ADB's Work in Kiribati

Kiribati consists of 33 islands spread over 3.5 million square kilometers of ocean. Economic growth slowed from 2.4% in 2019 to 0.6% in 2020 as large infrastructure projects were delayed due to travel restrictions related to the coronavirus disease (COVID-19) pandemic. Modest growth continued in 2021 supported by the government’s social protection spending, increased household income, and domestic consumption. With the borders open, growth is expected to accelerate in 2022, supported by the COVID-19 pandemic measures including a vaccination program and the implementation of infrastructure projects. Although Kiribati is vulnerable to external shocks including pandemics and climate change, its sovereign wealth fund and government fishing revenues have helped insulate it from economic downturn associated with the COVID-19 pandemic.

ADB has been supporting Kiribati to build fiscal stability and upgrade infrastructure since 1974. Its engagement with Kiribati will continue to focus on transformative infrastructure investments — including sanitation, water supply, transport, renewable energy, and health infrastructure—and policy reforms through technical assistance initiatives.

To date, ADB has committed 61 public sector loans, grants, and technical assistance totaling $145.1 million to Kiribati. Cumulative loan and grant disbursements to Kiribati amount to $59.8 million. These were financed by concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s ongoing sovereign portfolio in Kiribati includes 7 grants worth $66.1 million.

From 2012 to 2020, ADB provided $22 million for a project in South Tarawa city that increased residents’ access to sanitation. In 2020, ADB committed $13 million for a water supply project in the city. With cofinancing by the Green Climate Fund and the World Bank for a total investment of $61.8 million, the project aims to develop water supplies from ground sources, harvest rainwater, and use solar-powered seawater desalination by reverse osmosis.

In 2020, ADB committed $12 million for a transport infrastructure investment project in the Outer Islands to enhance the efficiency and safety of maritime infrastructure. In the same year, ADB also provided $8 million for a renewable energy project in South Tarawa to help Kiribati reduce its dependency on diesel—introducing cleaner and cheaper renewable energy to the nation.

Boys playing at the beach in Tarawa, Kiribati. Photo: ADB

Operational challenges. Kiribati’s population of more than 100,000 people live on 21 islands. About half of its people live in Tarawa, the capital, making it one of the most densely populated areas in the world, with pervasive unemployment. Unfavorable weather conditions and population density have led to a lack of clean water and poor sanitation, exacerbating costly but preventable health issues, such as high infant mortality rates. Its geographical isolation raises the cost of doing business and public service delivery. Climate change is a slow progressive natural hazard causing coastal erosion, leading to inland migration and displacement of the population, and creating limited land space for development.

COVID-19-related border closures further limit progress of development projects and prospects for growth. Challenges in governance, business regulations, access to credit to support private sector development, and the chronic shortage of expertise and technologies continue to hamper Kiribati’s ability to achieve the development objectives set out in Kiribati’s Vision 2016–2036.

COVID-19 Response

In 2020, ADB committed a $1.5 million grant from the Asia Pacific Disaster Response Fund to help the country finance its COVID-19 pandemic response. In addition, the third phase of an ADB program for disaster resilience in the Pacific will provide an $8 million disaster contingent financing grant for early recovery and reconstruction activities following disasters caused by natural hazards or health emergencies.

Knowledge Work

ADB brings added value beyond its important role in project financing. ADB has supported economic policy reforms—building and supplementing capacity to drive improvements in areas that include state-owned enterprise performance, budgeting, and debt management. ADB acts as a knowledge broker, engaging in regional issues, including climate change and ocean health. ADB’s knowledge base continues to develop, easing the flow of ideas and lessons across subregions and sectors. The presence of an office in Kiribati enables ADB to play a key role in regional cooperation and integration and development partner coordination.

  ADB Projects in Kiribati Project data sheets for loans, grants, TAs

Future Directions

The Pacific Approach, 2021-2025 is ADB’s 5-year country partnership strategy for the 12 smallest Pacific developing member countries, including Kiribati. The strategy has three pillars that focus on preparing for and responding to shocks, delivering sustainable services, and supporting inclusive growth. While each country has its own development priorities, the shared common goals include supporting human development and health, mitigating and adapting to climate change, strengthening infrastructure, improving governance, and increasing gender equality. This operational focus aligns with Kiribati’s Vision 2016–2036.

ADB assistance to Kiribati will focus on long-term investments to improve water supply, outer-island maritime infrastructure, renewable energy, disaster-resilient programs, and health infrastructure and system improvement programs. ADB will continue to strengthen capacity on public sector management, for sound economic management and implementation of state-owned enterprise reforms.