Australia grants Nauru $64 million to bolster security, banking services

Recasts throughout with details from joint statement, adds banking deal in paragraphs 10-12

By Renju Jose

SYDNEY, Dec 9 (Reuters) - Australia and Nauru signed an A$100 million ($64 million) aid package on Monday to boost the Pacific island nation's security, banking and telecommunications sectors, in a deal aimed at countering China's increasing influence in the region.

The new deal prevents third countries from accessing Nauru's critical infrastructure for security purposes, Australian Prime Minister Anthony Albanese and Nauru's President David Adeang said at a joint media briefing.

"The economic stability of our neighbours benefits our entire region," Albanese said.

"(The deal) will strengthen Nauru's longer-term stability and economic resilience. It is also firmly in Australia's interests in a peaceful, secure and economically resilient Pacific region, the region that together we call home."

Albanese said Australia will remain Nauru's primary security partner, and pledged fresh investments to support the island's policing and national security needs.

"We appreciate Australia's steadfast support as we try to address our unique development challenges while we continue diversifying our economy, exploring innovative opportunities and safeguarding our region's peace and stability," Adeang said.

Nauru, the world's third-smallest country, in January switched diplomatic ties to China from Taiwan, after China built a port and promised more aid, raising concerns in the West about Beijing's ambitions in the Pacific region, where Australia and the United States traditionally have held sway.

Beijing has already signed defence, trade and financial deals with some Pacific island states, while the Bank of China 601988.SS this year signed an agreement with Nauru to explore opportunities there.

Albanese said the deal with Nauru would allow it to maintain banking services with the Commonwealth Bank of Australia CBA.AX, expected to begin operations there in 2025.

Nauru's only lender, the Bendigo and Adelaide Bank BEN.AX, will end its services there in June.

Many Pacific Island countries are losing access to banks and international payments as Western institutions close branches or cut ties with their counterparts across the sparsely populated and remote region.

The World Bank is also preparing an emergency U.S. dollar facility, backed by the U.S. and Australia, that Pacific island countries could access for trade and remittances if they are cut off from global finance.

($1 = 1.5640 Australian dollars)

(Reporting by Renju Jose in Sydney; Editing by Alasdair Pal and Saad Sayeed)

((renju.jose@thomsonreuters.com;))