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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 Vanuatu

ADB Membership

Joined 1981

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:
$9.79 million

Paid-in capital subscription:
$0.48 million

Vanuatu faces development challenges typical of small island economies. These include remoteness, small market size, limited human and financial resources, and vulnerability to shocks such as natural disasters.

Fishermen exploring the waters for a catch in Malekula, Vanuatu.

In recent years, economic growth in the country has been driven by construction, tourism, and aid inflows. The rural economy is primarily agrarian, with largely subsistence farming, aside from some copra, beef, cocoa, and kava produced for export.

In 1980, Vanuatu gained independence from France and the United Kingdom, after 76 years of joint administration, and ADB began supporting the country in 1981.

ADB has been supporting Vanuatu since 1981, committing $96.8 million in loans, $95.9 million in grants, and $25.3 million in technical assistance. Cumulative loan and grant disbursements to Tuvalu amount to $86.5 million.


ADB-Supported Projects and Programs

The successful implementation of critical infrastructure projects remains a key focus for ADB in Vanuatu.

The Port Vila Urban Development Project, which aimed to upgrade road networks and drainage systems, and improve the disposal and treatment of domestic and commercial septic waste, is now complete. Under the project, multipurpose sanitation facilities—including toilets, washing amenities, and bathing facilities in villages and the rural–urban hinterland—were established. The project also provided government agencies and community organizations with awareness programs on sanitation, roads, drainage systems, hygiene, and health education. An ensuing project is being designed in 2020.

ADB has committed financing for the Energy Access Project, which will expand the availability of electricity and increase renewable energy generation in the two islands of Espiritu Santo and Malekula—Vanuatu’s secondand third-largest population centers, respectively, after Efate. The project will help install hydropower generation to replace diesel generation and extend power distribution grids.

The Interisland Shipping Support Project will finance a new interisland shipping terminal in the capital, Port Vila

The Interisland Shipping Support Project comprises two major components. The first is a series of shipping infrastructure investments across Port Vila and the outer islands. The second is the establishment of a shipping support scheme to help provide more services to remote destinations.

ADB has also strongly supported Vanuatu with disaster relief. Following Tropical Cyclone Pam in 2015, the bank provided immediate support by approving grant financing from the Asia Pacific Disaster Response Fund and the Japan Fund for Poverty Reduction. This was followed by the approval of subsequent recovery projects to reconstruct the country’s roads and schools. In 2017 and 2018, following the eruption of Manaro Volcano and the declaration of a state of emergency on Ambae Island, ADB provided two special assistance grants worth $0.7 million from the Asia Pacific Disaster Response Fund.

Mother and child at the Efate Port Vila market in Vanuatu

In health, ADB approved a $25.1 million package in 2018 to support the introduction of new vaccines in Vanuatu—as well as in Samoa, Tonga, and Tuvalu—through the System Strengthening for Effective Coverage of New Vaccines in the Pacific Project. Over 580,000 people across the four countries will benefit from the project, which will improve overall immunization rates and support greater efficiency of primary health services. Under the project, ADB committed a $2.25 million concessional loan and a $9 million grant for Vanuatu.

Under technical assistance through its Pacific Private Sector Development Initiative, ADB is helping to improve the business environment in Vanuatu and to drive inclusive economic growth led by the private sector. The assistance has included the modernization of Vanuatu’s commercial legal framework, the implementation of an electronic registry for personal property securities, and the introduction of an electronic company registry. Support has also been provided on state-owned enterprise policy and legislation.

Under the Pacific Region Infrastructure Facility, ADB helps provide Vanuatu with technical assistance, research, and knowledge products on key infrastructure issues. It also coordinates the infrastructure activities of principal development partners. In 2018, the facility carried out a study of Vanuatu’s solid waste and recycling industries to identify and quantify opportunities to improve waste management.

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 Vanuatu in 1992. Since then, sovereign cofinancing commitments for Vanuatu have amounted to $65.80 million for five investment projects and $3.46 million for six technical assistance projects.

Projects Cofinanced, 1 January 2014–31 December 2018

Operational Challenges

In the past, the sustainability of projects in Vanuatu has been fragile, with attention to administration often lacking and institutional capacity often inadequate. Upstream design work on projects has sometimes failed to incorporate lessons from previous implementations, and designs have remained complex and overly ambitious, with difficulties in tendering processes.

ADB assistance is now more focused—taking into account Vanuatu’s institutional capacities and political realities. The bank’s support is tailored to address the country’s critical constraints to inclusive growth and social development. This approach has provided the foundation to garner support from other development partners.

Future Directions

The ADB country operations business plan, 2020–2022 for Vanuatu will continue to support three priority sectors: energy, transport, and water and other urban infrastructure and services. Public sector management has also been identified as an important area for ADB involvement, and a budget support program is proposed for reforms that will improve Vanuatu’s economic resilience and generate inclusive growth.

Santo-Pekoa International Airport is located in Luganville, Espiritu Santo, Vanuatu.

ADB has approved project readiness financing for the Luganville Urban Water Supply and Sanitation Project to undertake detailed project design activities and reduce project implementation risks. The proposed project will improve Luganville’s water and sanitation infrastructure. Similar preparatory work has begun for the second phase of the Port Vila Urban Development Project.

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

Spotlight on Vanuatu

News Release

ADB Provides $1 Million in Relief for Vanuatu After Cyclone Harold

ADB today announced a $1 million grant to the Government of Vanuatu to help fund priority recovery activities following Tropical Cyclone Harold, which tore through the center of Vanuatu on 6 April.

News Release

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

The economies of the Cook Islands, Fiji, Palau, Samoa, and Vanuatu are the Pacific countries likely to feel the brunt of the COVID-19 pandemic, according to a new report by ADB released today.

Project Result / Case Study

Vaccinating in Vanuatu for a Healthier Future

A $15 million grant from an Asian Development Fund (ADF) 12 facility will reduce the burden of pneumonia and diarrhea in children and increase protection against the human papilloma virus in women.

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.