MCC and SIG Sign USD2.3M Threshold Program Grant Agreement Modification to Boost Tourism Investment in Solomon Islands

MCC and SIG Sign USD2.3M Threshold Program Grant Agreement Modification to Boost Tourism Investment in Solomon Islands

 

The Millennium Challenge Corporation (MCC) and the Solomon Islands Government (SIG) have signed a modification to the Threshold Program Grant Agreement, a move that will further enhance tourism investment and economic development in Solomon Islands through allowing more flexible usage of USD$2.3 million (SBD19.2 million) contained in the Grant Agreement.

Minister for the Ministry of National Planning and Development Coordination (MNPDC), Hon. Rexon Ramofafia signed the grant agreement modification on behalf of SIG at the MCC headquarters in Washington DC on July 23.

The Grant Agreement Modification focuses on adjusting the Program Description related to the Investment Facilitation Sub-Activity under the Accessing Land for Tourism Investment Facilitation (ALTIF) Project.

In a statement, MNPDC says the intent of this modification is to allow for broader support to tourism investment in Solomon Islands through the use of existing blended finance funding under the ALTIF Project.

Key points of the modification include:

Expanded Objective: The Investment Facilitation Sub-Activity now aims at simplifying the investment process to facilitate tourism investment through Invest Solomons, a division of the Ministry of Commerce, Industries, Labour and Immigration (MCILI).

Enhanced Support: The agreement states that Grant funding shall also support the use of blended finance instruments to reduce risk associated with tourism investment in Solomon Islands.” These instruments may include “credit enhancements, interest rate buy-downs, closing costs, direct grants, viability gap funding targeted to infrastructure associated with sites identified through the tourism investment viability screening process utilized in the Land Sub-Activity, and other instruments that mitigate identified risks.

Broader Scope: Recognizing industry-wide challenges, the modification allows that blended finance funds may also be used to support improvement of shared services (e.g., transportation, transportation facilities, transportation-related services) and may otherwise support actions necessary to improve the investor experience and attract or enhance new tourism investment to Solomon Islands.

Tourism Investment Task Force: The agreement supports building the Government’s capacity for investment facilitation by supporting the establishment of a task force (the ‘Tourism Investment Task Force.’).

This task force will “improve coordination and decision making among disparate government institutions and provide appropriate responses on investment, tax, and licensing issues required to realize an investment and smooth investor interactions with the Government.”

Investment Promotion Process: The Government has committed that registered land parcels approved for investment promotion identified as part of this Sub-Activity are marketed to investors solely through the agreed upon investment facilitation process.

This modification also represents a significant step in strengthening the partnership between MCC and the Government of Solomon Islands through the Solomon Islands Threshold Program (SITHP).

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