The Asian Development Bank (ADB) has approved a $10 million grant facility aimed at strengthening project delivery, boosting resilience to environmental and disaster risks, supporting private sector development and accelerating sustainable economic growth in Vanuatu.
The financing will establish the Vanuatu Sustainable Economic Transformation Facility, ADB's first Small Expenditure Financing Facility in the Pacific, providing flexible, multi-sector funding to help the government respond more effectively to emerging development challenges.
ADB said the facility would enhance the effectiveness and sustainability of its investments in Vanuatu while supporting the country's long-term development priorities.
"Vanuatu's development priorities are evolving rapidly in an increasingly uncertain environment," said Jyotsana Varma, regional director of ADB's Pacific Liaison and Coordination Office.
"This facility gives the government the flexibility and capacity to respond to emerging challenges, strengthen project delivery, and invest in long-term resilience. By supporting institutional strengthening, private sector development, and critical services, it is an important step towards a more resilient and prosperous future for the people of Vanuatu."
ADB noted that Vanuatu remains one of the world's most disaster-prone countries and continues to face challenges linked to its geographic isolation, limited institutional capacity and the high cost of delivering services across its dispersed island population.
The financing is intended to help address these constraints while creating new opportunities in key government priority areas, including public-private partnerships, digital transformation, agricultural development and water security.
An initial allocation of $2.5 million will be used to strengthen the capacity of the Vanuatu Project Management Unit and the Ministry of Finance and Economic Management. The funding will support project and financial management, procurement, safeguards and monitoring systems to improve implementation of development projects.
The facility will also provide flexible financing to address project delivery challenges, improve the maintenance of critical infrastructure and services, and support rapid recovery efforts following natural disasters.
The initiative will be funded through the Asian Development Fund, which provides grant financing to the poorest and most vulnerable countries in Asia and the Pacific.
ADB said the facility would help build stronger institutions, improve service delivery and support sustainable economic transformation as Vanuatu continues to navigate increasing climate and development pressures.
The bank, established in 1966, is owned by 69 member countries and supports sustainable, inclusive and resilient growth across Asia and the Pacific through financing, technical assistance and strategic partnerships.
