The Asian Development Bank (ADB) has approved $20 million in financing to strengthen fiscal sustainability and enhance Vanuatu’s disaster response capabilities. The package includes a $10 million policy-based grant to support reforms in domestic resource mobilization, public expenditure, and state-owned enterprise (SOE) management, alongside a $10 million multi-year contingent disaster financing (CDF) with a replenishment option under the Enduring Fiscal Position Program. This integrated approach aims to boost fiscal resilience while ensuring rapid and effective access to resources during disasters and health emergencies.
ADB Regional Director Jyotsana Varma highlighted that the Government of Vanuatu has already undertaken key reforms to improve fiscal resilience and SOE performance. The new program will build institutional capacity, strengthen fiscal sustainability, and enable a faster, more effective disaster response, reflecting Vanuatu’s commitment to comprehensive reform.
The program focuses on three main areas. First, it enhances fiscal policy by broadening the revenue base, improving public expenditure efficiency, and strengthening debt management practices. Second, it reinforces oversight and risk management of SOEs and public–private partnerships, supported by the Commercial Government Business Enterprise Act 2025, which governs the operation and regulation of commercial SOEs to improve transparency, accountability, and service delivery. Third, the CDF supports disaster resilience frameworks, including a digital health strategy to maintain healthcare continuity during disasters and mitigate health impacts from environmental shocks, vector-borne, and waterborne diseases. The CDF ensures rapid and flexible budget support immediately after disasters while fostering long-term resilience through linked policy reforms and technical assistance.
The $20 million financing is funded through ADB’s Asian Development Fund, which provides grants to the region’s most vulnerable countries. Between 2021 and 2024, the fund helped 384,000 people escape poverty and created around 500,000 jobs. Additional cofinancing is provided by Australia, New Zealand, and the World Bank.
ADB, founded in 1966 and owned by 69 members, is a leading multilateral development bank dedicated to promoting inclusive, resilient, and sustainable growth across Asia and the Pacific. The Bank works with governments and partners to address complex challenges, leveraging innovative financing and strategic partnerships to transform lives, develop quality infrastructure, and safeguard the environment.
