The World Bank’s Board of Executive Directors has approved a new support package aimed at strengthening fiscal management and enhancing disaster and climate resilience in the Republic of the Marshall Islands (RMI). The initiative, valued at US$21 million in grants, seeks to address long-term challenges posed by climate change, population decline, and a limited private sector.
“This is the first operation of its type in the Republic of the Marshall Islands and it comes at a critical time to support the country’s resilience and sustainable development,” said World Bank Resident Representative for the North Pacific Omar Lyasse. “It complements other World Bank-financed projects in the Marshall Islands on fiscal management, urban resilience, and climate adaptation, and supports a robust policy framework to meet the country’s national development goals and international commitments.”
As one of the world’s most climate-vulnerable nations, RMI faces threats that exacerbate disaster risks and undermine poverty reduction efforts. The new operation aims to manage these impacts while providing access to prompt financing for catastrophic events. This includes a US$9 million development policy grant and a US$12 million Catastrophe Deferred Drawdown Option (Cat DDO) development policy grant.
The funding will support post-disaster efforts if an eligible catastrophic event occurs, ensuring rapid mobilization of resources in response to emergencies such as typhoons, floods, droughts, or health-related crises. Additionally, it aims to establish efficient financial management processes to enhance governance within RMI.
Critical reforms supported by this initiative include adapting to sea level rise, modernizing disaster risk management legislation—updated for the first time in over 35 years—and enacting new building code regulations. These measures are designed to bolster RMI's resilience against natural hazards.
The operation aligns with RMI's National Strategic Plan 2020-30 by emphasizing government accountability and resource allocation efficiency. It also supports RMI’s Paris Agreement commitments through aligned policy actions with RMI's Climate Change Policy 2050, Nationally Determined Contributions (NDCs), and National Adaptation Plan.
“This support will help our government address critical needs across a range of priorities including climate and disaster resilience,” said Minister of Finance for the Republic of the Marshall Islands David Paul. "Climate change poses an existential threat to RMI but this initiative is an important step toward creating a safer future for Marshallese people.”