Solomon Islands secures US$100m China loan to build Huawei mobile towers

09 September 2022

Solomon Islands has secured a US$100m loan from China to build 161 mobile communication towers, to be erected and supplied by Chinese tech giant Huawei.
The move was celebrated by the Pacific nation’s government as “a historical financial partnership” between the two countries that would “work closely to ensure the successful implementation … of the project”.

The loan, the island nation’s first from Beijing since it switched diplomatic allegiance from Taiwan to China in 2019, will come from the Exim Bank of China, with a 1% interest rate.

Huawei has become something of a global pariah amid security concerns over its links to the ruling Chinese communist government. In 2019, the US issued a ban on sharing technology with Huawei. In 2020, the British government issued an order that telecoms providers would have to stop installing Huawei equipment in the country’s 5G network.

The Solomon Islands government has announced it hopes to install 48% of the infrastructure by November 2023 when it is scheduled to host the Pacific Games, a flagship policy for the government led by prime minister Manasseh Sogavare.

“This will help people in rural areas to enjoy the Games, even if they don’t come to Honiara,” said McKinnie Dentana, permanent secretary of the ministry of finance.

According to the Solomon Islands, the 161 Huawei towers will be owned by another company on behalf of the government and that it is in discussions with STCL, which it said will be a key operating partner in this undertaking. It hopes to repay the loan within 11 years, despite the concessional loan repayment being for 20 years.

“The independent review of the (Solomon Islands National Broadband Infrastructure Project) showed that the project would generate sufficient revenues for the government to fully repay both the principal loan amount and interest costs within the loan period,” the government said in a statement.