1 May 2007

China set to give Tonga huge loan to rebuild capital

1:38 pm on 1 May 2007

China has agreed to provide financial assistance for the rebuilding of Tonga's capital, according to a statement released by the Tongan government.

80 percent of Nuku'alofa's central business district had been destroyed in last November's riot and its reconstruction is estimated to cost millions of dollars.

The Tongan Prime Minister, Dr Feleti Seveli, has just visited China.

The Tongan government is applying for a soft loan of about 55 million US dollars but our Tonga correspondent, Mateni Tapueluelu, says there are complications the government has to solve before it can announce the loan is approved.

"The critics believe the complications will have to do with the timing of paying off that loan and the conditions of the loan as well, what kind of security Tonga can offer. This will of course create certain complications they'll have to talk about for quite some time before they can agree on solutions."

Grants of about four million US dollars were also announced during the Prime Minister's visit to China, which will partly go towards the improvement of health facilities in Vava'u and Tongatapu.