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Solomon Islands and ADB

ADB operations in Solomon Islands prioritize transport, urban and social infrastructure, tax reform, and public sector management.

Member Fact Sheet, April 2022

ADB's Work in Solomon Islands  Download Fact Sheet

Solomon Islands covers about 28,000 square kilometers of Melanesia in the South Pacific, with around 75% of the population residing in rural areas. The Asian Development Bank (ADB) has been providing support to the country since 1973, with assistance reflecting government priorities in infrastructure development, tax reform, public sector management, urban planning and development, and disaster risk management.

As the country’s economy recovers from the impacts of the coronavirus disease (COVID-19) pandemic, prospects rest primarily in the mining, agriculture, fishing, and tourism sectors. In 2020, ADB committed $20 million to the COVID-19 Rapid Response Program to support the economy and, through Phase 3 of the Pacific Disaster Resilience Program, ADB will provide a $5 million contingent disaster financing grant for early recovery and reconstruction activities following disaster triggered by natural hazards or health emergencies.

To date, ADB has committed 118 public sector loans, grants, and technical assistance totaling $406.1 million to Solomon Islands. Cumulative loan and grant disbursements to Solomon Islands amount to $209.5 million. These were financed by concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s ongoing sovereign portfolio in Solomon Islands includes 4 loans and 9 grants worth $154.6 million.

In 2021, ADB committed a $5.5 million grant to boost domestic resource mobilization and $10 million in cofinancing from Australia and New Zealand to support tax reform. ADB also provided additional financing of $4.6 million to improve urban water supply and sanitation and a multitranche finance facility comprising a $74.4 million loan and $74.5 million grant that will construct roads and wharves, with a first tranche committed at $24.4 million in concessional loan and $19.5 million in grant.

ADB supports the Government of Solomon Islands’ National Transport Plan, which seeks to rehabilitate critical transport infrastructure, through a concessional loan of $21 million. ADB has also committed a $12 million grant and $18 million in concessional financing for a project that will supply electricity generated from renewable energy sources to the capital, Honiara. ADB’s $7.9 million grant supports the implementation of grid-connected solar power plants in five provinces.

In 2019, ADB committed $37 million, and $3 million in project readiness financing to improve water and sanitation efficiency, accessibility, and sustainability in urban and peri-urban areas. ADB also committed $16.9 million to the University of the South Pacific to finance the expansion of the university campus in Honiara.

Rose Mae, Dmah Russell, Juniah Laurere own a pineapple stall next to an ADB funded road project on the outskirts of Honiara. Photo: Luis Enrique Ascui/ADB

Operational Challenges. Solomon Islands is distant from major markets, and transport infrastructure and services are weak. At the same time, the country is vulnerable to natural hazards, and poverty is widespread—characterized by a lack of access to essential services and income-earning opportunities. Creating an environment that fosters inclusive and environmentally sustainable growth remains a challenge, considering that the country has a small domestic market, narrow economic base, and low economic diversification based on agricultural and unsustainable logging as its primary export industry.

Solomon Islands continues to exhibit characteristics of a fragile state and lacks the capacity to provide many of the basic drivers to reduce poverty. COVID-19 and related government-imposed trade and travel restrictions impede the movement of equipment, materials, and workers from overseas, which negatively affects project implementation.

Knowledge Work

Solomon Islands faces capacity constraints and knowledge gaps affecting public sector management, private sector development, and gender equality. In 2021, the Private Sector Development Initiative published a study that benchmarks women’s business leadership across the Pacific, including a country profile for Solomon Islands. The ADB-supported Pacific Region Infrastructure Facility is assisting the government in updating the Solomon Islands National Infrastructure Investment Pipeline, which outlines significant infrastructure developments in economic and social sectors that are of the highest priority for the government.

Shareholding and Voting Power

Number of Shares Held
708 (0.01% of total shares)

Votes
39,822 (0.3% of total membership, 0.46% of total regional membership)

*Overall capital subscription
$9.91 million

*Paid-in capital subscription
$0.49 million

* United States dollar figures are valued at rate as of 31 December 2021.


ADB Governor: Harry Degruit Kuma
ADB Alternate Governor: Mckinnie Dentana
ADB Director: Tony McDonald (Australia)
ADB Alternate Director: David Cavanough (Australia)

Financing Partnerships

Financing partnerships enable ADB’s partner governments or their agencies, multilateral institutions, and private organizations to participate in ADB projects. The additional funds may be in the form of loans and grants, technical assistance, and nonsovereign cofinancing.

Cumulative cofinancing commitments in Solomon Islands:

  • Sovereign cofinancing: $423.73 million for 15 investment projects and $9.2 million for 13 technical assistance projects since 1983

In 2021, Solomon Islands received a $23.88 million loan cofinancing from the Japan International Cooperation Agency for the COVID-19 Rapid Response Program, and a total of $14.59 million grant cofinancing from the governments of Australia and New Zealand, and the Least Developed Countries Fund for Climate Change under the Global Environment Facility for 2 investment projects.

Future Directions

ADB’s planned support for Solomon Islands aligns with the government’s strategic focus on increased infrastructure development, tax reform, prudent financial management, and strengthening basic health services and education. Substantial investments in the transport sector will improve road and maritime infrastructure in Honiara and the provinces and contribute to better connectivity and economic activity. Investments in social infrastructure will improve health services and create health resilience, while a planned education sector project will support climate-smart citizens and increase students’ employability. A solid waste management project will improve urban service delivery and the quality of life in Honiara. A tax reform project and support to improve public financial management practices will increase domestic revenue mobilization and improve the country’s fiscal situation.

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

Contacts

Pacific Liaison Coordination Office
Established: 2005
Regional Director: Lotte Schou-Zibell
45 Clarence St, Level 20
Sydney 2000, NSW, Australia
  Tel: +61 2 8270 9444
  Fax: +61 2 8270 9445
 Email
  www.adb.org/offices/pacific/main

Solomon Islands Pacific Country Office
Asian Development Bank
Established: 2018
Level 1, Heritage Park Commercial Building
Mendana Avenue, Honiara, Solomon Islands
  Tel: +677 23333
  www.adb.org/solomon-islands
  www.twitter.com/ADB_Pacific
  www.facebook.com/adbpacific

Ministry of Finance and Treasury
P.O Box 26, Honiara
  Tel: +677 21058/21074
  Fax: +677 27855

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Asian Development Bank and Solomon Islands: Fact Sheet

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