Tongans are set to benefit from a new phase of World Bank support designed to bolster public finances, enhance energy efficiency, and improve disaster preparedness. This initiative aims to strengthen fiscal sustainability and resilience against climate shocks and natural disasters.
The World Bank's Board of Executive Directors has approved this operation, which will back key government reforms. These reforms aim to improve public finances and ensure that early warning systems and emergency assistance reach those most vulnerable to natural hazards and climate shocks.
Tonga is one of the countries most at risk from disasters globally, with events such as the Hunga Tonga-Hunga Ha’apai eruption and frequent cyclones affecting lives, livelihoods, and infrastructure. The country's high fuel costs and limited tax base add further pressure on public finances and household budgets. The Tonga Second Fiscal, Disaster, and Climate Resilience Development Policy Operation seeks to address these issues by enhancing government systems and supporting investments that directly benefit communities.
The program includes measures to reduce inefficient tax exemptions and introduce energy efficiency standards. These changes aim to boost household purchasing power while decreasing reliance on expensive imported diesel. Additionally, it supports improvements in debt transparency and enhances early warning systems through legislation that enables disaster alerts via mobile phones, even in remote outer islands.
“This support from the World Bank will help Tonga to manage shocks more effectively and build a stronger foundation for sustainable growth,” said Hon. Dr. ‘Aisake Eke, Prime Minister of Tonga and Minister for Finance. “The reforms within the package will improve revenue mobilization, energy efficiency, and disaster preparedness so that our communities are better protected, and our economy is more resilient.”
New regulations for nationwide disaster alerts via mobile phones are expected to save lives by providing people—including women, children, and those in remote areas—more time to prepare or evacuate during emergencies. Improved debt reporting and revenue systems will also enable more efficient government investment in essential services like health care, education, and infrastructure.
These reforms are anticipated to benefit all Tongans by ensuring more reliable access to services, increased protection from climate-related risks, and a stable economic environment.
“Tonga continues to show leadership in putting long-term resilience and fiscal discipline at the heart of its development path,” said Stefano Mocci, World Bank Country Manager for the South Pacific. “These reforms will deliver real benefits for people especially the most vulnerable—and help ensure Tonga is better prepared for the future.”
This operation is funded through a US$12 million grant from the International Development Association (IDA), part of the World Bank’s fund dedicated to aiding countries most in need.