In November 2022, the Government of Tuvalu needed urgent support following extreme drought conditions that left many communities facing water shortages and surging water borne disease. In less than 48 hours, the Asian Development Bank (ADB) disbursed a $4 million emergency grant to help the government mobilize urgent water supplies and desalinization equipment for remote communities.  

The growing use of fast and flexible contingent disaster financing is one example of how ADB’s Asian Development Fund (ADF) supports Pacific islands to alleviate the worst impacts of increasingly extreme weather and climate conditions. 

The Pacific region demonstrates to the world the urgency of climate action.  Climate change threatens to reverse decades of progress on poverty reduction and socioeconomic development. Pacific island communities are already experiencing its impacts in their daily lives. Over the last two years we have witnessed unprecedented droughts in Tuvalu and Kiribati, devastation caused by Category 5 cyclones in Vanuatu, major flooding events in Samoa and Fiji and the steady onslaught of rising sea levels causing coastal erosion, crop failure and community displacement. 

Compounding the depth of this challenge is the unparalleled pressure on national budgets as countries seek to recover from disasters and the fiscal and debt imbalances following the devastating shock of COVID-19.  

The economic losses from these impacts have been huge. Severe tropical cyclones alone have caused damage and losses equivalent to 34%–59% of annual GDP in the most extreme cases. Country-level analyses by the Pacific Catastrophe Risk Insurance Company yield average annual losses from earthquakes, tsunamis, and cyclones ranging from the equivalent of 1.6% of annual GDP in Palau to 6.6% of GDP in Vanuatu until 2060. The total average annual losses are almost $300 million, including $85 million for PNG and $79 million for Fiji.

The powerful message from Leaders at the Pacific Islands Forum Leaders Meeting last year was that sustainable development and poverty reduction cannot be achieved without a dramatic scaling up of resources for climate action.

The powerful message from Leaders at the Pacific Islands Forum Leaders Meeting last year was that  sustainable development and poverty reduction cannot be achieved without a dramatic scaling up of resources for climate action. ADB is determined to respond to that call to action as the Pacific region’s leading multilateral partner.

But to do so, we need the support of donors to ADF. In the coming weeks, these donors will seek agreement on a new replenishment of the fund’s resources, with a pledging session scheduled for the ADB’s annual meetings in May. ADB will do its part by making a significant commitment of the bank’s net income to ADF. But the overall ambition of the replenishment ultimately rests with its donors, whose grant contributions will determine the level of resources available to ADF recipients over the next three years. In short, the pledges our donors make have direct bearing on our ability to meet pressing needs in the Pacific along with those of other lower income countries across Asia.

As great as the harms have been from the pandemic and on-going climate shocks, we are also making real progress in the Pacific and are poised to make even greater gains with additional resources. ADF resources are already underpinning a scaling up of climate finance, with over $300 million in commitments for the Pacific Islands expected in 2024, up from $240 million in 2023. And we are putting these funds to good use.

A visit to Samoa just last week has reaffirmed my view that this ADF replenishment does not represent business as usual for our client countries.

In Samoa, I saw the early-stage development of a project to better manage flooding, which is occurring with greater frequency on the island. I also saw the progress at Apia Port, where an upgrade to the breakwater, alongside other greening measures, will better protect the harbor from dangerous king tides and other weather events. Government officials shared with me an ambitious pipeline of climate-resilient infrastructure projects and are eager to see what might be possible with new ADF money in the years ahead.

 The Pacific Islands have not contributed to the global climate crisis but more than any other region are suffering its consequences. As the world’s advanced economies have largely recovered from the economic losses of the pandemic period, there is a risk that they lose sight of just how damaging the ongoing effects of climate change are for these resource-constrained countries, most of which are still recovering economically and fiscally from the pandemic shock. 

The ADF, as the largest multilateral source of grant resources, also serves increasingly as the partner of choice for other aid providers, including governments like Australia and Japan as well as institutions like the World Bank and Green Climate Fund. Our partners in the Pacific will be watching the replenishment process closely in the lead up to May, but ultimately, it is our donors who will determine the scale of our ambition in the years ahead.