US25 million grant to enhance Tonga's climate resilience [1]
Wednesday, January 24, 2024 - 01:06
Tonga will receive a USD $25 million (TOP $58.7 million) grant from the World Bank to strengthen financial and debt sustainability to enhance climate and disaster resilience.
January marks two years since the catastrophic Tonga Hunga-Tonga-Hunga-Ha’apai volcanic eruption, which produced a tsunami and ashfall that directly affected at least 85,000 Tongans, and caused damages of about US$90.4 million (TOP$208 million); equivalent to approximately 18.5% of Tonga’s GDP.
Tonga continues to face increasing challenges caused by climate change and severe weather events, said the Minister of Finance Hon. Tiofilusi Tiueti.
Tonga’s government has made a priority to strengthen fiscal, disaster, and climate resilience to improve Tonga’s growth and development prospects.
“This support will boost our government’s and our communities’ resilience to future shocks and ensure we’re better able to respond to and recover from disasters,” Hon. Tiofilusi Tiueti said.
The Tonga First Fiscal, Disaster, and Climate Change Resilience Development Policy Operation with a Catastrophe Deferred Drawdown Option (Cat DDO) was approved by the World Bank’s Board of Directors.
The Cat DDO includes a development policy grant of USD $5million (TOP$11.7 million) and an option to immediately access USD $20 million (TOP$47 million) in the event of a major crisis or disaster caused by weather (such as a tropical cyclones or floods), seismic activity (such as a volcano or earthquake), or a health emergency.
“This grant will support Tonga in enhancing its social protection systems and working toward greater economic prosperity and more resilient communities,” said World Bank Manager for the South Pacific, Stefano Mocci.
The World Bank operation supports government initiatives to improve domestic revenue mobilization, reduce national debt, and enhance resilience to climate change and natural disasters.
The operation also prioritizes the development of more robust National Disaster Response Management plans to ensure quicker and more efficient delivery of emergency assistance after severe weather events.
This grant is funded through the International Development Association (IDA), the World Bank’s fund for the world’s most in-need countries.