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The Pacific Islands Development Bank (PIDB) Board of Governors held a special meeting in Palau on Friday, July 30, primarily to review and address the bank’s capacity and resource base, vital to its growth and expansion strategy. While the bank has consistently grown in total assets and loan balances in the past five years, increasing its financial resources and capacity remains one of its immediate and highest priorities. The Board, recognizing that need, formed a four-member special Task Force whose main task and objective is to identify and pursue various funding and capitalization sources. "PIDB plays a significant and expanding role in promoting and facilitating the economic development of our island communities", said Gov. Felix Camacho, Chairman of the PIDB Board of Governors. He added that "we need to secure the necessary resources the bank needs in order to carry out its mission and purpose and forming the Task Force is timely". Aren Palik, Bank President & CEO, indicated that the bank has been undercapitalized since its inception and cautioned that securing additional capitalization and funding will not be an easy task. "With the ongoing global recession and the economic and financial challenges faced by many industrialized countries, securing additional capital especially through soft loans will not be easy". Palik added, &quo;the Task Force will work diligently and collaborate with our member governments and development partners as we pursue funding from both public and private sources".

Governor Robert Weilbacher of Kosrae reported in the meeting that Kosrae has made another purchase of capital stock worth $50,000. This increases Kosrae’s total contributed capital in the bank to $700,000. Yap, Palau, Guam, Pohnpei, and Commonwealth of the Northern Mariana Islands have already completed its required membership equity capital of $1 million. Chuuk State has contributed $251,000. Chairman Camacho thanked Governor Weilbacher for Kosrae’s continued commitment, especially in these difficult times.

The Board also approved the final terms and conditions of a loan facility between PIDB and FSM Development Bank and discussed the status of Marshall Islands membership in the bank, expressing hope that RMI will soon join the bank with its first membership installment payment. The Board, before adjourning, also elected the following new Officers: Governor Sebastian Anefal of Yap, Chairman, Governor John Ehsa of Pohnpei, Vice Chairman, and Vice President and Minister of Finance Kerai Mariur of Palau, Secretary. Outgoing Chairman Camacho thanked members for their support, adding that it has truly been an honor to serve as Chairman of the Board.

Sitting (from left): Governor John Ehsa (Vice Chairman), Governor Felix Camacho (Chairman), Governor Benigno Fitial, Governor Kerai Mariur (Secretary), Governor Robert Weilbacher, Governor Sebastian Anefal.

Standing (from left): Governor Charles Chieng, Governor/Director Secilil Eldebechel, Director Lourdes Perez, Bank President and Board of Directors Chairman Aren Palik, Speaker Judy Won Pat (proxy for Governor Ben Pangelinan), Governor Ilai Abraham, Governor/Director Thomas Pablo, Governor/Director Diego Benavente, Director Micahel Gaan.

Two days earlier, the bank’s Board of Directors also held its regular meeting and to facilitate the Board of Governors meeting. Among others, the Board reviewed its 2nd quarter operational performance, investment report, adequacy of allowance for loan loss reserve, and took action on commercial loan requests. The seven-member board is chaired by the Bank’s President and CEO.

Pacific Islands Development Bank (PIDB) is a regional development finance institution, created by the Association of Pacific Island Legislatures (APIL), to assist and contribute to the economic and social development of its member nations and States, individually and collectively, and to promote economic cooperation among them. Current members of the bank include the Republic of Palau, Island of Guam, Commonwealth of the Northern Mariana Islands, and the FSM States of Yap, Chuuk, Pohnpei, and Kosrae. It’s corporate office is located in Guam. To learn more about the bank and its products and services, visit www.pacificidb.com.

Hagatna, Guam - On September 8, 2008, USDA Rural Development State Director
Lorraine Shin and Pacific Islands Development Bank President Aren Palik signed the
documents for a $750,000 loan under the USDA Rural Development’s Intermediary
Relending Program (IRP). As the intermediary bank, PIDB will use the proceeds of the
loan to finance business facilities and community development projects in the western
Pacific island countries, establishing new businesses, expanding existing businesses,
thereby saving jobs and creating new employment opportunities.

At the loan closing ceremony, State Director Lorraine Shin said, "we are very fortunate to
have Pacific Islands Development Bank as our partner. They have proven to be a viable
entity in providing small business loans to the Western Pacific.” She also commended the
staff of its Guam office for their excellent work in assisting PIDB securing the loan.

Joe Diego, Area Director for Rural Development’s west Pacific region said, “USDA
Rural Development values the long-term partnership established with PIDB. Small
businesses in Guam, the Commonwealth of the Northern Mariana Islands, the Federated
States of Micronesia and the Republic of Palau that cannot obtain conventional bank
financing now have another option to consider when addressing the capital needs of their
business.”

Pictured Left to Right: Jeff Jobe, National Business and Cooperative Field Advisor, USDA Rural Development; Joseph M. Diego, Area Director, USDA Rural Development, West Pacific Area; Aren Palik, PIDB President/CEO; Lorraine Shin, State Director, USDA Rural Development; Bernadette Balajadia, Area Specialist, USDA Rural Development; Lourdes M. Perez, PIDB Resident Director; and Aaron Sigrah, PIDB Loan Officer.

Bank President Palik thanked State Director Shin and Area Director Diego and their staff
for their role in making the third loan possible. He said, “we have enjoyed a very good
and professional working relationship with your staff in Guam and Hawaii and I
commend you on your leadership and continued interest in helping small businesses in
the islands.” Palik added, “PIDB will do its very best to make sure that the objective of
the program is achieved and the benefits are realized by small and medium businesses in
the region.” President Palik shared with State Director Shin examples of the successful
projects funded under the IRP program, adding that the additional $750,000 will enable
the bank to expand its program assistance.

Under a highly competitive IRP funding process, PIDB was awarded $500,000 in fiscal
year 2004 and another $750,000 in fiscal year 2006. This is the third loan under the same
source priced at one percent (1%) interest to be repaid in 30 years with a 3-year grace
period. As a condition of approval, PIDB will provide a dollar-for-dollar match to fund
the revolving account to re-lend to businesses in the islands.

PIDB is a regional development bank servicing the financing needs of the people and
businesses in Guam, Palau, Commonwealth of the Northern Mariana Islands, and the
FSM States of Yap, Chuuk, Pohnpei, and Kosrae. Its mission is to contribute to the
acceleration of economic and social development of member States and nations and to
promote regional cooperation. Further information on the bank and its programs is
available at our office in Guam or by visiting PIDB's web site at www.pacificidb.com.
Pacific Islands Development Bank is an Equal Opportunity Lender, Provider, and
Employer.