Venture Fund’s first award

Pago Pago, AMERICAN SAMOA — Locally based Inter Island Airways’ request for financial assistance, through the federally funded American Samoa Venture Fund (ASVF) program, has been given the green light and the governor has signed off on the paperwork for the company to receive the money in less than two weeks.

Funding for the ASVF comes from the $3.5 million that Amer
ican Samoa received from the State Small Business Credit Initiative (SSBCI), a US Department of Treasury program administered locally by the ASG Commerce Department.

Although the SSBCI office no longer exists - as of Sept. 27, 2017 - the $3.5 million already drawn down for the local program can still be used and American Samoa has until the end of the year to award the funds.

Commerce director Keniseli Lafaele emphasized to Samoa News late last year, SSBCI “is a matching program” — that is, federal money, SSBCI, is matched with private capital — equity or debt, or both.

“There is a lack of capital market in the territory to provide the required private matching,” Lafaele said.

Samoa News has learned that Inter Island Air’s application through the Venture Capital program was approved recently and this was confirmed late Wednesday afternoon by Lafaele in response to Samoa News inquiries. According to Lafaele, the airline’s application was approved recently for ASVF funding, “when the requirements of the US Treasury SSBCI program were met.”

Samoa News also inquired about the requested amount sought by the airline; did the airline secure investor(s) for this project; and does the airline plan to operate flights to Manu’a as well as Samoa?

Lafaele explained that Inter Island Air’s application “requested an investment of $400,000 from ASVF” and the airline is “investing $400,000, with a third party financing the cost of the aircraft” for its operations.

Inter Island Air’ s “main goal is to service the domestic inter- island market and help develop the economy of the Territory,” said Lafaele, who noted that Gov. Lolo Matalasi Moliga signed Wednesday morning the payment voucher for the $400,000 investment from ASVF to Inter Island Air.

“Hence Inter Island Air should receive the government investment — ASVF —within a week or two. The ASVF investment is in the form of preferred stocks,” he explained.

And so far, Inter Island Air is the only applicant approved to receive funds from ASVF.

Last September, Lafaele told Samoa News that while no projects or businesses have been awarded any money, there are two or three that could receive funding.

Asked for an update, Lafaele said yesterday afternoon that since last September, none of the projects could be funded “due to the lack of private matching investments.”
He said, “Efforts are on-going to seek private matching investments for the aforementioned three businesses.”

Additionally, “We aim to deploy the rest of the ASG-US Treasury-SSBCI allocation in the next three months.”

American Samoa was initially awarded $10.5 mil- lion several years ago for the SSBCI, but efforts to get the program off the ground have been met with obstacles. Under the revamped program by the Lolo Administration in 2013, it is now called the ASVF.

The most difficult task faced by American Samoa, is securing investors, and/or financial institutions to provide matching funds — as required for the SSBCI.

For Inter Island Air, owned by the Sene family, the carrier served the domestic route as well as the inter Samoa route. However, on Apr. 20, 2017, the US Transportation Department revoked the airline’s commuter air carrier authorization after the airline had not conducted commuter operations for the previous three years.

Currently, the Samoa government owned Samoa Airways is operating Manu’a flights under 30-day cabotage waivers granted by the USDOT.

Comment Here