SYDNEY (BLOOMBERG) - Australia will partner Japan and the US to finance a US$30 million (S$40.7 million) undersea fibre-optic cable for the South Pacific nation of Palau, the first project to be backed as part of a new infrastructure funding plan by the strategic partners.

The decision to support the project, which will connect Palau to a new cable spanning Singapore to the west coast of the US, "demonstrates a shared commitment to delivering sustainable, transparent, high-quality infrastructure projects," Australian Foreign Affairs Minister Marise Payne said in a statement Wednesday (Oct 28).

The US and its key allies Australia and Japan have been increasingly critical of China-backed infrastructure projects in the region, saying many aren't properly planned or financially sustainable and are of questionable use. That's prompted them to form the Trilateral Partnership for Infrastructure Investment in the Indo-Pacific, which will oversee funding for the Palau cable.

As China spreads its influence beyond the South China Sea to the South Pacific - a region comprised of island nations traditionally under US hegemony and on Australia's doorstep - officials in Washington and Canberra are concerned Beijing may use debt through infrastructure loans as leverage to establish military bases in the region.

In a bid to counter China's growing influence in the South Pacific, Australia is helping finance a series of cable projects in the region for nations including Papua New Guinea, the Solomon Islands and Timor-Leste. The government says it has committed A$1.44 billion (S$1.39 billion) in aid to the region in fiscal 2020-21, and has pledged another A$2 billion to help bolster infrastructure projects.