The World Bank has approved an additional US$9 million in financing to support the Republic of the Marshall Islands as it faces a severe energy crisis driven by rising global fuel prices. The new funding is aimed at protecting essential public services, stabilizing government finances, and supporting ongoing economic and resilience reforms.
The assistance is delivered through an existing development policy operation that was originally approved in July 2024 with US$21 million in financing. With this latest injection, total support under the program rises to US$30 million, including a portion of contingent financing reserved for potential future shocks or disasters.
The Republic of the Marshall Islands is heavily dependent on imported fuel, food, and essential goods, making it particularly vulnerable to global energy market disruptions. According to official estimates, fuel costs have tripled, increasing the import bill by around US$40 million, which represents a significant share of the country’s gross domestic product. The economic strain has also led to slower growth projections and rising inflation, putting pressure on households and public services.
Government officials have stated that the additional support will help maintain essential services while allowing ongoing fiscal and energy reforms to continue. The financing is intended to provide immediate budget relief while supporting long-term efforts to improve energy security and strengthen public financial management systems.
The crisis has affected multiple sectors of the economy, including fishing, which is a key source of revenue and employment. Higher transport and electricity costs are also impacting families across the islands, particularly in remote communities that rely heavily on imported goods.
Alongside emergency support, the World Bank is also investing in long-term energy transition initiatives in the country, including projects focused on expanding renewable energy generation and improving access to cleaner, more sustainable power sources.
