacific Leaders Forum in Port Moresby, Papua New Guinea, on Thursday, 27 October 2005 at 12.30 pm at the Crowne Plaza Hotel.

Commonwealth Secretary-General Don McKinnon and the Prime Minister of Papua New Guinea, Sir Michael Somare will officiate at the launch of the Kula II Fund in the presence of other leaders from the Pacific region and potential investors.

The Fund, which is the second for the Pacific, is under the umbrella of the Commonwealth Private Investment Initiative (CPII), which has established private investment funds in the four regions of the Commonwealth to support and promote commercially viable private enterprises. To date, CPII has raised over US$400 million globally from investment agencies, development banks and private investors. The Kula funds are managed by Aureos Capital. Robert Binyon, who chairs several Aureos Asia funds, will be present at the Kula II launch.

The Kula II Fund is a successor to the US$17 million Kula I set up in 1997, which is now in its final divestment phase. Kula II’s committed capital of US$20 million will cover the Pacific Islands more broadly than Kula I as its investment threshold has been lowered to cater to investments in small and medium enterprises (SMEs) in the more remote territories. The difficulty with such coverage is the cost associated with identifying suitable smaller businesses and in monitoring and adding value to investments. This problem has been overcome through technical assistance funding by some donors in the region. Commonwealth Secretariat provided support during the feasibility and pre-establishment phases of the Kula funds. This co-operative effort has unlocked investment capital from major private and public institutional investors.

Like its predecessor, Kula II is aimed at the agriculture, fisheries, transportation, mining and services industries, as well as other promising sectors of commerce. Kula II has once again won the support of the shareholders of Kula 1, which include the Asian Development Bank, CDC Group, the European Investment Bank and some local pension funds from Fiji Islands and Papua New Guinea.

Commonwealth Secretary-General Don McKinnon said the Kula funds will make a significant contribution to the development of the Pacific islands. These small island developing states are particularly disadvantaged in accessing international capital markets at reasonable cost to mobilise resources to modernise their economies.

The Secretary-General said: “I am very pleased with the creation of a new venture capital intermediary to provide risk capital that focuses on the smaller islands in the Pacific, which have faced difficulty in attracting investment although some businesses in these jurisdictions have good commercial prospects. I am confident of the business opportunities in the larger, as well as the smaller islands which have not drawn enough private sector interest despite their potential. The participation of a range of Commonwealth and non-Commonwealth investors is a testimony to the attractive prospects for both the Kula I and II funds.”

Note to Editors: The Kula Fund was established for the Pacific region in August 1997 with total committed capital of $16.9 million. The Fund has completed its investment programme, investing a total of $11.4 million in eight businesses, of which four remain. Kula is now in divestment mode and has returned $9.87 million, representing 59.1 percent of capital, to its investors. Investments have been spread across a variety of sectors, including agro-processing, fishing and fish-processing, warehouse retailing, mining-related services, printing, palm oil production, and aviation charter services. Kula is on course to make a small net positive profit in US dollar terms despite the adverse political and macroeconomic environment in investee countries.

© Scoop Media

World Headlines


University of Auckland: Low-Lying Pacific Island Has More Land Above Sea Level Than In 1943

An inhabited island in the low-lying Pacific nation of the Marshall Islands, which are thought to be at risk of being inundated by rising sea levels, has actually increased in size since 1943, scientists say. And the increase in area above sea level is likely ... More>>

APEC : Leaders Issue Kuala Lumpur Declaration

The leaders of the 21 APEC member economies issued the Kuala Lumpur Declaration following the first-ever virtual 27th APEC Economic Leaders’ Meeting chaired by Malaysian Prime Minister Muhyiddin Yassin. Convening for the first time since the ... More>>

UN: Appeals For $35 Billion To Help World’s ‘Most Vulnerable And Fragile’ In 2021

UNOCHA/HFO A family flees the violence in Idlib, Syria. (file) A record 235 million people will need humanitarian assistance and protection next year, a near- 40 per cent increase on 2020 which is “almost entirely from COVID-19”, the UN’s emergency ... More>>

OHCHR: UN Committee Issues Recommendations To Combat Racial Profiling

The Committee on the Elimination of Racial Discrimination today published its guidance to combat racial profiling, emphasizing, among other issues, the serious risk of algorithmic bias when artificial intelligence (AI) is used in law enforcement. The ... More>>