The Australian government will use millions of dollars from its foreign aid budget to jointly fund the construction of telecommunications cables in Solomon Islands, in a move that will oust a company accused of having links to the Chinese government.
Solomon Islands had announced in 2016 that Chinese company Huawei would build cables linking parts of Solomon Islands together, and with Papua New Guinea.
But Australia wasn't happy about it. Huawei has been banned from tendering for the National Broadband Network, and Australia's spy agencies have made it clear that they have security concerns about letting Huawei build the subsea cable due to the company's alleged ties to the Chinese communist party.
Huawei has frequently denied – including as recently as last week – any ties to the Chinese government, but Solomon Islands prime minister Rick Houenipwela said in New Zealand last week that security concerns raised by Australia were the "trigger" for the country to move away from Huawei.
A significant enticement was Australia offering to pay for most of the cost of a new cable. The exact cost isn't known as the tender process is yet to be conducted, but some estimates put it at around $200 million, and Houenipwela indicated Australia will be paying two-thirds of that.
On Wednesday prime minister Malcolm Turnbull announced that a deal had been struck with Solomon Islands for the construction of the cable, and more cooperation "across a range of areas including regional security, telecommunications and cyber issues".
Foreign minister Julie Bishop played up the new deal as being more about Australia providing competition for the region.
"What we have offered the Solomon Islands, and they have accepted, is an alternative to the offer, and ours is cheaper," she said at a press conference on Wednesday. "It's likely to be a faster result for them, and technically superior. And also more resilient.
"So we've offered an option for an undersea cable for Solomon Islands and PNG that I believe would be in the interests of both countries. That is PNG and Solomon Islands, because it's across both."
Bishop said that the deal was attractive for Solomon Islands and PNG, and that Australia was the largest aid donor in the Pacific.
"I want to ensure that countries in the Pacific have alternatives, that they don't only have one option and no others, and so in this case we are in a position to be able to offer a more attractive deal for Solomon Islands and PNG, and they accepted it."
.@TurnbullMalcolm: The overall cost of the PNG and Solomon Islands project will be $200 million and it's within the aid budget. This is a practical, vital piece of infrastructure to support economic development. MORE: https://t.co/8g6PtgpdyS #SkyLiveNow https://t.co/4uLg9GXw2B
Turnbull said that the funding from foreign aid was "practical and substantial" and would ensure Solomon Islands "has access to 21st century telecommunications".
"It's going to be vital for education, for commerce, for economic development, in every aspect of their society, just as it is in ours," he said.