Vanuatu and ADB

ADB is contributing to Vanuatu’s recovery from the challenges posed by the COVID-19 pandemic and tropical cyclones through investments in physical and social infrastructure, disaster relief financing, and finance sector and public sector management reforms.

ADB's Work in Vanuatu

Vanuatu was affected by a series of severe tropical cyclones in March and October 2023. The cyclones caused extensive damage and contributed to existing supply chain constraints and high inflation, restricting overall economic activity and the growth outlook. While visitor numbers are recovering, they remain below pre-coronavirus disease (COVID-19) pandemic levels. Continued recovery in the tourism sector and post-disaster reconstruction efforts are expected to stimulate economic activity in 2024.

ADB continues to scale up its program in Vanuatu through increased Asian Development Fund (ADF) allocation and leveraging regional and thematic ADF grant resources to respond to Vanuatu’s increasing demands for grant resources for disaster response.

As of 31 December 2023, ADB has committed 100 public sector loans, grants, and technical assistance totaling $213 million to Vanuatu. ADB’s current sovereign portfolio in Vanuatu includes 3 loans and 9 grants worth $69.9 million.

Cumulative sovereign loan and grant disbursements to Vanuatu amount to $139.97 million. These were financed by concessional ordinary capital resources, the Asian Development Fund, and other special funds.

Throughout 2023, implementation of the Greater Port Vila Urban Resilience Project advanced. The project is improving urban resilience through capacity building, institutional strengthening, and the construction of 3 multipurpose emergency shelters. Similarly, designs for the Luganville Urban Water Supply and Sanitation Project are nearly completed. A feasibility study on planned maritime investments was also completed in 2023, funded by a $5-million grant from ADB that supports preparations for upcoming transport projects.

Significant physical progress was achieved in several ADB-supported projects in 2023. The Brenwe hydropower plant and the transmission grid extensions under the Energy Access Project were handed over to the Government of Vanuatu in December 2023. On maritime-related project developments, remediation works on the Lenakel and Litlitz wharves were also completed and work on South Paray will be concluded in 2024. The new vaccines coverage project in the Pacific continued to roll out new vaccines and build capacity in the health sector. Implementation of the COVID-19 pandemic response for affected poor and vulnerable groups in the Pacific began in mid-2023.

ADB provided a $1-million grant from the Asia Pacific Disaster Response Fund to support recovery efforts for the cumulative impacts of tropical cyclones Judy and Kevin in March and Lola in October, both in 2023.

ADB introduced more favorable concessional lending termsfor small island developing states in 2023, including Vanuatu, to meet infrastructure needs, strengthen social services, scale up climate action and disaster risk reduction, and assist in minimizing future debt-servicing obligations.

Photo: Asian Development Bank
A young boy watches a cruise ship arrive in Pentecost Island, Vanuatu. Photo: David Kirkland
 

Operational challenges. Vanuatu is among the world’s most vulnerable countries for disasters triggered by natural hazards. Its vulnerability stems from limited institutional and economic capacity. Political uncertainty, policy continuity, and project implementation are key challenges. Vanuatu also suffers from inadequate transport infrastructure, high transport costs, and irregular transport services. With a small domestic market, narrow economic base, and low economic diversification, creating an environment that fosters inclusive and environmentally sustainable growth remains a challenge. The impact of pandemic-related border closures in 2022 has caused significant delays and cost overruns in ADB projects, further highlighting Vanuatu’s dependence on international contractors. As confidence returns in the international travel market, domestic businesses have reported staff retention problems—a consequence of the labor mobility schemes established by neighboring countries.

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 AsianDevelopment Outlook and Pacific Economic Monitor, help with macroeconomic forecasting and assess economic and key topical issues to guide national policy development and decision-making.

With knowledge support and activities being demand-driven, ADB works closely with Vanuatu in identifying and responding to both country and regional knowledge needs. In Vanuatu, ADB is supporting the Vanuatu National Statistics Office to strengthen governance and enhance capacity to produce economic data that supports evidence-based decision-making.

The ADB-supported Pacific Region Infrastructure Facility published a study on Enhancing Procurement Practice and Local Content in Pacific Infrastructure. The Pacific Private Sector Development Initiative is working with several agencies to improve operations, financial sustainability, and investment management capability and provision of long-term domestic finance.

 

Shareholding and Voting Power

Number of Shares Held
708 (0.007% of total shares)

Votes
39,822 (0.299% of total membership, 0.46% of total regional membership)

*Overall capital subscription
$9.5 million

*Paid-in capital subscription
$470,000

*United States dollar figures are valued at rate as of 31 December 2023.


ADB Governor: John Dahmasing Salong MP
ADB Alternate Governor: Tony Amos Sewen ADB Director: Sangmin Ryu (Republic of Korea)
ADB Alternate Director: Damien Horiambe (Papua New Guinea)
ADB Director’s Advisors: Sun Young Jin (Republic of Korea) and Hsu-Juan Hou (Taipei,China)

Financing Partnerships

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

Cumulative cofinancing commitments in Vanuatu:

  • Sovereign cofinancing: $76.79 million for 7 investment projects and $3.46 million for 6 technical assistance projects since 1992

In 2023, Vanuatu received $6.25 million in grant cofinancing from the Government of New Zealand for the Interisland Shipping Support Project.

 

Future Directions

ADB’s Pacific Approach, 2021–2025 serves as the country partnership strategy for Vanuatu and focuses on building resilience against economic shocks, delivering sustainable services, and promoting inclusive and sustainable growth. The approach is aligned with the strategic priorities outlined in Vanuatu 2030—The People’s Plan, which places improved lives and livelihoods at its core. ADB’s operations will leverage the opportunities presented in the approach to implement economically productive project interventions, aligning closely with the goals of Vanuatu 2030.

A total of $8 million in grants has been committed to project readiness facilities with the goal of preparing high-quality project designs. ADB’s project portfolio in Vanuatu reflects the bank’s support in the areas of public financial management, transport, urban infrastructure, renewable energy, disaster risk management, water and sanitation, finance, and the health and education sectors.

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.

Last updated: 2 May 2024

Contacts

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

Vanuatu Pacific Country Office
Established: 2018
Level 5, Reserve Bank Building
Rue Emile Mercet
P.O. Box 246
Port Vila, Vanuatu
Tel: +678 20300
www.adb.org/countries/vanuatu
@ADB_Pacific
adbpacific

Ministry of Finance and Economic Management
Private Mail Bag 9058
Port Vila, Vanuatu
Tel: +678 23032

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