ADB's Work in the Cook Islands

The Cook Islands consists of 15 small islands scattered over an exclusive economic zone of 1.8 million square kilometers. The country is vulnerable to external shocks, including the impacts of climate change and natural hazards, and its economy is reliant on tourism. Cook Islanders have open access to work and residence in Australia and New Zealand, and the country is experiencing urban migration. The steady movement of people from the outer islands to the main island of Rarotonga, paired with migration overseas, is having cultural, social, and economic impacts.

Since 1976, ADB has committed 59 public sector loans, grants, and technical assistance totaling $223.2 million to the Cook Islands. Cumulative loan and grant disbursements to the Cook Islands amount to $157.95 million. These were financed by regular and concessional ordinary capital resources, and other special funds. ADB’s ongoing sovereign portfolio in the Cook Islands includes 3 loans worth $59.2 million.

The coronavirus disease (COVID-19) Active Response and Economic Support (CARES) Program helped the Government of the Cook Islands implement its countercyclical expenditure program and health response. To boost travel and tourism and support economic recovery, ADB is delivering the Supporting Safe Recovery of Tourism and Travel project, funded by a $2-million grant from the Japan Fund for Prosperous and Resilient Asia and the Pacific. ADB is also providing complementary technical assistance in the areas of infrastructure and asset management, public sector management, private sector development, financial services, renewable energy and energy efficiency, climate change safeguards, and capacity development.

The Cook Islands is highly vulnerable to disasters triggered by natural hazards and has periodically experienced major cyclones that have caused economic damages and loss of life. However, the Cook Islands currently has few options for accessing postdisaster financing, leaving it vulnerable to the impacts of disasters. To address this gap, ADB’s Pacific Disaster Resilience Program, Phase 3 provides for $20 million in disaster-contingent financing for early recovery and reconstruction activities in the wake of natural hazards or health emergencies.

ADB approved an $80-million policy-based loan for the Supporting Sustainable Recovery Program, including a $40-million precautionary financing option that allows for partial withdrawal if tourism does not rebound as forecasted before 31 December 2024. The precautionary financing option is designed to mitigate risks of future shocks to tourism by providing quick-disbursing funds in the wake of major adverse events or tourism downturns.

The Aitutaki Island. Aitutaki is also known as Araura, Ararau, and Utataki, and is one of most visited places in Cook Islands. Photo: Eric Sales/ADB

Operational Challenges. ADB remains fully committed to supporting the Cook Islands’ capital investments and engagement in the infrastructure sector, as an essential lever for supporting economic recovery. ADB, together with the government, recognizes the importance of debt sustainability and addressing the capacity constraints in key ministries.

ADB will continue to provide technical assistance in various sectors, including support for the Cash Management Committee and for economic modeling to assist the Ministry of Finance and Economic Management in evidence-based decision-making. Targeted technical assistance will help build local capacity while strengthening governance and public sector management. Additional technical inputs toward core services such as infrastructure planning will be critical in complementing ongoing stimulus efforts in the private sector.

Knowledge Work

ADB brings added value beyond project financing. It acts as a knowledge broker, engaging in regional issues such as climate change, ocean health, renewable energy, public financial management, and capacity development. The presence of an office in Rarotonga enables ADB to engage closely with the government and the private sector, as well as play a key role in regional cooperation and integration, and development partner coordination.

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