World Bank Fast-Tracks US$12 Million to Vanuatu for Earthquake Recovery

Rapid Response Financing Supports Emergency Relief Efforts Following Devastating 7.3 Magnitude Earthquake.

The World Bank has swiftly approved US$12 million in emergency financing for the Government of Vanuatu in response to the catastrophic 7.3 magnitude earthquake that struck the country on December 17, 2024. This funding, made available through the World Bank’s new Rapid Response Option (RRO), aims to assist Vanuatu in its immediate recovery efforts, providing crucial resources to support the victims of the disaster.

The earthquake, which caused extensive damage to infrastructure and disrupted daily life, has left many people in need of shelter, supplies, and support. In response, the Government of Vanuatu, led by Caretaker Minister for Finance and Economic Management, Hon. Johnny Koanapo, is working to assess the full extent of the damage and mobilize relief efforts. The Minister emphasized that the support from the World Bank, combined with aid from other partners, is essential in ensuring the country has the necessary resources for a swift and effective response.

Rapid Response Option: Fast-Tracking Relief Efforts

The US$12 million grant is part of the World Bank’s Rapid Response Option (RRO), a flexible and expedited financing mechanism introduced as part of the Bank’s expanded Crisis Preparedness and Response Toolkit in June 2023. This new tool enables countries like Vanuatu to repurpose previously approved but unused financing to address immediate emergency needs.

Vanuatu is one of eight Pacific Island countries that have already signed up for the RRO, which can be activated in response to disasters like earthquakes, cyclones, and other crises. This fast-track process ensures that financial aid is available when it is most urgently needed, helping to mitigate the impact of natural disasters on vulnerable populations.

World Bank’s Commitment to Vanuatu’s Recovery

Stephen N. Ndegwa, World Bank Country Director for the Pacific and Papua New Guinea, expressed his sympathy for the loss of life and widespread devastation caused by the earthquake. He emphasized the significant economic impact the disaster will have on Vanuatu, particularly during the peak tourism season, and the damage to vital infrastructure in Port Vila. Ndegwa reaffirmed the World Bank’s commitment to helping Vanuatu rebuild and recover, particularly by restoring jobs and providing critical assistance to affected communities.

The US$12 million grant is part of the World Bank’s broader effort to assist Vanuatu in strengthening its disaster resilience. This includes ongoing projects aimed at improving the country's preparedness for future emergencies, such as standby financing and infrastructure development that focuses on making cities like Port Vila more resilient to future natural disasters. The World Bank has previously provided emergency assistance to Vanuatu, including financing following Severe Tropical Cyclones Judy and Kevin and a 6.5 Mw earthquake earlier in 2023.

Global Rapid Post-Disaster Damage Estimation (GRADE)

In addition to the RRO financing, the World Bank is conducting a Global Rapid post-disaster Damage Estimation (GRADE) to assess the full economic impact of the earthquake. This tool has been used in previous disaster responses to provide a comprehensive analysis of damages, which informs recovery planning and helps mobilize additional financial support.

The World Bank’s ongoing support for Vanuatu also includes efforts to strengthen disaster resilience through better infrastructure and preparedness measures. Notably, these efforts focus on rebuilding critical infrastructure, improving early warning systems, and supporting climate adaptation in vulnerable areas such as South Santo and the capital city, Port Vila.

No Repayment Obligations

The US$12 million grant comes from the International Development Association (IDA), the World Bank’s fund dedicated to the world’s poorest countries. Importantly, this grant carries no repayment obligations, allowing the Government of Vanuatu to concentrate on urgent recovery and rebuilding efforts without the burden of debt repayment.

The World Bank is also engaged in discussions with the Vanuatu government about additional support packages, including emergency budget support, to further assist the country in its recovery and long-term resilience building. This timely financing is crucial for the fast recovery of Vanuatu’s communities and economy as the nation works to rebuild in the aftermath of this devastating disaster.