World Bank Provides Additional $30M to Aid Vanuatu’s Earthquake Recovery and Boost Resilience

Grant to Support Immediate Reconstruction, Long-Term Disaster Preparedness, and Fiscal Stability.

The World Bank has stepped up its support for Vanuatu in the aftermath of the devastating 7.3 magnitude earthquake that struck last month. With an additional US$30 million in funding, the grant will allocate US$20 million for immediate reconstruction and response efforts, while US$10 million will be made available as contingent financing for rapid access during future disasters or health emergencies.

This funding complements US$12 million in emergency assistance disbursed days after the December 17, 2024 earthquake, which left significant damage across the capital, Port Vila, and surrounding areas.

Swift Response and Long-Term Vision

“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.”

The World Bank conducted a Global Rapid Post-Disaster Damage Estimation (GRADE) report to assess the earthquake’s impact. The report estimates US$197 million in direct economic damages to physical assets—equivalent to 17% of Vanuatu’s 2023 GDP. Additionally, it warns that the disaster could push over 2,150 people into poverty.

Strengthening Resilience and Fiscal Stability

The new funding supports reforms aimed at improving governance, ensuring fiscal stability, and enhancing disaster preparedness. Annette Leith, World Bank Resident Representative in Vanuatu, emphasized the multi-faceted nature of the assistance.

“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 Ms. Leith. “We will continue to work with the government to ensure the country is best equipped to protect its people and economy.”

The funds will also support measures under Vanuatu’s Disaster Risk Management Act, including enhanced oversight during emergencies, improved institutional frameworks, and expanded disaster resilience financing options.

Meeting Immediate and Long-Term Challenges

The initial US$12 million in emergency funding provided fast access to resources that addressed urgent recovery needs, such as clearing debris, restoring essential services, and assisting affected communities. The additional US$20 million will fund further reconstruction, including rebuilding schools, healthcare facilities, and homes. It will also help strengthen infrastructure to withstand future disasters.

The US$10 million in contingent financing ensures Vanuatu has immediate resources to respond to future shocks, whether natural disasters or health crises.

Addressing Vanuatu’s Unique Vulnerabilities

As one of the world’s smallest, most remote, and climate-vulnerable nations, Vanuatu faces a unique set of challenges. The country’s susceptibility to tropical cyclones, earthquakes, and economic shocks underscores the importance of robust disaster management systems and fiscal resilience.

Global Support and Partnership

This initiative is funded through the International Development Association (IDA), the World Bank’s fund for the world’s most in-need countries. It aligns with global efforts to support small island nations in building climate resilience and reducing vulnerability to external shocks.

Future Outlook

The World Bank’s comprehensive approach, which includes immediate disaster response and long-term institutional strengthening, aims to ensure Vanuatu is better prepared for future challenges. This support will not only aid recovery from the current earthquake but also lay the foundation for a more resilient and sustainable future for the country and its people.