HONIARA, SOLOMON ISLANDS (23 April 2020) — The Asian Development Bank (ADB) today announced the release of a $3 million (24.88 million Solomon Islands dollar) grant and a $3 million concessional loan from its Pacific Disaster Resilience Program (Phase 2) to help finance the Government of Solomon Islands’ response to the novel coronavirus disease (COVID-19) pandemic.
A state of emergency was declared in Solomon Islands on 25 March, with the country closing its borders, in response to the COVID-19 pandemic. This was extended on 7 April for a period of 4 months. The scale of the emergency is expected to be beyond the capacity of the government’s health sector to meet the immediate expenses needed for adequate public health services during the crisis.
“ADB’s financing will help fund the country’s response to this health emergency,” said ADB Director General for the Pacific Leah Gutierrez. “While Solomon Islands remains free of the virus, this quick-disbursing financing will allow the country to prepare for this potential health emergency.”
The Asian Development Outlook 2020 report says that economic growth in Solomon Islands is expected to slow to 1.5% in 2020 and will likely recover to 2.7% in 2021 as construction on large infrastructure projects offsets a continuing decline in logging. The report says tax reforms will become critically important in supporting broad-based growth.
On 13 April, ADB extended its contingent disaster financing instrument for the Pacific to include health-related emergencies in the definition of natural hazards, allowing for the release of funds in response to the COVID-19 pandemic. The Pacific Disaster Resilience Program (Phase 2) fills a financing gap experienced by many Pacific countries hit hard by disasters, providing a predictable and quick-disbursing source of financing for early response, recovery, and reconstruction activities.
The $6 million support to the Government of Solomon Islands will complement ADB’s $20 billion package—announced on 13 April—to support member economies as they cope with the COVID-19 pandemic. ADB is engaged in discussions with all its developing member countries, including those in the Pacific, on how best to utilize this support.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.