ADB and Cook Islands Sign $30M Loan to Strengthen Resilience and Sustainable Growth

New Program to Accelerate Fiscal and Public Sector Reforms, Address Labor Shortages, and Improve Environmental Management.

The Asian Development Bank (ADB) has entered into a $30 million loan agreement with the Government of the Cook Islands to bolster the nation’s resilience and foster sustainable growth. The agreement was officially signed at ADB Headquarters in Manila by ADB Alternate Executive Director Llewellyn Roberts and ADB Director General for the Pacific Leah Gutierrez.

The Cook Islands Resilient Transformation Program will comprise two policy-based concessional loans. The first loan, valued at $30 million, is set to be disbursed for subprogram 1 in fiscal year 2025, with an additional $30 million loan for subprogram 2 expected in fiscal year 2027. These loans aim to accelerate economic and public sector reforms, enhance fiscal resilience, and establish the Cook Islands' first sovereign wealth fund.

The Resilient Transformation Program focuses on comprehensive reforms that are vital for the Cook Islands’ long-term stability and prosperity. Key objectives of the program include:

Fiscal resilience: Strengthening the nation’s fiscal policies and frameworks to withstand future economic shocks.

Public sector modernization: Developing a fit-for-purpose public sector that can effectively address the country's development challenges.

Sovereign wealth fund: Establishing a sovereign wealth fund, an essential tool for managing the country’s natural resource wealth and ensuring future generations benefit from it.

Human capital development: Promoting a healthy and sustainable population through targeted reforms, which will also help alleviate labor shortages.

Environmental governance: Boosting reforms aimed at improving environmental management and ensuring sustainable governance practices.

According to Leah Gutierrez, ADB’s Director General for the Pacific, “ADB commends the Government of the Cook Islands for its ambitious reform agenda. The program will provide highly concessional financing and support vital reforms to help the country adapt to challenges in the public sector, labor market, and environmental management."

Strengthening Regional Partnerships and Cooperation

The program will be implemented in close collaboration with the Government of New Zealand and other development partners, ensuring a coordinated approach to the country’s transformation. This multi-stakeholder cooperation will be pivotal in ensuring that the reforms are aligned with broader regional priorities and sustainable development goals.

Long-Term Impact and Goals

The $30 million loan provided under the Cook Islands Resilient Transformation Program is a part of ADB's broader strategy to support small island developing states (SIDS) in their journey toward sustainability. With this partnership, the Cook Islands will gain access to concessional financing under ADB’s new lending terms for SIDS, designed to accommodate the unique challenges these nations face.

The program is designed to address constraints that hinder public and private sector development, ensuring that the Cook Islands can adapt to climate change, manage resources sustainably, and build a resilient economy that can thrive in the face of both internal and external shocks. By investing in these key reforms, the Cook Islands will be better equipped to ensure long-term economic growth, social stability, and environmental sustainability for its citizens.

The partnership between ADB, the Government of the Cook Islands, and New Zealand demonstrates a shared commitment to creating a resilient and prosperous future for this Pacific island nation.