fbpx ADB’s Work in Nauru | Asian Development Bank

Pacific Liaison and Coordination Office (PLCO)

ADB’s Pacific Liaison and Coordination Office in Sydney serves as the focal point for programming, processing, and administering assistance to Nauru, the Solomon Islands, and Vanuatu.

ADB's Work in Nauru

ADB Membership

Joined 1991

Shareholding and Voting Power

Number of shares held:
426 (0.004% of total shares)

39,540 (0.297% of total membership, 0.457% of total regional membership)

Overall capital subscription:
$5.89 million

Paid-in capital subscription:
$0.29 million

Nauru is one of the world’s smallest island nations. Its remote location and small domestic market raise the cost of doing business and leave its institutions thinly resourced. The Government of Nauru’s income derives largely from the presence of a regional processing center for asylum seekers and revenues from selling fishing licenses.

ADB has been supporting Nauru since 1991, and cooperation has most recently focused on shoring up the country’s economic and fiscal sustainability, which remain key concerns for the government given its reliance on narrow and uncertain sources of revenue, with limited private sector opportunities.

Frigatebirds catching is an important tradition in Nauru passed on by the elders to the next generation.

ADB has been supporting Nauru since 1991, and has committed a loan of $5 million, grants of $119.6 million, and technical assistance worth $7 million. Cumulative loan and grant disbursements to Nauru amount to $19.0 million.

ADB-Supported Projects and Programs

ADB’s recent development efforts in Nauru have helped the government address the country’s considerable infrastructure needs, improve the delivery of essential services, strengthen public financial management, and raise the performance of state-owned enterprises.

In 2018, ADB completed the $9 million Electricity Supply Security and Sustainability Project, cofinanced by the European Union and the Government of Australia. The project invested in two new fuel-efficient generators for the Nauru Utilities Corporation and helped repair the corporation’s power station. In 2019, ADB committed a grant of $22 million for the Solar Power Development Project, which will finance a 6-megawatt solar power plant and a 5-megawatt battery storage system. Once this project and a parallel energy project via the European Union and the Government of New Zealand are completed, solar power will represent up to 47% of electricity generation in Nauru.

The Electricity Supply Security and Sustainability Project intends to increase the reliability and sustainability of power generation in Nauru.

In 2018, ADB committed a $21.30 million grant to help upgrade the Aiwo boat harbor to become Nauru’s first fully functioning international port. The project will transform the largely inoperable boat harbor into an efficient, reliable, and climate-resilient port, boosting trade, tourism, and regional connectivity. The Green Climate Fund ($26.91 million), the Government of Australia ($14.08 million), and the Government of Nauru ($17.30 million) are contributing to the $82.70 million project, which will also strengthen the capacity of the Port Authority of Nauru.

ADB has committed a $15 million grant for Nauru to help deliver highspeed internet to the country through a submarine fiber-optic internet cable project that also takes in the Federated States of Micronesia and Kiribati. The cables will provide faster, cheaper, and better-quality connections than satellite dishes, delivering digital services in health and education and reducing the cost of doing business.

Students of the Nauru College are the beneficiaries of the Improving Internet Connectivity for Micronesia Project. The project aims to develop telecommunications and the quality of internet service in Nauru.

Nauru has benefited from the Pacific Private Sector Development Initiative, a regional technical assistance program administered by ADB, which helped reestablish banking services in the country in 2015, after more than 15 years without a functioning bank. ADB has committed technical assistance that is helping the government further expand financial inclusion in Nauru. It is doing so by improving financial literacy and undertaking reforms to bring broader financial services to the island.

ADB also supports Nauru through the Pacific Region Infrastructure Facility, a research and technical assistance mechanism to improve infrastructure services and strengthen development coordination in the region. In 2018, the facility published the Nauru Infrastructure Investment Plan Review, which will guide the government with strategic planning of the country’s future infrastructure.

Nonsovereign Operations

As a catalyst for private investments, ADB provides financial assistance to nonsovereign projects and financial intermediaries. Total commitments from ADB’s own funds (in equity and direct loans) in 2019 amounted to $3.00 billion for 38 transactions in economic and social infrastructure, the finance sector, and agribusiness. ADB also actively mobilizes cofinancing from commercial and concessional sources. In 2019, ADB mobilized $3.28 billion of long-term cofinancing and $3.69 billion of cofinancing in trade finance, microfinance, and supply chain finance programs. Total outstanding balances and commitments of nonsovereign transactions funded by ADB’s own resources stood at $13.78 billion as of 31 December 2019.

Financing Partnerships

Financing partnerships enable ADB’s development partners, governments or their agencies, multilateral financing institutions, and commercial organizations to participate in financing ADB projects. The additional funds are provided in the form of loans and grants, technical assistance, and other nonsovereign cofinancing such as B loans, risk transfer arrangements, parallel loans and equity, guarantee cofinancing, and cofinancing for transactions under ADB’s Trade Finance Program and Supply Chain Finance Program.

ADB began cofinancing operations in Nauru in 1996. Since then, sovereign cofinancing commitments for Nauru have amounted to $50.32 million for three investment projects and $3.19 million for four technical assistance projects.

Projects Cofinanced, 1 January 2014–31 December 2018

Operational Challenges

ADB activities in Nauru are impeded by the practical realities of the country’s geography. Small size and remoteness raise the cost of providing public infrastructure and services, while limiting economies of scale. Nauru has a narrow economic base and is heavily reliant on imports.

The ADB approach in Nauru is to emphasize the need for a flexible response, longer-term engagement, and the importance of capacity development. Proactive engagement— along with a consultative and participatory approach by ADB— helps to ensure local buy-in and commitment to the bank’s activities. To encourage reform implementation, ADB often provides direct assistance or coordinates with other development partners to offer appropriate support.

Future Directions

As part of its projected development program for Nauru, ADB intends to provide a policy-based grant in support of ongoing reforms to promote greater fiscal sustainability, strengthen public financial management, and improve service delivery.

Nauru will also continue to benefit from regional technical assistance programs supported by ADB, including implementing a new sustainable infrastructure strategic plan.

This article was originally published in the ADB and Nauru: Fact Sheet. Updated yearly, this ADB Fact Sheet provides concise information on ADB's operations in the country and contact information.

Spotlight on Nauru

News Release

ADB Announces $1.53 Million in Grants to Help Pacific Combat COVID-19

ADB announced $1.53 million in grants from its Asia Pacific Disaster Response Fund to help finance the response to the novel coronavirus (COVID-19) pandemic in the Federated States of Micronesia (FSM), the Marshall Islands, Nauru, and Tuvalu. Nauru will receive $320,000, which will enable the country to kickstart their disaster response plans. 

News Release

Tourism-Driven Economies in the Pacific to Feel Brunt of COVID-19 Pandemic — ADB

Growth in Nauru is forecast to slow to 0.4% in FY2020 and recover to 1.1% in FY2021. This forecast assumes that Regional Processing Centre in Nauru (RPC) activity continues to moderate and that phosphate exports remain weak, while construction on a new seaport provides follow-on benefits to local services.

Project Case Study

How Innovation is Helping to Deliver a New Port for Nauru

Nauru’s new port, set for completion in 2021, will make imports and exports cheaper, quicker, and safer.

Related: Q&A: How a New Port is Building Skills and Knowledge in Nauru


Nauru is Getting a New Port; These Workers are Getting Much More

Construction has begun on a new port in Nauru, which will one day make imports safer, easier, and cheaper for the Pacific island nation. But a new port needs workers who know how to operate it. And that training—in key areas such as maritime safety, stevedoring, and equipment maintenance—has already begun.