In Wake Of December Earthquake, World Bank Provides $30million Grant To Bolster Vanuatu’s Recovery And Resilience

Thursday, 16 January 2025, 11:44 am
Press Release: The World Bank

PORT VILA, January 16, 2025 – The
World Bank continues to support Vanuatu to recover from the
aftermath of last month’s devastating 7.3 magnitude
earthquake with an additional US$30 million of funding. This
new grant will provide US$20 million towards reconstruction
and response immediately while making available US$10
million in contingent financing that will enable rapid
access in the event of any future disaster or health
emergency. This assistance also supports reforms to ensure
fiscal stability, improve governance and transparency, and
bolster longer term resilience planning.

“We are
grateful for the World Bank’s swift response and ongoing
partnership,” said Vanuatu’s Caretaker
Minister for Finance and Economic Management, Hon. Johnny
Koanapo. “This assistance will provide
much-needed resources to help us recover from the recent
earthquake and strengthen our ability to face future
challenges. These funds are vital to protecting the people
of Vanuatu and supporting development.”

This
assistance adds to US$12 million in emergency World Bank
funding that was disbursed just days after the December 17,
2024 earthquake that devastated the capital, Port Vila. This
was made available through flexible, fast access to
financing which enabled Vanuatu to address immediate
recovery needs.

The World Bank has also conducted a
Global Rapid Post-Disaster Damage Estimation (GRADE),
providing critical insights on direct economic damage to
physical assets to inform recovery efforts and mobilize
additional financing. The GRADE report estimates that damage
from the earthquake accounts to US$197 million in direct
economic damages, which is equivalent to 17 percent of
Vanuatu’s 2023 GDP. The report also found that the damage
is disproportionately affecting poorer households and could
potentially push over 2,150 people into
poverty.

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“These grants, alongside our initial
emergency financing and rapid assessments of damage, will
help strengthen fiscal stability and bolster Vanuatu’s
resilience against future shocks,” said
Annette Leith, World Bank Resident Representative in
Vanuatu. “We will continue to work with the
government to ensure the country is best equipped to protect
its people and economy.”

In the longer term,
this assistance from the International Development
Association (IDA), the World Bank’s fund for the most
in-need countries, will help ensure fiscal stability by
improving governance processes while bolstering Vanuatu’s
capacity to prepare for and respond to natural disasters. It
also supports measures to improve institutional and policy
frameworks under Vanuatu’s Disaster Risk Management Act
including the enhancement of oversight during future
emergencies and the expansion of financing options for
disaster resilience.

Vanuatu faces exceptional
challenges as one of the world’s smallest, most remote,
and climate-vulnerable nations. The country’s
vulnerability to frequent shocks—including tropical
cyclones, earthquakes, and economic shocks— underscores
the need for robust fiscal and disaster management systems
that this operation will
support.

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