1. Productive investments and infrastructure investments
PARMOD ACHARY VANUATU NATIONAL PROVIDENT FUND

2. OUTLINE VNPF BACKGOUND-INSTITUTIONAL INVESTOR INVESTMENT BACKGROUND
INVESTMENTING IN INFRASTRUCTURE FOR ECONOMIC GROWTH

3. VNPF ASSET ALLOCATION
The Chart below shows the current asset allocation for Equity is still above the required range while we have improve our allocation towards cash however, for Fixed income we are little over the VNPF guidelines.

4. PERFORMANCE FOR LAST 5 YEARS BY EACH CLASSIFICATION

5. Fixed Income Portfolio 2018
The Fixed income portfolio includes the Fixed Term Deposits (61%), the Government bonds (33%) and the Foreign Currency Fixed Term Deposits (6%).

6. Interest Rates
The diagram below shoes the movement in interest rate over a 10 months period. While Credit Cooperation (Vanuatu) Limited (CCVL) is offering up to 4.5% which is the highest, CCVL’s appetite for VNPF Term Deposit is only up to VT250 million and will only rollover to keep this balance. NBV is offering a reasonable interest rate given the market situation however the VNPF exposure to NBV is quite substantial.
Average Return on Fixed Term Deposits is around 3.66%. Excess liquidity is still a threat to this portfolio as it drives down interest rates.

7. Term Deposits
In October 31, 2018 Total Term Deposits increased by 25%. With the excess liquidity in the system, Banks are offering less than 1% to 1.9% for a placement of VT200 Million for a term of 720 Days. In some cases no bids were received for tender. The Graph Below shows that Terms Deposits have increased in 2018 compared to year 2017.

8. LIQUIDITY STORY
With the excess liquidity in the system, Banks are offering between 1% to 1.9% for a placement of VT200 Million for a term of 720 Days. In some cases no bids were received for tender.

9. INFRASTURUCTURE FOCUS FOR VNPF
WHAT IS INFRASTRUCTURE
The concept of infrastructure was probably introduced for the first time by Singer (1950) who identified investment in infrastructure with investment in certain facilities that are regarded as necessary for development.
According to Hirschman (1958), infrastructure consists of those basic facilities without which primary, secondary and tertiary activities cannot function. These facilities play an important role in creating investment opportunities in other industries.

10. VANUATU INFRASTRUCTURE
Programming priority investment projects under VISIP 2015
Project
Estimated Cost
Estimated Timing
Vanuatu Urban Development Project (Phase Luganville, Port Vila)
2.1
Efate Grid Connected Solar Panels (1 MW) Project
0.523
Luganville Existing Water Supply System Rehabilitation
0.383
Brenwe Hydro Power Project (<1.2MW), Malekula
Sarakata Hydro Power Extension Project (+600KW), Santo
0.397
Grid Extension (Matevulu to Shark Bay, Port Olry, Stone Hill and Palekula), East Cost Santo
0.224
National Diagnostic Laboratory Bureau of Standards
0.56
Sealing of Tanna Roads Whitegrass to Isangel
0.467
Implementation of iGov Strategic Plan including planning of WB/ADB ICT loan package
1.881
New Government Data Centre + Backup
0.093
South Santo Coast Rehabilitation
2.39
4 Provincial capitals Water Supply System Development
0.09
Malekula East Coast Road Rehabilitation
2.931
Upgrading Airports of Category A
1.764
Domestic Jetties Construction in Every Province
0.486
Expansion of Government Broadband Network (GBN), Phase 2 (more connectivity in provincial capitals and towns)
0.187
Luganville Solid Waste Management
0.14
Rehabilitation and Extension of Luganville Intenrational Wharf 5
Upgrading Airfields of Category B
0.263
Low Voltage (LV) and Medium Voltage (MV) extension [Vila, Santo, Malekula]
1.68
Road Rehabilitation and improvement in Every Province
1.862
Rural and Feeder Roads Rehabilitation and Development in Every Province
2.31
Rural Water Supply Lamap, East Malo, Wala Rano, West Ambae
Rural Water Supply in Every Province
0.047
Reconstruction Malapoa College
1.494
New Proposed Privately Financed Investment Project
Takara Geothermal Power Plant (4+4MW) Preparatory Study & Invetsment
10.082

11. Public Infrastructure Projects

12. …cont.

13. …cont.

14. THE ECONOMIC & SOCIAL POLITICAL ECONOMICAL SOCIAL TECHNOLOGY
DEMOGRAPHICAL
GLOBALIZATION

15. POLITICAL& LEGAL TYPES OF INVESTMENTS STABILITY CHANGING FOCUS
RESTRICTIVE LEGISLATIONS

16. ECONOMICAL
Around 80% of the population involved in subsistence farming are not given the opportunity to participate in the economic growth and share in the benefits
When targeting poverty reduction, Geographical targeting at the level of the village or the urban community reduces the leakage of benefits to the non-poor. Not all poor people live in the village.

17. SOCIAL
Vanuatu’s major problem is its incapability of transforming the subsistence communities (comprising of 80% of population) with their rich traditional and cultural values into a more commercially oriented sector if the economic aspirations of the population are to be realized and achieved.

18. TECHNOLOGY
Distribution of Technology into the Islands is costly given that the Islands are scattered. Thus the marked prices of products are high.

19. GLOBALIZATION
For Vanuatu and other PICs the most important challenge is developing a better understanding of its likely impacts, consider the most realistic options and adapt to its challenges.

20. DEMOGRAPHICAL
Vanuatu’s islands are widely dispersed in a Y-shaped archipelago, stretching some 850 kilometers.
Marketing of agricultural products is constrained by the frequency, type and cost of inter-island shipping.
The main islands in Sanma, Shefa, Malampa, Penama and Tafea (only Tanna) provinces receive regular shipping calls.
Other islands, particularly Torba province are served very infrequently (sometimes it takes months for Torba) due to economic reasoning.

21. VNPF INVESTMENT IN INFRASTRUCTURE
ELECTRIFICATION
Shares in UNELCO
SOLAR Farm
SANTO
New Solar Farm
Shares in operating company
Control the Production Of Electricity

22. ELECTRIFICATION UNELCO Farmers Govt. Subsidies VNPF Coconut Oil
Manufacturers

23. TOURISM AIR VANUATU SHARES IN AIR VANUATU
OWN 5 STAR HOTELS/ INTERNATIONAL OPERATORS

24. TOURISM
VNPF
members
5 star hotel
Farmers
AVL

25. Food Processing/ Operator
VNPF
(Owner)
Farmers
Members of VNPF
AGRICULTURE