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10th June, 2021 Australia continues to help one of its closest Pacific neighbours, Tonga, to help them overcome the economic impacts of COVID-19.

On Tuesday 8 June 2021, Australia’s High Commissioner to Tonga, His Excellency Adrian Morrison, signed an Exchange of Letters with Tonga’s Minister for Finance, Honourable Tevita Lavemaau, stipulating a provision of AUD6.75 million from the Australian Government to the Government of Tonga.

Of this amount, AUD1.75 million is disbursed as part of Australia’s annual budget support contribution, upon achievements of actions in the Joint Policy Reform Matrix (JPRM). This includes the roll out Tonga’s Labour Mobility Policy Framework. The funding will also focus on reforms needed to access additional World Bank Emergency financing.

An additional AUD5 million is also provided to support the Government of Tonga (GoT) navigate the fiscal pressures of the pandemic and avoid potentially unsustainable levels of debt. This support is being provided from Australia’s Fiscal Crisis Window (FCW).

In addition to the Exchange of Letters, the High Commissioner and Minister for Finance also signed a Direct Funding Arrangement committing AUD 5.3 million to the Nuku’alofa Network Upgrade Project (NNUP). This is to support the Tonga Power Limited’s continued work in upgrading networks for safer, more reliable and climate resilient power.

This contribution to the NNUP brings Australia’s bilateral commitment to over AUD 18 million in the energy sector, including support to Outer Island Renewable Energy Project (2013-2022) and the Tonga Renewable Energy Project (2019-2023). Australia is committed to supporting the GoT meet its renewable energy targets.

“Tonga, along with the rest of the world, is beginning to plan for a world post COVID-19. Guaranteeing a strong and prosperous economy is a crucial part to this plan,” said Australian High Commissioner to Tonga, Mr Adrian Morrison.

“Australia understands the assistance and support measures needed to help rebuild Tonga’s economy beyond COVID-19 and is well placed to play an important role in helping reopen economies across the Pacific region,” he continued.

Securing a strong and diverse economy is an important step in securing Tonga’s future as it shifts its priorities to respond and recover from the economic impacts of to the COVID-19.

The JPRM is a World Bank initiative, in partnership with the Asian Development Bank, the European Union, and the New Zealand Government, that links general budget support to the GoT’s achievement of an agreed set of policy reforms articulated in the JPRM. The JPRM focuses on i) supporting fiscal resilience, ii) supporting an inclusive, modern, and accountable state; and iii) supporting a more dynamic and inclusive economy.

ENDS

Issued by the: Australian High Commission, Tonga