ADB's Work in Solomon Islands

Solomon Islands covers about 28,000 square kilometers of Melanesia in the South Pacific, with around 75% of the population residing in rural areas. The Asian Development Bank (ADB) has been providing support to the country since 1973, with assistance reflecting government priorities in infrastructure development, tax reform, public sector management, urban planning and development, and disaster risk management.

As the country’s economy recovers from the impacts of the coronavirus disease (COVID-19) pandemic, prospects rest primarily in the mining, agriculture, fishing, and tourism sectors. In 2020, ADB committed $20 million to the COVID-19 Rapid Response Program to support the economy and, through Phase 3 of the Pacific Disaster Resilience Program, ADB will provide a $5 million contingent disaster financing grant for early recovery and reconstruction activities following disaster triggered by natural hazards or health emergencies.

To date, ADB has committed 118 public sector loans, grants, and technical assistance totaling $406.1 million to Solomon Islands. Cumulative loan and grant disbursements to Solomon Islands amount to $209.5 million. These were financed by concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s ongoing sovereign portfolio in Solomon Islands includes 4 loans and 9 grants worth $154.6 million.

In 2021, ADB committed a $5.5 million grant to boost domestic resource mobilization and $10 million in cofinancing from Australia and New Zealand to support tax reform. ADB also provided additional financing of $4.6 million to improve urban water supply and sanitation and a multitranche finance facility comprising a $74.4 million loan and $74.5 million grant that will construct roads and wharves, with a first tranche committed at $24.4 million in concessional loan and $19.5 million in grant.

ADB supports the Government of Solomon Islands’ National Transport Plan, which seeks to rehabilitate critical transport infrastructure, through a concessional loan of $21 million. ADB has also committed a $12 million grant and $18 million in concessional financing for a project that will supply electricity generated from renewable energy sources to the capital, Honiara. ADB’s $7.9 million grant supports the implementation of grid-connected solar power plants in five provinces.

In 2019, ADB committed $37 million, and $3 million in project readiness financing to improve water and sanitation efficiency, accessibility, and sustainability in urban and peri-urban areas. ADB also committed $16.9 million to the University of the South Pacific to finance the expansion of the university campus in Honiara.

Rose Mae, Dmah Russell, Juniah Laurere own a pineapple stall next to an ADB funded road project on the outskirts of Honiara. Photo: Luis Enrique Ascui/ADB

Operational Challenges. Solomon Islands is distant from major markets, and transport infrastructure and services are weak. At the same time, the country is vulnerable to natural hazards, and poverty is widespread—characterized by a lack of access to essential services and income-earning opportunities. Creating an environment that fosters inclusive and environmentally sustainable growth remains a challenge, considering that the country has a small domestic market, narrow economic base, and low economic diversification based on agricultural and unsustainable logging as its primary export industry.

Solomon Islands continues to exhibit characteristics of a fragile state and lacks the capacity to provide many of the basic drivers to reduce poverty. COVID-19 and related government-imposed trade and travel restrictions impede the movement of equipment, materials, and workers from overseas, which negatively affects project implementation.

Knowledge Work

Solomon Islands faces capacity constraints and knowledge gaps affecting public sector management, private sector development, and gender equality. In 2021, the Private Sector Development Initiative published a study that benchmarks women’s business leadership across the Pacific, including a country profile for Solomon Islands. The ADB-supported Pacific Region Infrastructure Facility is assisting the government in updating the Solomon Islands National Infrastructure Investment Pipeline, which outlines significant infrastructure developments in economic and social sectors that are of the highest priority for the government.

  ADB Projects in Solomon Islands Project data sheets for loans, grants, TAs

Future Directions

ADB’s planned support for Solomon Islands aligns with the government’s strategic focus on increased infrastructure development, tax reform, prudent financial management, and strengthening basic health services and education. Substantial investments in the transport sector will improve road and maritime infrastructure in Honiara and the provinces and contribute to better connectivity and economic activity. Investments in social infrastructure will improve health services and create health resilience, while a planned education sector project will support climate-smart citizens and increase students’ employability. A solid waste management project will improve urban service delivery and the quality of life in Honiara. A tax reform project and support to improve public financial management practices will increase domestic revenue mobilization and improve the country’s fiscal situation.