Asian Development Bank and World Bank Introduce Cofinancing Framework for Pacific Islands
Manila, December 4, 2025 – The Asian Development Bank (ADB) and the World Bank have launched two major projects in the Pacific Islands under a first-of-its-kind cofinancing model, designed to streamline lending processes and accelerate project delivery. The launch follows approval of the Full Mutual Reliance Framework, which allows one institution to act as the lead lender, reducing duplication and freeing resources for project implementation.
The model aims to tackle longstanding challenges faced by countries with limited institutional capacity, where much time is spent coordinating with multiple lenders rather than executing development initiatives.
Fiji Project: Modernizing Healthcare and Combating Non-Communicable Diseases
The first initiative is a $236.5 million project in Fiji, aimed at modernizing the nation’s primary healthcare system and constructing a regional hospital to address soaring rates of non-communicable diseases (NCDs) such as diabetes and heart disease.
Fiji’s Finance Minister Esrom Immanuel highlighted the urgency of the project, noting, “This initiative will improve the quality of care, reduce NCD prevalence, enable early detection, and deliver better health outcomes.” He emphasized that diabetes is the leading cause of death in Fiji, where an amputation occurs every 8.5 hours due to complications from the disease.
The project is expected to enhance early detection, improve patient outcomes, and strengthen Fiji’s healthcare infrastructure, providing a model for similar initiatives in other Pacific Island nations.
Tonga Project: Upgrading Infrastructure to Boost Resilience
The second project focuses on Tonga, where ADB and the World Bank will provide $120 million in grants to upgrade urban transport, water, and drainage systems. This initiative represents the largest-ever development partner-funded project in Tonga.
Key features include:
- Improvements to transport and drainage systems around the capital, Nuku’alofa
- Construction of a 720-meter bridge across a lagoon to ease congestion
- Enhanced disaster resilience, providing secure evacuation routes for tsunamis and other natural hazards
These infrastructure upgrades aim to strengthen urban resilience, improve connectivity, and ensure safer, more efficient transport and water systems for Tongan citizens.
Streamlining Development: The Full Mutual Reliance Framework
World Bank President Ajay Banga and ADB President Masato Kanda emphasized the importance of the cofinancing approach at a joint press conference. Banga noted that the framework enables multilateral development banks to operate more coherently, reducing duplication, saving time, and optimizing talent and financial resources for project execution.
The framework also serves as a proof of concept for how international financial institutions can collaborate efficiently, with plans underway to expand this model to other banks including the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the African Development Bank.
Future Prospects: Expanding Cofinanced Development Projects
According to Banga, about 20 additional cofinanced projects are already in the pipeline, spanning multiple sectors:
- Infrastructure
- Energy and clean technologies
- Agribusiness
- Healthcare systems
- Social protection programs
The cofinancing approach is expected to accelerate development outcomes, particularly in regions where administrative capacity is limited, ensuring that vital projects are delivered efficiently and effectively.
Conclusion
The launch of these projects in Fiji and Tonga marks a significant milestone in Pacific Islands development, demonstrating how innovative multilateral financing models can streamline project delivery, reduce duplication, and enhance effectiveness. By combining resources and expertise, the ADB and World Bank are providing a roadmap for coordinated international development efforts that can be replicated globally.
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