Posted by 
The Solomon Islands government has announced it will borrow $95.5 million from China's state-owned Exim Bank to fund a broadband infrastructure project, the first time the Pacific nation has taken a loan from the superpower.
Exim is one of three financial institutions authorised by the Chinese government to implement state policy.
The project will see 161 telecommunication towers built with Chinese companies Huawei and China Harbour Engineering Company for the Solomon Islands National Broadband Infrastructure Project.
It shows ties between the two nations continue to strengthen, and comes months after the Solomons signed a security deal with China.
"This proposal will be a historical financial partnership with the People's Republic of China since the two countries established diplomatic ties in 2019 as the two countries work closely to ensure the successful implementation and operation of the project," a Solomon Islands government statement said.
The 20-year, 448.9 million yuan ($95.5 million) loan has a 1 per cent interest rate.
Citing work done by a local expert and a private consulting firm from New Zealand, the Solomon Island claims the project is "both financially viable and compatible with existing telecommunication infrastructure in the country".
Hailing the "historical" partnership, the Solomons government, which will create a new company to own the infrastructure, said the project would make enough money for the government to pay back the loan and interest within 20 years.
But according to the ABC, a KPMG review of an earlier version of the proposal, with 200 towers, "significantly overstates" the financial potential.
"The SINBIP will result in the further expansion of the STCL [Solomon Telekom Company Limited] network," the government said. "This will provide a better telecommunication coverage for our people and businesses throughout the country.
"The proposed arrangement will also provide a clear level playing to other operators like the Bemobile company services throughout the country."
It aims to have a memorandum of understanding and funding agreement in place early next year with almost half of the towers built before the Pacific Games in November 2023.
The same KMPG review reportedly found a three-year timeframe to finish the project "does not appear realistic".
The United States, the United Kingdom, Australia and some other allies have banned Huawei from providing next-generation internet infrastructure over spying fears.
Source: 9News
