A future Coalition government has pledged to inject an additional $2 billion into infrastructure financing for the Pacific and Timor-Leste, expanding the total funding under the Australian Infrastructure Financing Facility for the Pacific (AIFFP) from $4 billion to $6 billion.
The announcement, made by Shadow Minister for Foreign Affairs David Coleman and Shadow Minister for International Development and the Pacific Michael McCormack, is aimed at reinforcing Australia’s role as the partner of choice for critical infrastructure development in the Indo-Pacific region.
First established by the Coalition in 2019, the AIFFP combines grants and concessional loans to fund major projects across the region. The facility has been instrumental in supporting port upgrades in Papua New Guinea, Tuvalu and Tonga, and in financing airport infrastructure improvements in Fiji, Nauru, and Timor-Leste.
“Infrastructure financing has become yet another battleground for influence in our region,” Mr Coleman said.
“Our commitment is to increase the lending headroom of the Facility from $3 billion to $5 billion, with the remaining $1 billion to be available in grants through Australia’s Official Development Assistance program.”
He said the additional funding would enhance regional partnerships and deliver projects that raise living standards and promote sustainable economic development.
“The economic prosperity of our region is fundamental to our shared vision for an open, inclusive and prosperous Indo-Pacific,” Mr Coleman said.
The Coalition’s renewed focus on the AIFFP is also part of its broader Pacific Step-up strategy, which aims to deepen Australia’s defence, economic, and diplomatic engagement in the region. The AIFFP’s infrastructure projects, they argue, provide transparent, community-driven alternatives to foreign financing that may come with less favourable terms.
Michael McCormack echoed this sentiment, stressing the Coalition’s long-standing commitment to infrastructure as a driver of regional development.
“The Coalition understands the power of infrastructure to change lives,” Mr McCormack said.
“It can improve health outcomes, create jobs, build stronger, more resilient economies, and open up new opportunities.”
He added that expanding the AIFFP was a “practical demonstration” of the Coalition’s commitment to security, stability and long-term economic recovery across the Pacific and Timor-Leste.
The announcement comes as geopolitical competition in the Pacific intensifies, with countries like China increasingly active in offering loans and building infrastructure projects in the region. Australia’s efforts to present itself as a reliable and transparent alternative are seen as central to its regional foreign policy.
The Coalition’s plan to grow the AIFFP will now become a key point of contrast with the Albanese Government’s approach to Pacific development, as foreign policy continues to feature in Australia’s broader election debate.
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