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Solomon Islands and ADB

ADB’s country operations business plan, 2021–2023 for Solomon Islands will continue to support three priority sectors: transport, public sector management, and urban infrastructure and planning.

ADB's Work in Solomon Islands

ADB Membership

Joined 1973

Shareholding and Voting Power

Number of shares held:
708 (0.007% of total shares)

Votes:
39,822 (0.299% of total membership, 0.460% of total regional membership)

Overall capital subscription:
$10.20 million

Paid-in capital subscription:
$0.50 million

Solomon Islands covers about 28,000 square kilometers of Melanesia in the South Pacific, with around 85% of the population living in villages of just a few hundred people each.

The country’s economy experienced a significant contraction because of the coronavirus disease pandemic, though a fragile recovery is underway with prospects resting largely on opportunities in mining, agriculture, fishing, and tourism.

Children playing in a beach on the outskirts of Honiara.

The Asian Development Bank (ADB) has been supporting Solomon Islands since 1973. Its assistance has focused on developing infrastructure to support inclusive growth, including transport assets, renewable energy, and water supply and sanitation.

Since 1973, ADB has committed loans totaling $184.4 million, grants of $143.4 million, technical assistance worth $26.1 million, and ADB-administered cofinancing of $102.5 million for Solomon Islands.

Cumulative loan and grant disbursements to Solomon Islands amount to $205.8 million. These were financed by concessional ordinary capital resources, the Asian Development Fund, and other special funds.

ADB-Supported Projects and Programs

In 2020, ADB approved a $1.5 million grant from the Asia Pacific Disaster Response Fund as well as provided $1.8 million of technical assistance to support Solomon Islands in preparing and responding to the COVID-19 pandemic. The $20 million COVID-19 Fiscal Response Program was also committed in 2020 and supports the Government of Solomon Islands’ health response and economic stimulus package.

With its population dispersed over more than 900 small islands, transport is a key development priority for Solomon Islands. ADB supports the government’s National Transport Plan, which calls for integrated planning, environmental and social sustainability, and disasterresilient infrastructure.

The Sustainable Transport Infrastructure Improvement Program is strengthening country systems to deliver the National Transport Plan and aligning government funding with development partner assistance through the National Transport Fund.

In 2018, ADB committed a $6 million grant for the Transport Sector Project Development Facility. Financed from the Asian Development Fund, the facility supports feasibility studies, detailed designs, procurement protocols, and social and environmental safeguards for priority road and maritime projects.

Transport Sector Project Development Facility aims to improve the design and implementation of priority road, maritime, and aviation projects

ADB committed a $12 million grant and $18 million in concessional financing to support the implementation of the Tina River Hydropower Project.

The project will supply electricity generated from renewable sources to Honiara. Meanwhile, ADB’s $7.91 million grant for the Solar Power Development Project is supporting the implementation of grid-connected solar power plants and will increase the supply of clean electricity, reducing the need for costly shipments of diesel to provincial centers.

In 2019, ADB committed the Urban Water Supply and Sanitation Sector Project, which aims to improve the efficiency, accessibility, and sustainability of safe water and sanitation for the around 141,000 people living in urban and peri-urban areas.

Tina River Hydropower Project will help reduce Solomon Islands’ reliance on imported fossil fuels for energy through hydropower generated from Tina River.

The bank also signed a $3 million loan and a $3 million grant agreement with Solomon Islands as part of its regional program on disaster resilience in the Pacific. The facility was disbursed in response to the COVID-19 pandemic in 2020. In the next phase of the contingent disaster facility, a $5 million grant will help improve the country’s preparedness for disasters triggered by health-related emergencies or natural hazards.

The Higher Education in the Pacific Investment Program supports the expansion of the University of South Pacific campus in Solomon Islands. The program will also enhance technology-based distance learning programs.

Sewing course initiative in the outskirts of Honiara part of the Pacific Private Sector Development Initiative

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.

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 Solomon Islands in 1983. Since then, sovereign cofinancing commitments for Solomon Islands have amounted to $385.27 million for 13 investment projects and $9.2 million for 13 technical assistance projects.

In 2020, Solomon Islands received $15 million loan cofinancing from the World Bank for the Urban Water Supply and Sanitation Sector Project.

A summary of cofinanced projects is available at Solomon Islands: Cofinancing.

50 years of ADB’s partnership in the Pacific

Operational Challenges

Solomon Islands continues to exhibit characteristics of a fragile state and its structures lack the capacity to provide many of the basic drivers to reduce poverty. The country is remote from major markets and has low levels of human development, a small domestic market, and a narrow economic base. It is also affected by disasters caused by natural hazards. Key development challenges include generating sustainable economic growth, building fiscal buffers to respond to shocks, and improving government capacity to implement projects. Despite the progress made under the Regional Assistance Mission to Solomon Islands, ADB and other development partners continue to face the challenges of working in a post-conflict environment while trying to implement projects.

Future Directions

ADB’s country operations business plan, 2021–2023 for Solomon Islands will continue to support three priority sectors: transport, public sector management, and urban infrastructure and planning. A land and maritime project is proposed to improve roads and wharves across the country. ADB will continue to support recovery from the COVID-19 pandemic and implement necessary reforms through a series of policy-based operations and a proposed project to increase domestic revenue mobilization. Health and education have been identified as additional areas for potential involvement.

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.

Spotlight on Solomon Islands

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Project Result / Case Study

Reconnecting Solomon Islands After the Cyclone Ita Floods

ADB’s Transport Sector Flood Recovery Project helped reinstate bridge approach roads, culverts, and stream crossings and rebuilt three elevated bridges, reestablishing a seamless east–west road link on Guadalcanal and within Honiara. All works incorporated climate- and disaster-proof design.

Institutional Document

Pacific Energy Update 2019

This document highlights how ADB technical assistance and energy sector projects are helping to build resilient, low-carbon economies, while increasing access to clean, reliable power in the Pacific.

Publication

Asian Development Bank and Solomon Islands: Fact Sheet

ADB works closely with the Government of Solomon Islands on development strategy, transport infrastructure, private sector development, promotion of renewable energy sources, and public finance management reforms and macroeconomics.