ADB's Work in Kiribati

Kiribati consists of 33 islands spread over 3.5 million square kilometers of ocean. Its economy has enjoyed sustained growth—averaging annual gross domestic product growth of 4.1% from 2015 to 2019—bolstered by public spending on infrastructure and government revenue from fishing licenses. Although Kiribati is physically vulnerable to external shocks (including pandemics and climate change), its sustained fishing revenues and low reliance on international tourism have helped insulate it from the economic impacts of the coronavirus disease (COVID-19) pandemic.

Aerial view of Kiribati.

ADB has been supporting Kiribati to build fiscal stability and upgrade infrastructure since 1974. Core areas of ongoing support include helping to reduce poverty, improve the business climate and create economic opportunities, enhance disaster resilience and fiscal sustainability; and upgrade infrastructure, including sanitation, water supply, transport, and renewable energy assets.

Since 1974, ADB has committed loans amounting to $34.1 million, grants totaling $90.8 million, technical assistance worth $18.5 million, and ADB-administered cofinancing of $56 million for Kiribati.

The South Tarawa Sanitation Improvement Sector Project will improve sanitation infrastructure, sewerage and maintenance capacity, and public hygiene.

To enhance the efficiency and safety of maritime infrastructure, ADB committed $12 million for the Outer Islands Transport Infrastructure Investment Project in 2020. In addition to capital investments, the project supports the upgrading of navigational charts for safe maritime transport.

ADB also committed $8 million in 2020 for the South Tarawa Renewable Energy Project. The project assists Kiribati in reducing its dependency on diesel and introducing cleaner and cheaper renewable energy.

ADB has also disbursed grants totaling $7.5 million to help improve Kiribati’s economic and public sector management. This assistance has helped the Government of Kiribati enhance revenue measures, maintain expenditure restraint, and implement structural reforms.

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 Kiribati in 1995. Since then, sovereign cofinancing commitments for Kiribati have amounted to $149.32 million for eight investment projects, and $4.64 million for seven technical assistance projects.

In 2020, Kiribati received a total of $77.29 million grant cofinancing from the Government of New Zealand, the Green Climate Fund, the Strategic Climate Fund, and the World Bank, for three investment projects.

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

Operational Challenges

Kiribati needs significant resources to invest in infrastructure and address social challenges. The population of about 100,000 lives on 21 different islands, many of which are vast distances from each other. South Tarawa is home to almost half the total population and is one of the most densely populated areas in the world. Residents endure a lack of clean water and poor sanitation, exacerbating costly but preventable health issues. Kiribati’s geographic isolation—both between islands and from the rest of the world—raises the cost of development and public service delivery, leading to infrastructure gaps that severely limit opportunities for private sector development. Economic activity primarily consists of fisheries and copra, with the latter heavily subsidized as social support for isolated populations on remote islands. Weaknesses in governance, business regulations, and access to credit—due to the lack of expertise and technologies—exacerbate Kiribati’s geographic challenges.

Solar street lighting installed in major roads in Tarawa

Future Directions

ADB assistance to Kiribati focuses on improving outer island maritime facilities, building disaster resilience, promoting renewable energy sources, extending immunization coverage including COVID-19 related assistance, and sustaining good fiscal management. This operational focus aligns with Kiribati’s Vision 2016–2036.

Well-focused technical assistance will help strengthen Kiribati’s capacity in public sector management for sound economic management and implementation of state-owned enterprise reforms. Where appropriate, ADB will include Kiribati in new regional technical assistance activities in line with the Regional Operations Business Plan for the Pacific, 2021–2023. Regional approaches to energy efficiency, climate change, and economic infrastructure will be explored. Support for infrastructure planning will be provided by the ADB-administered Pacific Region Infrastructure Facility and support for improving business environments provided through the ADB-administered Private Sector Development Initiative.