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 direct damages from the earthquake accounts to US$197 million, which is equivalent to 17 percent of Vanuatu's 2023 GDP. The report also found that the disaster could potentially push over 2,150 people into poverty.
"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.
