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Nauru and ADB

As the country begins its recovery from the COVID-19 pandemic, ADB assistance to Nauru will continue to support ongoing investments to improve transport infrastructure, expand internet connectivity, and promote renewable energy.

ADB's Work in Nauru

ADB Membership

Joined 1991

Shareholding and Voting Power

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

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

Overall capital subscription:
$6.14 million

Paid-in capital subscription:
$0.30 million

As a single island measuring only 21 square kilometers, Nauru faces the challenge of developing new sources of growth amid significant resource constraints. The Government of Nauru’s income derives mainly from a regional processing center for asylum seekers and revenues from selling fishing licenses.

The coronavirus disease (COVID-19) pandemic and associated trade and travel disruptions have affected Nauru’s supply chains—compounding challenges the country already faced because of its small size, distance from markets, and dependence on imports.

The Asian Development Bank (ADB) has been supporting Nauru since 1991 with focus on improving fiscal sustainability, critical infrastructure, and service delivery.

Since 1991, ADB has committed a loan of $5 million, grants of $75.3 million, technical assistance worth $6.4 million, and ADB-administered cofinancing of $54.7 million for Nauru.

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

Cumulative loan and grant disbursements to Nauru amount to $27.8 million. These were financed by regular ordinary capital resources and the Asian Development Fund.


ADB-Supported Projects and Programs

ADB’s recent development efforts in Nauru have helped the government respond to the COVID-19 pandemic and its impacts, address the country’s considerable infrastructure needs, and improve the delivery of essential services. There has also been a focus on strengthening fiscal sustainability and raising the performance of state-owned enterprises.

In 2020, ADB provided $1 million in grants from the Asia Pacific Disaster Response Fund to help finance Nauru’s response to the COVID-19 pandemic.

ADB is also supporting the Sustainable and Climate-Resilient Connectivity Project, which is transforming the largely inoperable Aiwo boat harbor to become Nauru’s first fully functioning international climate-resilient port. The project is cofinanced by the Green Climate Fund and the Government of Australia, while the Government of Nauru provides counterpart resources. Technical assistance is underpinning institutional reforms to strengthen the capacity of the Nauru Maritime and Port Authority.

To support Nauru’s transition toward sustainable energy, the Solar Power Development Project is financing a solar power plant and battery storage system and strengthening the Nauru Utility Corporation’s institutional capacity. It builds on ADB’s earlier support through the Electricity Supply Security and Sustainability Project, which installed two fuel-efficient generators for the Nauru Utilities Corporation, reducing the frequency of power outages by 91% in 2018, compared with 2015.

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

To help better connect Nauru with the rest of the world, the Improving Internet Connectivity for Micronesia Project will help deliver high-speed internet to the country through a submarine fiber-optic internet cable, reducing costs for businesses, households, and the government.

Through the Improving Public Investment Management Program, ADB provided a $5 million policy-based grant in 2020 to help the Government of Nauru improve the management of public expenditure and national infrastructure and the governance of state-owned enterprises. The program supported legislative changes and policy decisions to help Nauru sustain a responsible fiscal position and strengthen public service delivery.

Nonsovereign Operations

As a catalyst for private investments, ADB provides financial assistance to nonsovereign projects and financial intermediaries. Total commitments in loans and equity investments from ADB’s own funds in 2020 amounted to $1.4 billion for 38 transactions in economic and social infrastructure, finance sector, and agribusiness. ADB also actively mobilizes cofinancing from commercial and concessional sources. In 2020, ADB mobilized $1.9 billion of long-term project cofinancing and $3.3 billion of cofinancing through its Trade and Supply Chain Finance Program and Microfinance Program. Total outstanding balances and commitments of nonsovereign transactions funded by ADB’s own resources stood at $14.3 billion as of 31 December 2020.

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.

Financing Partnerships

Financing partnerships enable ADB’s financing 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 and Supply Chain Finance Program and Microfinance Program.

ADB began cofinancing operations in Nauru in 1996. Since then, sovereign cofinancing commitments for Nauru have amounted to $50.64 million for four investment projects and $3.41 million for five technical assistance projects.

In 2020, Nauru received $0.32 million grant cofinancing from the Government of New Zealand for the Improving Public Investment Management Program.

A summary of cofinanced projects is available at Nauru: Cofinancing.

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 emphasizes the need for a consultative and flexible response, long-term engagement, and the importance of capacity development. To support reform implementation and capacity building, ADB provides technical assistance and coordinates with other development partners to offer appropriate support.

Future Directions

As the country begins its recovery from the COVID-19 pandemic, ADB assistance to Nauru will continue to support ongoing investments to improve transport infrastructure, expand internet connectivity, and promote renewable energy. Under its projected development program for Nauru, ADB intends to support a major urban development project, policy-based grant to further strengthen state-owned enterprise governance and fiscal sustainability, and a technical assistance project to improve financial literacy in the community.

Technical support through ADB’s country and regional programs will continue to provide flexible and responsive assistance to meet Nauru’s development goals to support a more sustainable growth trajectory.

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

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

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