THE Asian Development Bank has approved $USD12.5 million in concessional financing for Palau to shore up public finances, improve disaster readiness and back sustainable growth.
The funding, approved under subprogram two of the Strengthening Fiscal Resilience for Sustainable Development Program, is designed to help Palau deepen reforms in public financial management, debt management, tax administration and domestic resource mobilisation, while also strengthening planning systems and trade facilitation.
“Palau has demonstrated continued strong leadership in advancing reforms that support fiscal sustainability, resilience to natural hazards, and long-term economic growth,” ADB North Pacific Advisor Aziz Haydarov said in a statement.
“This program will help strengthen the government’s institutions and systems that underpin sustainable development, while ensuring Palau is better equipped to respond to economic and environmental challenges.”
The program comes as Palau, a small island developing state in the western Pacific, seeks to consolidate a recovery from the COVID-19 pandemic, helped by a rebound in tourism and broader economic reforms.
ADB said the financing will support efforts to mobilise more funding for resilience initiatives and implement priority actions under Palau’s national development strategies.
It will also help the government carry out its updated climate policy, including natural hazard-responsive planning and budgeting, and support state governments in integrating resilience into land-use planning and development decisions.
The financing is expected to back the Palau Sustainable Tourism Strategy 2025-2028 as the country tries to balance economic growth with protection of its natural and marine resources.
Palau has positioned itself as a regional advocate for ocean conservation and sustainable tourism, and the ADB program is intended to reinforce that model by tightening fiscal governance and making public investment planning more resilient to extreme weather events and other shocks.
ADB, founded in 1966, is a multilateral development bank owned by 69 members, 50 from the Asia-Pacific region, that says it focuses on sustainable, inclusive and resilient growth across the region.
