ADB's Work in Nauru

As a single island measuring only 21 square kilometers, Nauru faces the challenge of developing new sources of economic growth amid significant resource constraints. The Government of Nauru’s income derives mainly from a regional processing center for asylum seekers, and revenues from selling fishing licenses.

The coronavirus disease (COVID-19) and associated trade and travel disruptions have affected Nauru’s supply chains, compounding challenges the country already faced because of its small size, distance from markets, and import dependence.

ADB has been supporting Nauru since 1991, and cooperation has focused on improving fiscal sustainability, critical infrastructure, and service delivery.

To date, ADB has committed 24 public sector loans, grants, and technical assistance totaling $109.4 million to Nauru. Cumulative loan and grant disbursements to Nauru amount to $43.98 million. These were financed by regular ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s ongoing sovereign portfolio in Nauru includes 4 grants worth $63.3 million.

ADB’s recent development efforts in Nauru have helped the government address the country’s considerable infrastructure needs, improve the delivery of essential services, strengthen fiscal sustainability, and improve the performance of state-owned enterprises.

The Sustainable and Climate-Resilient Connectivity Project is transforming the largely inoperable Aiwo boat harbor into Nauru’s first fully functioning international, climate-resilient port. The project is cofinanced by the Green Climate Fund and the Government of Australia, while the Government of Japan is providing equipment to support efficient operations. Pandemic-induced travel restrictions slowed implementation progress, but the port became operational in 2022 and is scheduled for completion in 2023. A technical assistance project is supporting institutional reforms to strengthen the Nauru Maritime and Port Authority’s capacity.

The Sustainable Urban Development Project aims to strengthen water supply, sanitation, and solid waste management, and to establish improved urban planning capacity in the country. ADB approved the project readiness financing of $5 million in 2021.

To support Nauru’s transition toward sustainable energy, the $22-million Solar Power Development Project is financing a solar power plant and battery storage system, and is strengthening the capacity of the Nauru Utility Corporation.

Through the planned Improving Fiscal Sustainability Program, ADB will help the Government of Nauru strengthen genderresponsive fiscal sustainability by implementing policy and institutional reforms to enhance fiscal and debt management, the governance of state-owned enterprises, social protection systems, and gender equality.

Frigatebirds are found across tropical and subtropical oceans. Frigatebirds catching is an important tradition in Nauru passed on by the elders to the next generation. Photo: Eric Sales/ADB/ADB

Operational challenges. Nauru’s geographic conditions and narrow economy impede donor support and inclusive development. The country’s small size and remoteness raise the cost of providing public infrastructure and services and limit economies of scale. At the same time, Nauru has a narrow economic base and is heavily reliant on imports, leading to high-cost structures.

ADB’s development approach in Nauru emphasizes the need for a consultative and flexible response, long-term and focused engagement, and the importance of capacity development. ADB provides technical assistance and coordinates closely with development partners to support national reforms and capacity building.

Knowledge Work

ADB has supported the Nauru Bureau of Statistics in strengthening governance and enhancing their capacity to produce economic data. This enables Nauru to utilize a wider evidence base when making future policy reforms and engaging in strategic decision-making. The ADB-supported Pacific Regional Infrastructure Facility is also helping the government to develop national building codes that will incorporate climate resilience considerations.

Future Directions

ADB will continue to support Nauru with investments that improve transport and renewable energy infrastructure and services. ADB is also preparing an urban development project, and will continue to support policy reforms to strengthen state-owned enterprise governance and fiscal sustainability.

Technical support through ADB’s country and regional programs will continue to provide flexible and responsive assistance to meet Nauru’s development goals to support a more sustainable growth trajectory.

Last updated: 3 May 2023