World Bank Approves $21M to Boost Climate Resilience in Marshall Islands

The initiative also aims to establish robust financial management and procurement processes to improve spending efficiency and enhance governance and administration.

The World Bank’s Board of Executive Directors has approved a new initiative to enhance fiscal management and improve disaster and climate resilience in the Republic of the Marshall Islands (RMI). With $21 million in grants, the Enhancing Fiscal Management and Building Disaster and Climate Resilience Development Policy Operation (DPO) aims to support critical reforms necessary for the country's long-term economic sustainability.

RMI faces significant long-term challenges due to climate change, population decline, and a limited private sector. The grants will help address these challenges and contribute to sustainable and resilient development in the country.

“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.”

RMI, a low-lying atoll nation, is among the world’s most climate-vulnerable countries, facing threats that heighten disaster risks and undermine poverty reduction and economic growth. This operation will support policy actions to manage climate change and natural hazards' impacts while providing access to prompt financing for catastrophic events.

The operation includes a $9 million development policy grant and a $12 million Catastrophe Deferred Drawdown Option (Cat DDO) development policy grant, which will be available for post-disaster efforts if an eligible catastrophic event occurs. This ensures that the country can quickly mobilize financing in response to emergencies such as typhoons, floods, droughts, and other climate-related hazards, as well as health-related emergencies.

The initiative also aims to establish robust financial management and procurement processes to improve spending efficiency and enhance governance and administration. It will support critical reforms, including adapting to sea level rise, implementing a modernized Disaster Risk Management Act—updated for the first time in over 35 years—and enacting new legislation to regulate the country’s first national building code. These reforms will enhance RMI’s resilience to natural and climate-related hazards and guide future development initiatives.

The operation aligns with the Republic of the Marshall Islands National Strategic Plan 2020-30, emphasizing government accountability and efficient resource allocation. It also supports RMI’s Paris Agreement climate commitments through policy actions aligned with the implementation of RMI's Climate Change Policy 2050, its Nationally Determined Contributions, and its 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, the Hon. David Paul. "Climate change poses an existential threat to the RMI, but this initiative is an important step to create a safer and more resilient future for Marshallese people.”