ADB's Work in Tuvalu

Tuvalu is a small island developing state comprising nine atolls in the South Pacific. It is geographically isolated and highly vulnerable to climatic and economic shocks. With a small private sector and limited resources, the public sector is its main driver of growth.

National income derives from fishing license fees, trust fund investments, official development assistance, dotTV domain name royalties, and remittances. Disasters triggered by natural hazards increase the country’s economic volatility and can substantially alter fiscal outcomes.

As of 31 December 2023, ADB has committed 46 public sector loans, grants, and technical assistance totaling $152 million to Tuvalu. ADB’s current sovereign portfolio in Tuvalu includes 9 grants worth $96.4 million.

Cumulative sovereign loan and grant disbursements to Tuvalu amount to $86.45 million. These were financed by concessional ordinary capital resources, and the Asian Development Fund, and other special funds.

Under the Pacific Disaster Resilience Program, Tuvalu was able to quickly access $3 million in January 2020, and another $4 million in November 2022 under phase 3 of the program, following disasters triggered by natural hazards. Phase 5 of the program, currently being prepared, will provide a $4-million disaster contingent financing grant for Tuvalu.

To improve the safety and efficiency of maritime transportation, ADB has committed $48.7 million in grant financing since 2016 for the construction of 3 boat harbors on 3 of Tuvalu’s outer islands. In 2022, ADB committed $30 million to further support the country’s regional connectivity by replacing the aging passenger and cargo ship, Manufolau, with a safe and energy-efficient vessel; replacing the worn-out fenders at the Funafuti International Port; and providing training for the Marine Department.

ADB committed $2.5 million in 2018 and $1.5 million in additional financing in 2021 for a new vaccines coverage project to provide support in securing and introducing rotavirus, pneumococcal, and human papillomavirus vaccines through pooled procurement by the United Nations Children’s Fund (UNICEF).

In 2020, ADB committed $4 million to help the Government of Tuvalu prepare for a major water and sanitation project in Funafuti to increase access to safe water and improve sanitation, and accordingly reduce the incidence of waterborne diseases in the capital. The ensuing project is planned for 2024.

In late 2019, ADB committed $6 million to increase access to renewable energy in Tuvalu, marking ADB’s first initiative in the country’s energy sector. The support will help modernize and automate the power systems in Funafuti and the outer islands. The bank committed another $7.8-million grant in 2023 to further help Tuvalu in expanding access to modern energy, including electric mobility, and enhancing climate adaptation capacity. The project includes installing the first marine floating photovoltaic system in the Pacific on the Funafuti Te Namo lagoon. It also involves electric vehicles, charging stations, and electric reefs to be maintained using electricity from the system.

Residents of Tuvalu enjoy the sea. Photo: Eric Sales/ADB

Operational challenges. The performance of ADB’s portfolio in Tuvalu can be hampered by limitations in the country’s policy development, program and project design and implementation, and management capacity.

The slow pace of improvements in fiscal management—including compliance with public procurement regulations, accounting practices, monitoring and reporting, and management of infrastructure investments—remains a key challenge to sound public financial management and operational effectiveness. Tuvalu’s Public Financial Management Roadmap for 2020–2024 guides the government and development partners in their efforts to address related issues and enhance coordination and implementation of critical reforms. Given the limited pool of local expertise, ADB and development partners continue to fill capacity gaps using international sources. Remoteness and unreliable air and sea services to and within Tuvalu also impact ADB operations.

Knowledge Work

ADB brings added value to its members beyond its role in project financing. ADB acts as a knowledge broker by helping its members engage in regional issues, including climate change and ocean health. ADB’s key flagship publications, such as the Asian Development Outlook and Pacific Economic Monitor, help with macroeconomic forecasting and assess economic and key topical issues to guide national policy development and decision-making.

  ADB Projects in Tuvalu Project data sheets for loans, grants, TAs

Future Directions

ADB’s Pacific Approach, 2021–2025 serves as the country partnership strategy for Tuvalu and focuses on building resilience against economic shocks, delivering sustainable services, and promoting inclusive and sustainable growth while recovering from the impacts of the coronavirus disease (COVID-19) pandemic. The approach aligns with the country’s National Strategy for Sustainable Development (Te Kete) 2021–2030.

ADB’s assistance program will focus on improving Tuvalu’s outer-island port facilities, building disaster resilience, scaling up access to renewable energy sources, improving water and sanitation, procuring and distributing COVID-19 and other new vaccines, and sustaining good fiscal management. Regional approaches to enhance energy efficiency, climate change, information and communication technology, and economic infrastructure will also be explored. Continuous engagement and on-the-ground presence are essential to project and program implementation. Continued close coordination with other development partners is also vital, including for mobilizing cofinancing.

Last updated: 2 May 2024