ADB provides Tonga with US$6 million for COVID-19 assistance

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Nuku’alofa – April 16, 2020: 8pm (ADB): The Asian Development Bank (ADB) today announced the release of a US$6 million ($13.9 million pa’anga) grant from its Pacific Disaster Resilience Programme (Phase 2) to help finance the Government of Tonga’s response to the novel coronavirus disease (COVID-19) pandemic.

A state of emergency was declared in Tonga on 20 March in response to the COVID-19 pandemic. The public health emergency and closure of its borders have put pressure on Tonga’s health systems and the broader economy.

The government has announced a $60 million pa’anga short-term assistance program to combat COVID-19. ADB’s assistance will support the upgrading of local health care facilities; fund logistics to lock down the country’s border; and provide relief for the elderly, the unemployed, and vulnerable businesses such as tourism, retail, agriculture, and transport.

“The US$6 million grant will help take undue pressure off Tonga’s health systems,” said ADB Director General for the Pacific Leah Gutierrez. “This quick-disbursing financing will allow Tonga to respond rapidly to the challenges of the pandemic and help mitigate negative impacts on vulnerable sectors.”

In addition to this assistance, ADB on 7 April announced a US$470,000 grant from its Asia Pacific Disaster Response Fund to help finance the country’s response to the pandemic.

The Asian Development Outlook 2020 report forecast that the pandemic will severely hit tourism sectors, especially those in the South Pacific such as Tonga’s. ADB’s report says Tonga will see zero growth in 2020 due partly to a plunge in visitor arrivals.

The first phase of ADB’s Pacific Disaster Resilience Program was approved in December 2017 to help strengthen Samoa, Tonga, and Tuvalu’s resilience to disasters. Following Cyclone Gita in February 2018, Tonga drew down its available financing from the program within a few days of the disaster. The second phase, approved in September 2019, provided a second round of contingent disaster financing for Tonga, along with three new countries (the Federated States of Micronesia, the Marshall Islands, and Solomon Islands).

On 13 April, ADB extended the contingent disaster financing instrument to include health-related emergencies in the definition of natural hazards, allowing for the release of funds in response to the COVID-19 pandemic. The Pacific Disaster Resilience Program (Phase 2) fills a financing gap experienced by many Pacific countries hit hard by disasters. It provides a predictable and quick-disbursing source of financing for early response, recovery, and reconstruction activities.

Tonga’s US$6 million grant complements ADB’s $20 billion package—announced on 13 April—to support member economies as they cope with the COVID-19 pandemic. ADB is engaged in discussions with all its developing member countries, including those in the Pacific, on how best to utilize this support..

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