21/07/2026
Vanuatu and UNDP Sign Agreement to Commence Climate-Resilient Road Investment in Malekula with an Initial USD 25 Million Government of Vanuatu Cash Co-financing & USD 3 Million GEF Grant
Port Vila, Vanuatu (July 21, 2026) – The Government of Vanuatu has formally committed USD 25 million (approximately VT 3 billion) in co-financing for the proposed Malekula Climate Resilient Road Infrastructure Project in Malampa Province, marking a significant step towards strengthening climate-resilient and sustainable transport infrastructure on the country’s second largest islands.
The Government, through the Ministry of Climate Change, Meteorology and Hydro-meteorological Services, Geological Hazards, Environment, Energy and Disaster Management, signed a memorandum of understanding (MOU) with the United Nations Development Programme to disburse and administer the cash co-financing under an agreed fiduciary arrangement.
The commitment includes USD 20 million in cash contributions and USD 5 million in in-kind support. The investment demonstrates the Government’s strong commitment to improving connectivity, enhancing resilience to climate impacts and supporting economic opportunities for communities across Malekula.
In response to the Government’s request, UNDP has proposed a phased approach to advance project preparation and financing arrangements.
The first phase focused on finalising and signing the MOU, enabling the receipt of an initial co-financing disbursement tranche in March 2027. This commitment is complimentary to a USD 3 million grant jointly mobilized by the Government of Vanuatu in partnership with UNDP in June 2026 through the Global Environment Facility (GEF).
Following this, UNDP will support the mobilisation of a qualified firm to undertake Pre-Feasibility Study. The study will assess the technical, economic, environmental and financial viability of the proposed road infrastructure investments and help inform subsequent project design and financing decisions to inform the mobilization of additional grant resources already earmarked with the Adaptation Fund and the GEF as well as a concessional facility through the Green Climate Fund (GCF).
Concurrently, UNDP will assess institutional options for pursuing the concessional loan component, including potential partnerships with accredited entities such as the Asian Infrastructure Investment Bank (AIIB) or the United Nations Capital Development Fund (UNCDF), as well as options for direct sovereign borrowing by the Government of Vanuatu.
Director General for the Ministry of Climate Change Adaptation, Meteorology, Geo-Hazards, Environment, Energy and Disaster Management, David Gibson said: “The Government’s substantial co-financing commitment reflects the importance of climate-resilient infrastructure for Vanuatu’s long-term development and resilience agenda. Investment in resilient roads is critical to ensuring reliable access to essential services.”
UNDP Deputy Resident Representative for the Pacific Office, Abduvakkos Abdurahmanov said:
“The proposed phased approach will help establish a strong evidence base for investment decisions while ensuring that financing arrangements are aligned with national priorities and international standards. Through this process, UNDP remains committed to supporting the Government of Vanuatu to develop resilient infrastructure solutions that strengthen climate adaptation and deliver sustainable benefits for communities.”
The Malekula Climate Resilient Road Infrastructure Project is expected to contribute to improved transport connectivity, increased resilience to extreme weather events and enhanced socio-economic opportunities for communities across Malekula, supporting Vanuatu’s broader sustainable development and climate resilience goals.
