US$10 million World Bank support to help Vanuatu improve resilience,
and respond in the event of a major emergency
WASHINGTON, D.C., January 7, 2020 – The World Bank’s Board of Executive Directors has approved a contingent US$10 million in support to Vanuatu that will strengthen the island nation’s resilience to disasters, support climate adaption, and help manage its debt.
Vanuatu is considered to be one of the countries most at risk to natural disasters in the world. The new World Bank operation, which provides US$10 million that can be activated in the event of a major disaster, is supporting reforms that will deliver stronger risk mitigation and prevention actions in Vanuatu. These reforms are helping to shift Vanuatu’s disaster risk management system from a focus on response/emergency management, to a greater emphasis on risk reduction, climate adaptation and longer-term recovery.
The support has already led to the passage of a new Disaster Risk Management Act; one that is built around preparing for and responding to disasters on the national, provincial and local levels, as well as a National Land Subdivision Policy that takes a more comprehensive approach to risk reduction and climate adaption for land development across Vanuatu.
This is critical for key urban areas – such as in and around the capital, Port Vila, as well as in Luganville – where growth has led to larger concentrations of people living in hazardous areas, which can be at high risk during times of disaster; particularly those alongside rivers, steep slopes, and in coastal areas. The aim of the operation is to improve services in these areas and build measures to reduce loss of life and catastrophic damage in the event of a major natural disaster.
“This strong support from the World Bank is critical to increasing the resilience of our country to natural disasters, like what we experienced during Cyclone Pam,” said Vanuatu’s Minister of Finance and Economic Management, Gaetan Pikioune. “The financing and support for policy reforms provided by this operation will deliver short-, medium- and long-term benefits to all ni-Vanuatu.”
In addition, the operation aims to strengthen Vanuatu’s debt management through support for a new Debt Management Strategy. This will be particularly critical to ensure Vanuatu has the capacity to respond to future natural disasters and economic shocks. Vanuatu has seen a substantial increase in public debt following Category Five Tropical Cyclone Pam in 2015, which was one of the largest cyclones ever recorded in the South Pacific, causing damage and losses of around two-thirds (64%) of GDP.
“We all know that natural disasters remain an ever-present threat to Vanuatu. Being prepared for major disasters – before they strike – is one of the most effective ways to minimize their impacts,” said Michel Kerf, Country Director for the World Bank in Papua New Guinea and the Pacific Islands. “We’re proud to be delivering support to Vanuatu focused on saving lives, protecting homes and communities, and benefiting Vanuatu’s economy.”
The operation provides US$10 million in contingent grant support which can be used in the event of a major disaster or emergency, under a Catastrophe-Deferred Drawdown Option. The operation is funded through the International Development Association (IDA), the World Bank’s fund for the world’s most in-need countries.
With the addition of this new operation, and the completion of the major Vanuatu Aviation Investment Project at the end of 2019, the World Bank now has three active projects in Vanuatu totaling US$55 million in commitments across sectors including transport, energy and climate resilience and adaptation.
