FOR OFFICIAL USE ONLY
Report No: ICR00006529
IMPLEMENTATION COMPLETION AND RESULTS REPORT
IDA GRANT D524-VU
ON A GRANT FROM THE INTERNATIONAL DEVELOPMENT ASSOCIATION
IN THE AMOUNT OF SDR 7.3 MILLION
(US$10 MILLION EQUIVALENT)
TO THE
REPUBLIC OF VANUATU
FOR THE
VANUATU DISASTER RISK MANAGEMENT DEVELOPMENT POLICY GRANT WITH A
CATASTROPHE-DEFERRED DRAWDOWN OPTION (CAT-DDO) (P168749)
June 10, 2024
Urban, Resilience and Land Global Practice
East Asia and Pacific Region
This document has a restricted distribution and may be used by recipients only in the performance of
their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
CURRENCY EQUIVALENTS
(Exchange Rate Effective June 30, 2023)
Currency Unit = Vanuatu Vatu (VUV)
VUV 119= US$1
US$1.33 = SDR 1
GOVERNMENT FISCAL YEAR
January 1 – December 31
Regional Vice President: Manuela V. Ferro
Country Director: Stephen N. Ndegwa
Regional Director: Anna Wellenstein
Practice Manager: Ming Zhang
Task Team Leader(s): Tevi Maltali Obed, Artessa Saldivar-Sali, Kim Alan Edwards
ICR Main Contributor: Vica Rosario Bogaerts
The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
ABBREVIATIONS AND ACRONYMS
CAT-DDO Catastrophic-Deferred Drawdown Option
CCA Climate Change Adaptation
CCDRR Climate Change and Disaster Risk Reduction
CDC Community Disaster Committee
DG Director General
DMU Debt Management Unit
DPO Development Policy Operation
DRM Disaster Risk Management
DRR Disaster Risk Reduction
DSA Debt Sustainability Analysis
ECP Economic Citizen Program
EPR Emergency Preparedness and Response System
GDP Gross Domestic Product
GoV Government of Vanuatu
ICR Implementation Completion and Results Report
IMF International Monetary Fund
LDC Least Developed Country
LMPC Land Management Planning Committee
NDC National Disaster Committee
NDRF National Disaster Recovery Framework
NRC National Recovery Committee
NSDP National Sustainable Development Plan
MDCCC Municipal Disaster and Climate Change Committee
MFEM Ministry of Finance and Economic Management
MoCCA Ministry of Climate Change Adaptation
MoLNR Ministry of Land and Natural Resources
MTDS Medium-Term Debt Management Strategy
PDCCC Provincial Disaster and Climate Change Committee
PDNA Post-Disaster Needs Assessment
PDO Program Development Objective
PFM Public Financial Management
PCRAFI Pacific Catastrophe Risk Assessment and Financing Initiative
PIC Pacific Island Country
PPG Public and Publicly Guaranteed
ROC Recovery Operations Committee
RPF Regional Partnership Framework
SCD Systematic Country Diagnostic
The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
TA Technical Assistance
TC Tropical Cyclone
WBG World Bank Group
The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
TABLE OF CONTENTS
DATA SHEET ........................................................................................................................... 1
I. PROGRAM CONTEXT AND DEVELOPMENT OBJECTIVES ................................................ 5
II. ASSESSMENT OF KEY PROGRAM DESIGN AND OUTCOMES .......................................... 9
III. OTHER OUTCOMES AND IMPACTS ............................................................................. 18
IV. BANK PERFORMANCE ................................................................................................ 19
V. RISK TO SUSTAINABILITY OF DEVELOPMENT OUTCOMES ........................................... 21
VI. LESSONS AND NEXT PHASE ........................................................................................ 21
ANNEX 1. RESULTS FRAMEWORK ......................................................................................... 24
ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION PROCESSES...... 28
ANNEX 3. BORROWER, CO-FINANCIERS, AND OTHER DEVELOPMENT
PARTNERS’/STAKEHOLDERS’ COMMENTS ............................................................................ 31
ANNEX 4. SUPPORTING DOCUMENTS ................................................................................... 33
The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
.
.
DATA SHEET
BASIC INFORMATION
Product Information
Project ID Program Name
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-
P168749
Deferred Drawdown Option (CAT-DDO)
Country Financing Instrument
Vanuatu Development Policy Lending
DPF Options
Programmatic Regular Deferred Drawdown Option Catastrophic Deferred Drawdown Option
No No Yes
Crisis or Post Conflict Sub-National Lending Special Development Policy Lending
No No No
Organizations
Borrower Implementing Agency
Ministry of Finance and Economic Management,
Republic of Vanuatu Department of Strategic Policy, Planning and Aid
Coordination
Program Development Objective (PDO)
Program Development Objective (PDO)
The Program Development Objective (PDO) is to enhance the Recipient's regulatory framework and institutional
capacity to: (i) manage and reduce the risks from natural disasters and climate change; and (ii) manage public debt.
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
PROGRAM FINANCING DATA (USD)
FINANCE_TBL
Approved Amount Actual Disbursed
World Bank Administered Financing
10,000,000 9,925,810
IDA-D5240
Total 10,000,000 9,925,810
KEY DATES
Concept Review Decision Review Approval Effectiveness Original Closing Actual Closing
02-Apr-2019 30-Jul-2019 07-Jan-2020 03-Mar-2020 30-Jun-2023 30-Jun-2023
RATINGS SUMMARY
Program Performance
Overall Outcome Relevance of Prior Actions Achievement of Objectives (Efficacy)
Moderately Satisfactory Satisfactory Moderately Satisfactory
Bank Performance
Moderately Satisfactory
RATINGS OF PROJECT PERFORMANCE IN ISRs
Actual
No. Date ISR Archived DO Rating IP Rating Disbursements
(US$M)
01 29-Jun-2023 Satisfactory Satisfactory 9.93
SECTORS AND THEMES
Sectors
Mitigation Co- Adaptation Co-
Major Sector/Sector (%)
benefits (%) benefits (%)
SECTOR0 TBL
Public Administration 100 0.00 83.00
Other Public Administration 100 0 83
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
Themes
Major Theme/ Theme (Level 2)/ Theme (Level 3) (%)
Finance 33
Finance for Development 33
Disaster Risk Finance 33
Human Development and Gender 33
Gender 33
Disease Control 1
Pandemic Response 1
Urban and Rural Development 67
Rural Development 33
Land Administration and Management 33
Disaster Risk Management 67
Disaster Response and Recovery 33
Disaster Risk Reduction 33
Disaster Preparedness 33
Flood and Drought Risk Management 33
Environment and Natural Resource Management 83
Climate change 83
Adaptation 83
ACCOUNTABILITY AND DECISION MAKING
Role At Approval At ICR
Regional Vice President: Victoria Kwakwa Manuela V. Ferro
Country Director: Michel Kerf Stephen N. Ndegwa
Director: Benoit Bosquet Anna Wellenstein
Practice Manager: Abhas Kumar Jha Ming Zhang
Artessa Saldivar-Sali, Tevi Maltali
Task Team Leader(s): Tevi Maltali Obed
Obed
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
.
Page 4 of 34
The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
I. PROGRAM CONTEXT AND DEVELOPMENT OBJECTIVES
A. Context at Appraisal
Country Context
1. At appraisal, Vanuatu—a small island nation of 83 islands with a population of 307,000,
located in the southwestern Pacific Ocean—was classified among the least developed countries (LDC)
by the United Nations (UN). 1 It shared development challenges common to the other Pacific Island
countries (PICs), including remoteness, a narrow economic base, and high vulnerability to shocks.
Vanuatu’s economic backbones were tourism and agriculture, constituting 30 percent and 21 percent of
its gross domestic product (GDP), respectively. Despite facing similar challenges as other PICs, Vanuatu’s
per capita income in 2019 was only US$3,168, below the Pacific average of US$4,264.
2. In the aftermath of Tropical Cyclone (TC) Pam in 2015, Vanuatu demonstrated resilience in
its recovery efforts. Despite substantial damage to the country’s capital assets—ranging from housing,
infrastructure to agriculture and household resources—Vanuatu’s annual GDP displayed a relatively
stable trajectory in 2015. The subsequent years marked a recovery in vital sectors, including tourism,
agriculture, and infrastructure, driving growth to approximately 3.5 percent in 2016 and an estimated 4.4
percent in 2017. However, unforeseen disruptions to agriculture in 2018, stemming from storms and
volcanic eruptions, coupled with a weaker price for the country’s agricultural exports, resulted in growth
slowing down to 3.2 percent. Inflation was largely contained within the target range of 0 to 4 percent set
by the Reserve Bank of Vanuatu.
3. Debt distress was assessed as moderate, with limited capacity to absorb external shocks
such as natural disasters. After TC Pam, Vanuatu experienced a substantial increase in nominal public and
publicly guaranteed (PPG) debt, primarily driven by post-cyclone reconstruction spending and public
infrastructure investments, such as the construction of international wharves, interisland shipping
facilities, and upgrades to the international airport. Estimates indicated that PPG debt more than doubled
from 19.5 percent of GDP in 2014 to 45.2 percent of GDP in 2018. According to the 2019 joint World Bank-
International Monetary Fund (IMF) Debt Sustainability Analysis (DSA), Vanuatu was at a moderate risk of
external debt distress, with limited capacity to absorb external shocks. To address its debt burden and
maintain public debt below 60 percent of GDP, strategic measures, such as directing grants and
concessional lending toward new public infrastructure projects, were deemed essential.
4. The macroeconomic policy framework in Vanuatu, as assessed during the appraisal of this
operation, was considered adequate. The macroeconomic outlook, which projected growth to ease to
2.8–3 percent in the medium term, hinged on the completion of the ongoing infrastructure projects and
increased private sector investments in the tourism sector. Inflation was projected to stabilize at 2–3
percent. The current account surplus in 2019 was projected to turn into a deficit due to an anticipated
decline in revenues from the Economic Citizenship Program (ECP), a citizenship-by-investment scheme. 2
1 Vanuatu achieved the status of graduating from the official list of LDCs on December 4, 2020, making it the sixth country to
attain this milestone.
2 Since 2017, Vanuatu has offered passports in exchange for investment through the ECP, comprising the Vanuatu Development
Support Program (VDSP) and the Vanuatu Contribution Program (VCP). These programs provide ‘honorary citizenship’,
excluding voting and political engagement, in return for a one-time monetary contribution.
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
At the same time, there were some macroeconomic risks associated with Vanuatu’s limited fiscal space:
the potential impact of a significant natural disaster and the continuous accumulation of public debt. Both
risks, if realized, would exert substantial pressure on Vanuatu’s fiscal position.
Sector Context
5. Located in the South Pacific tropical cyclone basin and the Pacific Ring of Fire, Vanuatu faced
significant exposure to various hazards, including tropical cyclones, floods, volcanic eruptions, and
earthquakes. These hazards carried the potential to cause considerable adverse impact on the country's
population and economy. Modeling in 2010 projected an annual average loss of US$48 million from
earthquakes and tropical cyclones, with a 50 percent chance of experiencing a loss exceeding US$330
million in any 50-year period and a 10 percent chance of a loss exceeding US$540 million. Additionally,
the anticipated impacts of climate change were expected to increase the frequency and severity of
hydrometeorological hazards. TC Pam, one of the most powerful weather events, led to economic
damages of US$450 million, equivalent to 64 percent of GDP.
6. As urbanization accelerated in Vanuatu, the concentration of people and assets in hazard-
prone areas became a pressing concern. The rapid annual population growth of 4.1 percent in Port Vila,
driven both by natural increase and rural migrants seeking economic opportunities, heightened the risk
level for the country. Importantly, 74 percent of this growth occurred outside the municipal boundary of
Port Vila and adjacent peri-urban settlements, particularly in areas susceptible to natural hazards to the
north and east of the city, such as floodplains, hillsides vulnerable to landslides, and coastal zones exposed
to tsunamis and inundation. This unplanned urbanization posed a substantial challenge for effective urban
management and service provision, complicating efforts to enhance disaster and climate resilience.
7. The Government of Vanuatu (GoV) considered climate and disaster resilience as well as
prudent public debt management as key priorities. The National Sustainable Development Plan (NSDP)
for 2016–2030 outlined specific resilience objectives focusing on institutionalizing climate change and
disaster risk governance, strengthening post-disaster systems, and ensuring access to financing for climate
change adaptation (CCA) and disaster risk management (DRM), aligning with the overarching goal of
stable and equitable economic growth. To achieve the NSDP’s resilience objectives, the Climate Change
and Disaster Risk Reduction (CCDRR) Policy for the same period detailed strategic priorities, including
strengthening institutional structures, integrating disaster risk reduction (DRR) measures into legislation
and policy frameworks, enhancing disaster response and recovery planning with a 'build back better'
approach, and ensuring timely access to response and recovery funds. Related to debt management, the
Public Financial Management (PFM) Roadmap for 2017–2021 recognized the importance of fiscal
sustainability and identified the risk of debt distress as a concern in debt management practices.
8. Since 2010, the World Bank has actively supported Vanuatu in enhancing its DRM system
through a combination of lending operations and technical assistance (TA). This included the following
projects:
• The Mainstreaming Disaster Risk Reduction Project (P129376) supported multi-hazard and
risk mapping in Greater Port Vila and Luganville areas and strengthened the national multi-
hazard early warning system; it closed in 2017.
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
• The Increasing Resilience to Climate Change and Natural Hazards Project (P112611) focused
on community resilience investments, policy and institutional strengthening, and TC Pam
recovery; it closed in 2018.
• The Pacific Resilience Program (P155256) funded Vanuatu’s catastrophe insurance
premiums under the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI),
a regional parametric disaster risk insurance pool, enabling a payout of US$1.8 million after
TC Pam; it closed in 2020.
• The Vanuatu Infrastructure Reconstruction and Improvement Project (P156505) supported
the reconstruction and upgrading of public facilities and infrastructure in provinces affected
by TC Pam; it closed in 2023.
• The Vanuatu: Enabling Affordable and Resilient Settlements (P157414) TA provided
technical analysis and advisory services to the GoV on enhancing urban resilience,
addressing urban expansion, and guiding land development; it concluded in 2019.
• The Vanuatu Affordable and Resilient Settlements Project (VARS, P173278), prepared during
the implementation of the Catastrophe-Deferred Drawdown Option (Cat-DDO), aims to
demonstrate practical applications of affordable and climate-resilient settlements, with a
projected closure in 2027.
9. This sequence of investment projects underscores a long-standing and extensive collaboration
between the GoV and the World Bank to build climate and disaster resilience. The Cat-DDO operation
complemented previous World Bank-financed investments with key policy reforms. The latest investment
project demonstrates the World Bank’s strategy to continue building on gains achieved so far and on the
foundation of reforms introduced by the Cat-DDO, ensuring a cohesive approach to disaster and climate
resilience.
Rationale for World Bank Assistance and the Choice of Instrument
10. The rationale for World Bank assistance was grounded in the need to support the GoV to
improve its financial preparedness for disasters. While PCRAFI proved beneficial following TC Pam in
2015, subsequent events, notably TC Hola in March 2018 and the Ambae volcanic eruptions in 2017–2018,
exposed gaps in coverage, emphasizing the need for a more comprehensive approach to post-disaster
financing. This was further emphasized by the inadequacy of the existing Emergency Fund, which had
proven insufficient in the face of past disasters and was susceptible to depletion even from a single
disaster event. To better address its contingent liabilities, the Government decided to request the Cat-
DDO as a new financial instrument to support post-disaster response and recovery. Specifically, the Cat-
DDO was to provide Vanuatu with a contingent source of immediate liquidity in the aftermath of a
disaster, complementing existing post-disaster funding arrangements to ensure a swift and effective post-
disaster response.
11. The choice of the Cat-DDO instrument also extends to its role as a catalyst for critical policy
reforms, aligning with Vanuatu's broader national development goals, such as the NSDP and the CCDRR
Policy. The Cat-DDO was not considered merely a financial tool but an integral component of a
comprehensive strategy aimed at strengthening institutional structures and policies to enhance Vanuatu’s
resilience to climate change and natural hazards. Similarly, the incorporation of debt management
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
reforms was considered as a key element of the Government’s overarching strategy to consolidate public
finances, ensuring fiscal resilience for Vanuatu’s economic stability.
12. This operation responded to the findings of the World Bank Group (WBG) 2016 Systematic
Country Diagnostic (SCD, Report No. 102803) and was aligned with the objectives of the WBG’s Regional
Partnership Framework (RPF) for nine PICs for FY17–FY23 (Report No. 120479). 3 The SCD identified
geographic factors (that is, remoteness, small and internally dispersed populations across islands) and
high vulnerability to disaster and climate-related shocks as key constraints to economic growth. This
operation was designed to address this by strengthening the GoV’s capacity to manage and reduce
disaster and climate risk and to manage public debt. It specifically contributed to the following two RPF
objectives: (a) RPF Objective 1: strengthening resilience to natural disasters and climate change, under
RPF Focus Area 3; and (b) RPF Objective 1: developing and maintaining frameworks to improve fiscal
management, under RPF Focus Area 4.
Original Program Development Objective(s) (PDO) (as approved)
13. As stated in the financing agreement and the Program Document, the PDO is to enhance the
Recipient's regulatory framework and institutional capacity to: (i) manage and reduce the risks from
natural disasters and climate change and (ii) manage public debt.
Original Policy Areas/Pillars Supported by the Program (as approved)
14. The policy areas were structured under two pillars, corresponding to the PDO, on DRM and
public debt management.
15. Pillar A: Managing and Reducing Disaster and Climate Risk. This pillar centered on enhancing
the regulatory framework and institutional capacities for resilience at both national and local levels.
Additionally, this pillar aimed to provide a comprehensive approach to risk reduction and climate
adaptation in future land and settlement development across the country.
16. Pillar B: Managing Public Debt. This pillar concentrated on supporting debt management
reforms as an integral part of the Government's broader initiatives to streamline public finances. The
objective was to establish fiscal buffers that would enable the Government to effectively respond to
disasters and other external shocks.
B. Significant Changes During Implementation
17. On March 26, 2020, the GoV declared a National State of Emergency due to the COVID-19
pandemic (Order No. 34 of 2020). In direct response to the pandemic, Vanuatu took decisive measures
by closing its international borders and implementing mobility restrictions. These actions, essential for
public health, resulted in an immediate shutdown of key sectors such as tourism and construction. This,
in turn, led to a substantial economic downturn. Additionally, the Government started the preparation of
3The Performance and Learning Review of the RPF for the PIC9 (Report No. 145750-EAP) extended the RPF period from FY21 to
FY23. Nauru was added as the ninth country.
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
a fiscal stimulus package to mitigate the economic impact on affected businesses and households,
providing further support during those challenging times.
18. Given these unprecedented circumstances, on March 30, 2020, the Government formally
requested the World Bank to amend the interpretation of the trigger defined in the Financing
Agreement. The proposed change sought to explicitly include public health-related emergencies.
Following confirmation and approval of this change, the Government subsequently requested, on April 6,
2020, the disbursement of the total grant proceeds of the operation. The World Bank approved this
request on April 15, 2020. The disbursement of the Cat-DDO on April 24, 2020, played a crucial role in
assisting the Government in managing the spread of COVID-19. 4 This also aligned with the WBG’s broader
efforts to expedite the international response and support nations in effectively addressing the challenges
posed by the global pandemic.
19. No changes occurred in the pillars, the PDO, or the results indicators of the operation.
However, the operating environment within which these reforms were being implemented became
increasingly complex. The international borders of Vanuatu remained closed until 2022, effectively
isolating the country. During this period, Vanuatu also experienced more frequent back-to-back natural
disasters: TC Harold in 2020, followed by TCs Judy and Kevin in 2023, and TC Lola in October 2023.
Additionally, political volatility led to frequent changes in leadership across key governmental
departments. This continuous change in leadership, each with their distinct agendas and priorities, further
complicated the operational landscape, significantly affecting the pace of reforms implementation.
II. ASSESSMENT OF KEY PROGRAM DESIGN AND OUTCOMES
20. The program’s prior actions and results indicators included in the Policy Matrix of the Program
Document were mostly achieved, as shown in table 1.
Table 1. PDO, Prior Actions, and Results
PDO: Enhance the Recipient's regulatory framework and institutional capacity to: (i) manage and reduce the
risks from natural disasters and climate change; and (ii) manage public debt.
Prior Actions Results Indicators (original and revised)
Pillar A
Managing and Reducing Disaster and Climate Risk
Prior Action 1: The Results Indicator 1.1: Achieved
Recipient’s Council of Number of Provincial and Municipal Disaster and Climate Change Committees
Ministers has approved, (PDCCCs, MDCCCs) established with funded annual work plans.
and submitted to the
Parliament, a Bill for the Baseline (2019): 4 PDCCCs established and 0 MDCCCs established 5.
Disaster Risk Management Target (2023): 6 PDCCCs established and 2 MDCCCs established.
Act, which provides for an Final Status (2024): 6 PDCCCs established and the roles of the two MDCCCs have
integrated approach to been integrated into those of the PDCCCs.
4 The disbursement delay was a result of the increased volume of disbursement requests from client countries during the
COVID-19 pandemic, causing extended processing times for the World Bank Financing and Accounting Unit.
5
No PDCCCs and MDCCCs were formally established prior to the enactment of the NDRM Act and the start of the Operation.
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Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
Prior Actions Results Indicators (original and revised)
disaster risk reduction and Results Indicator 1.2: Achieved
climate change adaptation, Disaster Recovery Framework developed and approved for implementation by
disaster preparedness, Council of Ministers
response, and recovery at
national and local levels. Baseline (2019): No.
Target (2023): Yes.
Final Status (2024): Yes.
Prior Action 2: The Results Indicator 2.1: Not Achieved
Recipient’s Council of Subdivision Regulations integrating affordability, climate and disaster resilience
Ministers has approved a adopted and applied.
National Land Subdivision
Policy, which provides for Baseline (2019): Regulations not developed.
risk-informed land and Target (2023): Regulations applied to 100 percent of new subdivision applications.
settlement development, Final status (2024): Regulations developed but not yet adopted.
with minimum standards Results Indicator 2.2: Achieved (with delay)
for disaster risk reduction. Disaster and climate-risk informed Land Management Planning Committee
(LMPC) guidelines adopted and applied.
Baseline (2019): LMPC Guidelines not developed.
Target (2023): LMPC Guidelines applied to 100 percent of Subdivision
applications.
Final Status (2024): LMPC Guidelines formally adopted in March 2024. The draft
guidelines were already being used by the LMPC as a tool for review applications.
Pillar B
Managing Public Debt
Prior Action 3: The Results Indicator 3: Achieved
Recipient’s Council of Compliance with the Debt Management Strategy (DMS) condition of a
Ministers has approved a minimum 35 percent grant element for any new external financing.
Debt Management Strategy
2019–2022, which contains Baseline (2019): New external loan contracted in late 2018 had a grant element
measures to minimize the below 35 percent.
costs and risks associated Target (2023): Compliance with the DMS concessionality condition of a minimum
with the Recipient’s public 35 percent grant element for any new external loan contracted during the term
debt and sets out plans to of the DMS (2019–2022).
strengthen the Recipient’s Final Status (2024): All new external loans contracted during 2019–2022
public debt management. complied with the DMS concessionality and are within the 35 percent grant
element.
A. Relevance of Prior Actions
Rating: Satisfactory
21. The prior actions remain aligned with Vanuatu’s national development priorities. Key
strategic national policy documents, such as the NSDP and CCDRR Policy, which were in place at the time
of appraisal, continue to guide policy reforms related to climate and disaster risk management. As a result,
Prior Actions 1 and 2 have introduced reforms that continue to be relevant. Furthermore, Prior Action 3
aligns with newly adopted national policy documents, including the DMS 2023–2026. This underscores
the enduring relevance of Prior Action 3.
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Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
(CAT-DDO) (P168749)
22. The prior actions remain in line with the 2023 update of the WBG SCD (Report No. 180998)
as well as the WBG Regional RPF for FY17–FY23 and the World Bank’s overarching commitment to the
Sendai Framework for DRR and the Paris Climate Agreement. The SCD update identifies the
strengthening of climate and disaster risk management policies as a priority. The program actively
supports the RPF objectives of (a) enhancing resilience to natural disasters and climate change and (b)
developing and maintaining frameworks to enhance fiscal management. Moreover, these reforms are
consistent with the Sendai Framework for DRR and the Paris Climate Agreement, to which Vanuatu is a
signatory. The Program contributes to these commitments by assisting countries in integrating DRR and
CCA into their national development policies, frameworks, and programs.
23. All prior actions had a strong and direct link to the achievement of the PDO and were well
informed by a credible results chain, illustrated in the Theory of Change (see figure 1) developed as part
of this Implementation Completion and Results Report (ICR). The prior actions, results indicators, and
expected outcomes are closely linked. Results indicators are relevant to measure the prior actions, and
the prior actions contribute to the achievement of the PDO. A review of the critical assumptions in figure
1 demonstrates that the prior actions and results indicators were grounded in reasonable and logical
considerations.
Figure 1. Vanuatu CAT-DDO Results Chain (Theory of Change)
PDO: to enhance the Recipient's regulatory framework and institutional capacity to: (i) manage and reduce
the risks from natural disasters and climate change; and (ii) manage public debt.
OUTPUT (RESULT PDO LEVEL
PRIOR ACTION INDICATOR) OUTCOME
Number of Provincial and
Municipal Disaster and
1. The Recipient’s Council of Ministers Climate Change
has approved, and submitted to the Committees (PDCCCs,
Parliament, a Bill for the Disaster Risk MDCCCs) established with
funded annual work plans. Manage and
Management Act, which provides for
reduce the risks
an integrated approach to disaster risk
from natural
reduction and climate change
disasters and
adaptation, disaster preparedness, Disaster Recovery climate change
response and recovery at national and Framework developed and
local levels. approved for
implementation by Council
of Ministers
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Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option
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Subdivision Regulations
integrating affordability,
climate and disaster
resilience adopted and
2. The Recipient’s Council of Ministers
applied
has approved a National Land
Subdivision Policy, which provides for
risk-informed land and settlement
development, with minimum standards Disaster and climate-risk
for disaster risk reduction. informed Land
Management Planning
Committee (LMPC)
guidelines adopted and
applied
3. The Recipient’s Council of Ministers
has approved a Debt Management Compliance with the Debt
Strategy 2019-2022, which contains Management Strategy
measures to minimize the costs and (DMS) condition of a Manage Public
risks associated with the Recipient’s minimum 35 percent grant Debt
public debt, and sets out plans to element for any new
strengthen the Recipient’s public debt external financing
management.
Critical Assumptions:
It is assumed that there is sufficient institutional capacity within the
GoV to implement the DRM Act, the National Land Subdivision Policy,
and the DMS. This includes having staff with the necessary expertise
Institutional Capacity and and resources, as well as a commitment to adhere to the new
Commitment frameworks and policies. Without this capacity and commitment, the
establishment of committees, development and approval of
frameworks, and adherence to financial conditions may not translate
into the intended outcomes.
It is assumed that there will be sustained funding for the
implementation of the disaster risk management and climate
Sustainability of Funding adaptation measures. This funding needs to be secure, not just at the
outset but throughout the implementation period to ensure that the
measures adopted have a lasting impact on managing natural disaster
risks and public debt.
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The World Bank
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Pillar A: Managing and Reducing the Risks from Natural Disasters and Climate Change
Prior Action 1: The Recipient’s Council of Ministers has approved, and submitted to the Parliament, a Bill
for the Disaster Risk Management Act, which provides for an integrated approach to disaster risk reduction
and climate change adaptation, disaster preparedness, response, and recovery at national and local levels.
24. Prior Action 1 aimed at enhancing the regulatory framework and institutional capacities for
multi-hazard ex ante DRM at both national and local levels. The prevailing legislation, the National Disaster
Act, enacted in 2000, concentrated on immediate response measures, such as evacuations, emergency
operations, and the provision of relief supplies to affected individuals. The DRM Act of 2019, which was
passed by Parliament in November 2019 and became effective in February 2020, marked a departure from
the existing approach. It provided the Government with the flexibility to realign its regulations and
institutional structures, shifting away from a primarily reactive stance that focused on post-disaster
emergency management and response. Instead, the emphasis evolved toward a more comprehensive and
inclusive approach to DRM. This strategic and legislative realignment underscored the Government's
robust commitment to a proactive risk management approach.
25. The DRM Act established key disaster and emergency management mandates. It designated
the National Disaster Committee (NDC) as the primary advisory body to the Government on DRM,
covering crucial aspects such as planning, preparation, and response. The NDC's role was deemed pivotal
in providing overarching guidance and expertise at the national level including making recommendations
to the President of Vanuatu for declaration of a State of Emergency under the act. In recognizing the
necessity of decentralization, the DRM Act also acknowledged that effective disaster management in
Vanuatu must be responsive and inclusive of the geographically dispersed and diverse population across
all six provinces. The act mandates key entities, including the National Disaster Management Office
(NDMO), to ensure comprehensive coordination of disaster and emergency management activities.
Concurrently, the act calls for the establishment of Provincial, Municipal, and Community Disaster and
Climate Change Committees. Moreover, the DRM Act formalizes Vanuatu’s government-led multisector
National Cluster Framework and promotes a collaborative approach that enhances coordination among
various sectors and stakeholders at all levels on DRR activities and disaster emergency operations.
Prior Action 2: The Recipient’s Council of Ministers has approved a National Land Subdivision Policy, which
provides for risk-informed land and settlement development, with minimum standards for disaster risk
reduction.
26. Prior Action 2 aimed to support risk-informed land use and settlement development. The
National Land Use Planning Policy, adopted in 2013, addressed the necessity for improved land use
planning. Recognizing the fast pace of urbanization in Vanuatu, with urban population growth double that
of rural areas, the policy emphasized the potential economic and social benefits of well-planned
urbanization. However, it also acknowledged that such urbanization could introduce new risks and
increase the population and assets in vulnerable areas. To address this challenge, the Land Use Policy
mandated the mainstreaming and integration of tools, methodologies, and information related to disaster
and climate risks into the land use planning process.
27. Prior Action 2 resulted in the adoption of the National Subdivision Policy, which provides the
regulatory framework for land development. This policy specifically targets land intended for leasing and
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subdivision without pre-existing, approved land use and zoning plans. A key aspect of this policy is its focus
on disaster and climate resilience. It mandates applicants (that is, land developers) to develop a concept
plan informed by a site assessment. This includes identifying natural hazards and assessing site suitability
for development. The policy also outlines the general principles and minimum standards that address
several key areas: (i) service provision – this includes the integration of essential services such as water
supply and electricity, and street lighting. It also emphasizes the inclusion of public spaces, health clinics
and schools, and adequate road design to facilitate sufficient drainage systems, (ii) amenity and
accessibility – ensuring easy access to necessary services and facilities to improve living conditions, (iii)
affordability – making residential settlements accessible to different income groups, and (iv) DRR -
enhancing the resilience of new subdivisions against natural hazards. While developers are encouraged
to adhere to these standards, compliance with the policy remains voluntary. This means that although
developers are not legally obligated to follow these guidelines, the policy provides a systematic and
transparent approach to residential development, which is a significant shift from the previous piecemeal,
slow, and opaque processes. Moreover, the National Subdivision Policy established a framework intended
to guide the development of more detailed regulations. These subsequent regulations will be crucial in
actualizing the policy's objectives, transforming it from a voluntary guideline to an enforceable standard.
Pillar B: Managing Public Debt
Prior Action 3: The Recipient’s Council of Ministers has approved a Debt Management Strategy 2019–
2022, which contains measures to minimize the costs and risks associated with the Recipient’s public debt
and sets out plans to strengthen the Recipient’s public debt management.
28. Prior Action 3 aimed at strengthening debt policy and management, recognizing its importance
for maintaining macroeconomic stability. The DMS for 2019–2022 established ceilings for external (40
percent of GDP) and total public debt (60 percent of GDP). To avoid breaching the public debt ceiling, the
DMS mandated a requirement for contracting only highly concessional external loans and mobilizing
greater amounts of grant financing. This measure was deemed crucial, considering the recent rapid
escalation of public debt to meet the country’s large infrastructure needs. It aimed to mitigate associated
risks and ensure adequate fiscal space for responding to the next natural disaster. Relying on external
concessional financing would then help build adequate fiscal buffers including by ensuring that the debt
service burden associated with this borrowing is manageable.
B. Achievement of Objectives (Efficacy)
Rating: Moderately Satisfactory
29. Relevance and measurability of results indicators. The selected results indicators align with and
adequately measure the effectiveness of the prior actions in contributing to the expected outcomes
related to disaster and climate risk management as well as public debt management. In the case of Prior
Action 1, the number of established PDCCCs and MDCCCs and the approval of the National Disaster
Recovery Framework (NDRF) serve as tangible measures of progress. These indicators directly reflect the
successful cabinet approval and the subsequent enactment of the DRM Act, demonstrating a clear link
between legislative actions and on-the-ground achievements. For Prior Action 2, the successful adoption
and application of Subdivision Regulations and LMPC Guidelines are measurable outcomes that directly
indicate the integration of considerations of affordability, climate, and disaster resilience in land
subdivision. These indicators provide a concrete measure of the effectiveness of Prior Action 2 in reducing
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and managing risk in land development. Compliance with the DMS grant condition, a key aspect of Prior
Action 3, is directly measured through the achievement of a minimum 35 percent grant element for all
new external financing.
30. Achievement of targets. For Pillar A, regarding the DRM Act, Prior Action 1, results were mixed: two
indicators were achieved, one was partially achieved, and one was not achieved. In the case of Pillar B,
the target was met, with the indicator fully accomplished, demonstrating the effectiveness of the DMS
and adherence to the conditions for new external financing.
Table 2. Summary of Results Indicator Target Achievement
PDO Achieved Partially Achieved Not Achieved Total
Disaster and Climate 3 0 1 4
Risk Management
Debt Management 1 0 0 1
Total 4 0 1 5
Pillar A: Manage and Reduce Risks from Natural Disasters and Climate Change
31. Results Indicator 1.1 has been achieved. This indicator measured the establishment of the
PDCCCs and MDCCCs with funded annual work plans. With the approval of the DRM Bill, six PDCCCs and
two MDCCCs for Port Vila and Luganville were formally established. Despite the absence of documented
annual work plans, operational evidence validates the functionality of PDCCCs in DRR activities and
emergency operations (see next paragraph). Vanuatu experienced 15 TCs altogether during the course of
the operation, including two Category 4 TCs within a 72-hour span in early 2023. The PDCCCs played a
pivotal role in helping the country prepare, respond, and recover from these disasters.
32. During peacetime, the PDCCCs support nongovernmental organizations and community
disaster committees (CDCs) in conducting awareness programs and preparedness drills, developing
disaster plans, verifying evacuation centers, and updating area councils and CDCs. Their post-disaster
activities include rapid damage assessments, situational report updates, and communication with the
National Emergency Operation Center. The PDCCCs’ roles extend into recovery phases, as demonstrated
by their active participation in the Post-Disaster Needs Assessment (PDNA) and the development of
formally approved recovery plans that include the Terms of Reference (ToR) and Standard Operating
Procedures (SOP), showcasing their operational readiness. Currently, the PDCCCs are actively engaged in
recovery planning following Category 5 TC Lola in October 2023, reinforcing their vital role in managing
disaster recovery efforts and underscoring their sustained operational capacity. Furthermore, the PDCCCs
play a crucial coordination role through the Cluster Framework. For example, members such as Save the
Children Australia, Care International, World Vision, and Oxfam collaborated closely with the PDCCCs to
develop 155 community plans and conduct 22 disaster drills by October 2021. This level of coordination
and collaboration between stakeholders at all levels through the Cluster Framework highlights the
PDCCCs’ integral role. 6
6 https://australianhumanitarianpartnership.org/disaster-ready-vanuatu
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33. To eliminate redundancy and enhance coordination between the PDCCCs and MDCCCs, the
roles and responsibilities of the MDCCCs have been integrated into those of the PDCCCs. This integration
aims to optimize disaster management workflows and promote a cohesive strategy across different levels
of government. Recognizing the importance of this integration, the Council of Ministers, in January 2024,
called for a comprehensive review of the National Disaster Risk Management (NDRM) Act, intending to
refine the coordination mechanism and strengthen the overall legislative structure. This decision
underscores the Government’s commitment to ensuring the effectiveness of the NDRM Act and its
operational success. It also acknowledges that refining such a crucial framework is an iterative process,
demanding continual evaluation and adjustment to meet evolving needs. World Bank’s TA support helped
build the capacity of the PDCCCs and conduct an institutional and technical analysis of the country’s
Emergency Preparedness and Response System (EPR) in 2022. This assistance enabled the Government
to identify gaps and develop both short-term and long-term investment plans to further strengthen the
overall framework.
34. Results Indicator 1.2 has been achieved. This indicator focused on the development and
approval of the NDRF, serving as a comprehensive guideline to facilitate and enhance effective recovery
actions. With the approval of the NDRF by the Council of Ministers on December 9, 2021 (Decision 342),
the indicator target has been achieved. Building on this achievement, the 2023 Disaster Recovery and
Resilience Bill was introduced. This bill designated the Prime Minister’s Office, operating through the
Disaster National Recovery Committee (NRC), as the primary entity responsible for overseeing and
implementing the NDRF. However, due to the snap parliamentary elections in August 2023, the bill had
to be temporarily withdrawn along with a number of other bills. There is a strong expectation that the bill
will be discussed and subsequently approved in the next session of the Parliament in October 2024.
Meanwhile, the operational arm of the NRC, the Recovery Operations Committee (ROC), is now in full
operation and demonstrated its effectiveness during TCs Judy and Kevin, leading the PDNA and
formulating the early recovery plan and the reconstruction plan and showcased the practical application
of the NDRF in guiding recovery efforts. The World Bank provided technical support during the PDNA
exercise and helped the ROC review the PDNA process to further strengthen the recovery planning
framework.
35. Results Indicator 2.1 was not achieved by June 2023. This indicator aimed at the adoption and
implementation of the Land Subdivision Regulations. The Land Subdivision Regulations, crucial for
translating the Land Subdivision Policy into enforceable standards of livability, health, and safety, are
expected to be formally adopted only in July 2024. Currently, the regulations are in the drafting stage at
the State Law Office. To support this significant reform, the World Bank has provided TA, which includes
reviewing existing legislation and recommending a framework for the Land Subdivision Regulation as well
as offering inputs and recommendations on the draft regulations. The next step involves the Ministry of
Land and Natural Resources (MoLNR) working closely with the State Law Office to finalize the draft
regulation in a formal format, preparing it for onward processing and approval. The development and
approval of the Land Subdivision Regulations experienced delays, including political instability highlighted
by two no-confidence votes, legislative backlogs, and the prioritization of pandemic recovery and TC
responses over these regulations. Implementation of the regulation is anticipated by September 2024,
with stakeholder training commencing after the formal adoption to ensure compliance and understanding
of the new regulations' implications for land development.
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36. Results Indicator 2.2 is rated achieved, with delay. This indicator aimed at the development
and application of the LMPC Guidelines. These guidelines were developed to support applicants (that is,
land developers) understand the principles and procedures of the Land Subdivision Policy. The LMPC,
responsible for reviewing submissions, used these guidelines as a comprehensive checklist to verify the
correct application of the Land Subdivision Policy, ensuring that disaster and climate risk information was
integrated into land subdivision plans and helped LMPC guide new subdivision development to safer
areas. Although the LMPC Guidelines were operational, their formal approval was delayed for the same
reasons that delayed the approval of the Land Submission Regulations. The guidelines were formally
adopted on March 20, 2024. The application of the guideline is critical for the urban development and
resilient settlement development agenda in Vanuatu. Since 2020, 49 new settlement subdivision
applications have been screened and reviewed under the criteria formalized in the guideline. The new
greenfield subdivision development supported under the World Bank-funded Vanuatu Affordable and
Resilient Settlements Project (VARS) project will be subject to the same screening process and the project
has allocated resources to further strengthen the application of the subdivision guideline.
Pillar B: Manage Public Debt
37. Results Indicator 3 has been achieved. This indicator measured compliance with the DMS
condition, specifically maintaining a minimum 35 percent grant element for new external financing. This
target has been achieved. The grant financing requirement received legislative backing through an
amendment to the PFEM Act (Internal Order No. 88) in 2019—the primary legal framework for public debt
management. Since then, Vanuatu has demonstrated effective management of its public debt,
consistently maintaining it below the designated ceiling. The country’s fiscal sustainability faced
considerable challenges due to the impact of the COVID-19 pandemic and TC Harold in 2020. These events
severely disrupted all economic activity and brought an end to a period of economic growth largely driven
by reconstruction needs after TC Pam. However, grant financing, such as the Cat-DDO, and ECP revenues
ensured that the country could navigate these challenges and preserve fiscal stability in the face of
external shocks. This underscores the critical link between compliance with the DMS and Vanuatu’s ability
to manage fiscal challenges effectively.
38. Vanuatu now has a new DMS for 2023–2026 in accordance with the principle of fiscal
responsibility outlined in the PFEM Act CAP 244 and made improvements in debt transparency. The
strategy emphasizes the public debt management objectives over the medium term, aiming to reduce the
cost and risk of public debt. The strategy expresses the Government’s intention to source financing needs
and payment obligations at the lowest possible cost, balanced with acceptable levels of risk. The
Government’s borrowing will be guided by the Medium-Term Debt Management Strategy (MTDS) to
ensure that government debt remains within sustainable levels. The MTDS is also guided by government
debt policies outlined in the national budget such as the prepayment of semi-concessional loans,
development of the domestic market operations, clear investor guidance and an optimal cost and
maturity structure, development of the bond market, and a downward trend for the debt-to-GDP ratio in
the medium term. Following regression in debt transparency due to disrupted publication of quarterly
debt bulletins as a result of a ransomware attack in late 2022, the Government has also made efforts to
improve debt transparency, by publishing quarterly debt reports that had stalled and backdating the
reports on the Ministry of Finance and Economic Management (MFEM) website until December 2023.
This has been made possible by technical assistance from the Bank, and is in line with result indicator for
the second Cat-DDO and fulfillment of SDFP PPAs.
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Drawdown of Cat-DDO Instrument
39. Vanuatu requested the activation and full disbursement of the CAT-DDO in April 2020 to
respond to the twin shocks of the COVID-19 pandemic and TC Harold. In response to the global COVID-
19 pandemic, Vanuatu had taken the precautionary step of closing its borders in March 2020. This
decision, together with mobility restrictions, had an immediate adverse impact on the economy,
particularly the tourism sector, a key driver of the country’s economy. Subsequently, TC Harold—a level
5 cyclone with wind gusts over 270 km/h—and a volcanic eruption on Tanna Island affected an estimated
160,000 people (more than half of the population) and caused extensive physical and economic damage.
These damages were estimated to account for over 50 percent of GDP, reaching an estimated US$505
million. In response to these challenges, Vanuatu’s President declared a State of Emergency. Initially
instituted in response to the COVID-19 pandemic (Order No. 34 of 2020, dated March 26, 2020), the
declaration was later extended to encompass the impacts of TC Harold (Order No. 46 of 2020, dated April
11, 2020).
C. Overall Outcome Rating and Justification
Rating: Moderately Satisfactory
40. The overall outcome of the operation is assessed as Moderately Satisfactory. This rating
reflects a mixed performance, where the prior actions are deemed Satisfactory for their significant
contribution toward supporting the GoV in its efforts to manage and mitigate risks associated with natural
disasters, climate change, and public debt. However, the efficacy in achieving the outlined objectives is
considered Moderately Satisfactory, based on the mixed results across indicators: the targets of four of
the five results indicators were met, demonstrating tangible progress toward the program's goals. One
indicator did not meet the expected benchmark within the program's three-year time frame but is
expected to do so by July 2024.
41. Finally, the Cat-DDO instrument demonstrated its timeliness and efficiency, serving as a
crucial source of liquidity during both TC Harold and the COVID-19 pandemic in 2020, thereby providing
vital support for the country's disaster recovery efforts.
III. OTHER OUTCOMES AND IMPACTS
A. Poverty, Gender, and Social Impacts
42. The reforms supported by this operation had a direct impact on Vanuatu’s poor and
vulnerable population. The establishment of an efficient institutional framework for climate and disaster
risk management and an NDRF (Prior Action 1) can be considered as critical measures that have the
potential to benefit the poor and vulnerable. Simultaneously, disaster and climate risk informed land
development (Prior Action 2) enables the reduction of the vulnerability of urban settlements, which are
often hotspots of poverty.
43. The reforms also effectively addressed gender challenges. Key measures, such as the DRM
Act (Prior Action 1) and NDRF (Results Indicator 1.2), actively tackle this issue. The DRM Act mandates that
every PDCCC includes a female representative from the Department of Women’s Affairs. This
requirement, as outlined in the act, guarantees that gender representation is consistently upheld across
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all committees. Specifically, in the Sanma PDCCC, there are two female representatives: one serves as the
assistant secretary to the committee and the other is a gender protection representative from the
Department of Women’s Affairs. Additionally, the NDRF explicitly acknowledges the need to mitigate
gender risks and involve women in decisions related to development and recovery priorities. It
emphasizes preventing sexual exploitation, abuse, and harassment, mandating the inclusion of
monitoring mechanisms for gender and protection in all disaster recovery plans.
44. The drawdown feature of this operation contributed directly to mitigating the economic
impact of the COVID-19 pandemic and TC Harold. In alignment with the WBG’s COVID-19 Crisis Response
Framework, which calls for shielding impoverished and vulnerable populations from the economic and
social repercussions triggered by the pandemic, this operation provided liquidity to respond to the dual
shocks of the COVID-19 pandemic and TC Harold.
B. Environmental, Forests, and Natural Resource Aspects
45. The operation generated positive effects indirectly through supporting policy reforms on
DRM and CCA. The implementation of the DRM Act (Prior Action 1) and the application of the National
Land Subdivision Policy (Prior Action 2) are beneficial for Vanuatu’s environment, natural resources, and
forests. The DRM Act enhances clarity on oversight responsibility for DRM and CCA actions, facilitating the
inclusion of provisions for environmental and social safeguards in future recovery and reconstruction
plans and investments. Moreover, the Land Subdivision Policy (Prior Action 2) is anticipated to produce
positive environmental impacts by integrating environmental considerations into the subdivision
approval, design, and implementation processes for land and settlement development.
C. Institutional Change/Strengthening
46. The reforms facilitated by this operation yielded positive institutional impacts. The
establishment of the six PDCCCs (Results Indicator 1.1) aligned with Vanuatu’s decentralization efforts and
fosters the active participation of various levels of government in decision-making on climate and disaster
risk management. Additionally, the NDRF (Results Indicator 1.2), Subdivision Regulations (Results
Indicator 2.1), and LMPC Guidelines (Results Indicator 2.2) equipped the Government with crucial tools to
execute the mandates outlined in the DRM Act (Prior Action 1) and Land Subdivision Policy (Prior Action
2).
D. Other Unintended Outcomes and Impacts
47. The Cat-DDO played a crucial role in supporting health-related response activities and
proved essential during the COVID-19 pandemic. Health risks were not considered in the design of the
Cat-DDO but were incorporated following the Government’s request to amend the definition of ‘Natural
Catastrophe’ under Paragraph 4 of the Financing Agreement. This amendment allowed the inclusion of
public health-related events, enabling the disbursement of the Cat-DDO to respond to the COVID-19
pandemic.
IV. BANK PERFORMANCE
Rating: Moderately Satisfactory
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48. Design and preparation were informed by lessons learned and strong collaboration with
partners. The operation’s design drew on lessons learned from previous World Bank-supported Cat-DDO
programs and projects in Vanuatu, existing analytical work, and collaboration with development partners.
This approach enabled the development of a pragmatic policy matrix based on strategic prioritization and
the necessary technical and institutional capacity for effective implementation. The World Bank utilized a
range of analytical work, including from the World Bank, IMF staff, and the Government—such as the
NSDP, CCDRR Policy, National Land Use Planning Policy, the Vanuatu DMS 2016–2019, the 2019 DSA, and
IMF Article IV reports—in the design of this operation. Valuable lessons from previous lending operations,
such as the Pacific Resilience Program and World Bank-led TA, including the TC Pam PDNA, analytical work
on land use and settlement planning, and the Debt Management Performance Assessment (DeMPA)
influenced the design of the policy reforms significantly. Close cooperation and coordination with key
development partners, notably the Asian Development Bank (ADB), the Australian Department of Foreign
Affairs and Trade (DFAT), and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), enhanced
the robustness of the design.
49. Unforeseen crises resulted in several indicators not being met within the set timeline.
Despite the well-designed policy matrix, featuring relevant and measurable indicators, the operation did
not achieve one target related to the subdivision regulation due to significant external disruptions,
including political instability 7 and legislative delays; the COVID-19 pandemic and the subsequent
economic downturn; and a series of back-to-back natural disasters, including tropical cyclones and a
volcanic eruption between 2020 and 2023. While substantial risks were identified during project
preparation, and measures were put in place to address political, macroeconomic, and fiduciary
challenges, as well as limitations in the Government's capacity, the intensity of these crises underscored
the extraordinary challenges faced by the Government in implementing the reform agenda within the
three-year time frame.
50. Under challenging circumstances, the World Bank provided TA to support the
implementation of the reforms through a complementary program. Under Pillar A, the World Bank’s
efforts focused on improving local disaster preparedness through comprehensive tsunami drills and
capacity-building activities for the Sanma PDCCC, providing a model for the other newly established
committees as well as supporting the Ministry of Climate Change Adaptation (MoCCA) in strategic
planning and policy reforms. These activities led to various outputs, including a strategic plan for MoCCA
and an assessment of the country’s EPR system, which collectively improved Vanuatu’s readiness for
disaster scenarios. However, unforeseen events shifted government focus from long-term resilience
reforms to immediate recovery efforts. In Pillar B, the World Bank provided technical support, working
closely with the Debt Management Unit (DMU) within the MFEM to assist with strengthening debt
reporting and transparency. The World Bank has continued providing this support beyond the timeline of
the operation.
7The political instability refers specifically to the frequent changes in leadership at the MoLNR. During the implementation of
the program, the ministerial leadership experienced four changes, significantly affecting the continuity and consistency of the
reform efforts. Additionally, the Director General (DG) position, pivotal in the execution of the operation's mandates, remained
vacant from 2021 to 2022. This vacancy resulted from the suspension of the then-serving DG, further complicating the
operational stability. Throughout the operation’s time frame, there were two different DGs, each bringing different approaches
and priorities.
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51. Amid a constant state of crisis, World Bank implementation support remained consistent
and continued beyond the operation closure. The World Bank team, with a Senior DRM Specialist based
in Port Vila and with strong relationships with key ministries, closely monitored the progress of reforms.
This involved consistent coordination with four key implementing ministries—MFEM, the Prime Minister’s
Office, Ministry of Climate Change (MoCCA), and MoLNR—alongside other partners. From 2020 to 2023,
the World Bank conducted both virtual and in-country missions. However, despite these frequent
interactions, the documentation of the operation’s progress was limited, as only one Implementation
Status and Results Report (ISR) was filed throughout the duration of the operation. Furthermore, the
World Bank handled the Cat-DDO withdrawal request efficiently, ensuring timely liquidity for the
Government to implement emergency response activities and manage the impact of the pandemic.
Recognizing the sustained need for assistance, the World Bank extended its support for six months after
the closing of the operation, affirming its commitment to the success of the reforms.
V. RISK TO SUSTAINABILITY OF DEVELOPMENT OUTCOMES
52. The new government has shown continued commitment to the program, that is, in improved
management and reduction of climate, disaster, and public debt risks, as well as the ongoing engagement
with the World Bank.
53. There is a strong government commitment to managing its public debt effectively. The 2023
World Bank-IMF DSA maintains a moderate risk of debt distress for Vanuatu’s public debt, consistent with
prior assessments in 2019 and 2021. In this context, the recommendations emphasize the importance of
preserving fiscal space amid the acceleration of donor-financed infrastructure projects. The PFM
Roadmap for 2022–2026 and the DMS for 2023–2026 continue to mandate that all new external
borrowing must be concessional, with a 35 percent grant element. The main risk is to secure an
institutional mandate for the DMU to ensure that the roles are ingrained in legislation as well as ensuring
regulations clearly state the grant element calculations follow international standards.
54. There is continued World Bank involvement in the program’s reform areas. A second Cat-
DDO (P176930) was approved in 2021, and a Resilience Development Policy Operation (DPO) with a Cat-
DDO (P181274) is currently in the pipeline. Both operations build strategically on the reforms and
achievements established during this operation. The Government’s willingness to pursue two consecutive
follow-up operations to this Cat-DDO underscores its positive evaluation of the instrument. Through these
operations, the World Bank will continue to support the Government in maintaining its commitment to
enhancing its capacity to manage climate and disaster risks, including health emergencies and ensuring
prudent public debt management.
VI. LESSONS AND NEXT PHASE
A. Lessons Learned
55. Pragmatic design. The policy framework was tailored to Vanuatu's specific needs and
capacities, demonstrating a realistic and pragmatic approach. By restricting the scope to a limited set of
prior actions and results indicators, the operation ensured that the reforms were practical and achievable
given the country context. This deliberate simplification highlights the critical importance of aligning
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reform design with the local context and capabilities of the client, thereby enhancing the likelihood of
successful implementation.
56. Adapting to unprecedented crises. While the operation was specifically designed with the
potential for crises in mind, the actual intensity, overlap, and compounding effects of multiple crises,
including the COVID-19 pandemic and several natural disasters, exceeded expectations. This situation led
to operational challenges, highlighting the need for an even more comprehensive risk mitigation strategy
from the start. The importance of flexibility in the design and delivery of TA—especially the capability for
remote execution—became paramount to advancing reform efforts amidst these unexpected challenges.
This experience underlines the critical necessity of not just anticipating crises but also preparing for their
unprecedented nature to ensure the resilience and continuity of reform processes.
57. Flexibility of Cat-DDO instrument. The World Bank demonstrated flexibility by swiftly
amending the Financing Agreement to include public health related events in the definition of eligible
catastrophes. This enabled the timely disbursement of funds to address the unprecedented dual crisis
(the COVID-19 pandemic and TC Harold) that confronted Vanuatu in 2020. Based on this experience,
health has been included in the policy matrix of the second Cat-DDO, ensuring an integrated approach
between DRM and health to strengthen the overall framework for emergency response.
58. Synergies within portfolio. The Cat-DDO’s potential impact is most effectively realized within
a portfolio of operations, ensuring both the practicality of reforms and their enduring impact. The
experience with the Cat-DDO emphasized the value of leveraging a decade of prior World Bank-financed
investment operations and TA in climate and disaster risk management. While the Cat-DDO functioned as
a stand-alone operation, there are three operations, detailed in paragraph 59, that are directly building
on or complementing the reforms. This reflects the joint commitment of the Government and the World
Bank to sustained engagement in the policy reform areas, ensuring the enduring impact of the instituted
reforms.
B. Next Phase
59. The World Bank remains actively involved in the key reform areas of the operation, evident in
the following operations:
• In June 2021, the World Bank Board of Directors approved the Second Vanuatu CAT-DDO
(P176930), which continues to address gaps in Vanuatu’s climate and disaster risk
management policy framework and public debt management. Expanding its scope, this
operation includes actions to strengthen the health sector’s disaster response capacity and
promote fiscal transparency.
• Subsequently, in March 2022, the Board approved the Vanuatu Affordable and Resilience
Settlement Project (P173278). This investment operation further supports improvements
related to land use planning, aiming to implement the standards outlined in the Land
Subdivision Policy and the amended Physical Planning Act.
• Considering its ongoing need for sustaining DRM reforms and contingent financing, the GoV
formally requested World Bank support in October 2023 for a third Cat-DDO and in February
2024 for the first DPO. These are currently under preparation as a hybrid DPO with Cat-DDO
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(P181274). This operation is expected to further strengthen Vanuatu’s climate and disaster
resilience and public finance management capacities and private and financial sector
development, building on the progress made under this operation.
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option (CAT-DDO) (P168749)
ANNEX 1. RESULTS FRAMEWORK
.
RESULTS INDICATORS
Pillar: Managing and reducing disaster and climate risks
Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion
Number of Provincial and Number 0.00 8.00 8.00
Municipal Disaster and Climate
Change Committees (PDCCCs 31-Jan-2020 27-Jun-2023 27-Jun-2023
and MDCCCs) established with
funded annual work plans
Comments (achievements against targets):
Results Indicator 1.1 was met through the establishment of six PDCCCs and two MDCCCs. Their effectiveness was substantiated by their substantial
contributions to recovery planning and assessments. The roles intended for MDCCCs were absorbed by the PDCCCs to streamline efforts. The Council of
Ministers initiated a review of the National Disaster Risk Management (NDRM) Act, aiming to formalize this integration and enhance disaster management
coordination. This review process underscores the government's dedication to refining the Act and ensuring its operational effectiveness.
Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion
Disaster Recovery Framework Yes/No No Yes Yes
developed and approved for
implementation by Council of 31-Jan-2020 09-Dec-2021 26-Jun-2023
Ministers.
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option (CAT-DDO) (P168749)
Comments (achievements against targets):
The target indicator was met with the Council of Ministers' endorsement of the NDRF on December 9, 2021 (Decision 342). Following its approval, the NDRF
was actively utilized in the recovery operations for Tropical Cyclones Judy and Kevin. A Recovery Operations Committee, established within this framework,
was fully operational and led the post-disaster needs assessments for both events, effectively guiding the recovery process.
Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion
Subdivision Regulations Text Nil Regulation applied to Not achieved
integrating affordability, 100 percent of new
climate and disaster resilience subdivision applications
adopted and applied.
31-Jan-2020 27-Jun-2023 27-Jun-2023
Comments (achievements against targets):
The Land Subdivision Regulations were not adopted by June 2023. The approval is now expected in July 2024, with full implementation by September 2024.
Delays were caused by political instability, legislative backlogs, and prioritization of pandemic and disaster responses. Despite setbacks, the upcoming
regulations remain vital for improving land management and enhancing disaster resilience.
Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion
Disaster and climate-risk Text Nil LMPC Guidelines applied Achieved w/ delay
informed Land Management to 100 percent of
Planning Committee (LMPC) Subdivision applications
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option (CAT-DDO) (P168749)
guidelines adopted and 31-Jan-2020 26-Jun-2023 20-Mar-2024
applied.
Comments (achievements against targets):
The LMPC guidelines were not developed and adopted by June 2023. These guidelines, aimed at providing support to the LMPC and land developers in
adhering to the Land Subdivision Policy, were used by the LMPC to ensure compliance and integration of disaster and climate risk considerations into land
subdivision plans. Although they were operationally used, formal approval was postponed until March 2024. The approval delays mirrored broader issues,
including political instability, legislative delays, and diverted focus due to pandemic and disaster responses, highlighting systemic challenges that impede
the timely progression of essential regulations and underscore the need for a more flexible policy-making framework.
Pillar: Managing public debt
Indicator Name Unit of Measure Baseline Target Actual Achieved at Completion
Compliance with the Debt Text Nil Compliance with the The Government is strictly compliant
Management Strategy (DMS) DMS concessionality with the threshold in the debt
condition of a minimum 35 condition of a minimum management strategy
percent grant element for any 35 percent grant
new external financing.
element for any new
external loan
contracted during the
term of the DMS
(from 2019 to 2022).
31-Jan-2020 26-Jun-2023 27-Jun-2023
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option (CAT-DDO) (P168749)
Comments (achievements against targets):
The government complied with the Debt Management Strategy condition to maintain a minimum 35 percent grant element for new external financing. The
grant financing requirement received legislative backing through an amendment to the PFEM Act (Internal Order No.88) in 2019 – the primary legal
framework for public debt management.
.
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option (CAT-DDO)
(P168749)
ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION PROCESSES
A. TASK TEAM MEMBERS
Name Role
Preparation
Artessa Saldivar-Sali, Kim Alan Edwards, Tevi Maltali Obed Task Team Leader(s)
Janet Virginia Gamarra Rupa Financial Management Specialist
David Bruce Whitehead Financial Management Specialist
David Bruce Whitehead Financial Management Specialist
William G. Battaile Team Member
Colleen Mary Gollach Team Member
Zhentu Liu Team Member
Duangrat Laohapakakul Counsel
Michelle Lee McDonall Team Member
Leisande Otto Team Member
Michael Bonte-Grapentin Team Member
Veronica Piatkov Team Member
Darian Naidoo Team Member
Laisa Duri Boedoro Team Member
Felix Peter Taaffe Team Member
Rachelle Therese Marburg Team Member
Anna Elizabeth Robinson Team Member
Philip Steven Bruce Martin Team Member
Karen Olivia Ventura Jimeno Team Member
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option (CAT-DDO)
(P168749)
Danielle Mary Okeefe Team Member
Rashad Hasanov Team Member
Janet Virginia Gamarra Rupa Team Member
Holly Patricia Woodcroft Team Member
Supervision/ICR
Artessa Saldivar-Sali, Kim Alan Edwards, Tevi Maltali Obed Task Team Leader(s)
Janet Virginia Gamarra Rupa Financial Management Specialist
Viliame Momoivalu Environmental Specialist
Holly Patricia Woodcroft Team Member
Rashad Hasanov Team Member
Danielle Mary Okeefe Team Member
Karen Olivia Ventura Jimeno Team Member
Georgina Elizabeth McArthur Team Member
Anna Elizabeth Robinson Team Member
Nathalie Suzanna Noella Staelens Environmental Specialist
Rachelle Therese Marburg Team Member
Laisa Duri Boedoro Team Member
Darian Naidoo Team Member
Veronica Piatkov Team Member
Michael Bonte-Grapentin Team Member
Leisande Otto Team Member
Michelle Lee McDonall Team Member
Duangrat Laohapakakul Counsel
Zhentu Liu Team Member
Colleen Mary Gollach Team Member
William G. Battaile Team Member
.
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option (CAT-DDO)
(P168749)
B. STAFF TIME AND COST
Staff Time and Cost
Stage of Project Cycle
No. of staff weeks US$ (including travel and consultant costs)
Preparation
FY19 11.269 218,814.05
FY20 27.212 233,467.41
FY21 2.525 8,327.86
FY22 0 26,159.56
FY23 0 461.00
Total 41.01 487,229.88
Supervision/ICR
FY20 5.111 43,569.66
FY21 5.255 158,997.28
FY22 9.745 80,547.91
FY23 0 1,718.54
FY24 0 2,931.19
Total 20.11 287,764.58
.
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option (CAT-DDO)
(P168749)
ANNEX 3. BORROWER, CO-FINANCIERS, AND OTHER DEVELOPMENT PARTNERS’/STAKEHOLDERS’
COMMENTS
From: John Robert Simelum <jsimelum@vanuatu.gov.vu>
Sent: Wednesday, May 22, 2024 1:42:38 AM
To: Tevi Obed <tobed@worldbank.org>; Laisa Duri Boedoro <lboedoro@worldbank.org>; Leisande Otto
<lotto@worldbank.org>
Subject: Re: Vanuatu First Cat DDO Operation: Implementation Completion and Results Report (ICR)_
for MFEM's feedback
[External]
Dear Tevi,
Firstly, our sincere apologies for the delayed reply.
The Government wishes to take a moment to express its sincere appreciation for the report your
WB has provided on the implementation completion and results of the first Cat DDO operation.
The outlined overall outcome ratings and justifications are commendable which highlight your
dedication to ensuring transparency and accountability in our initiatives.
We are committed to continuing our cooperation to meet the remaining result indicators by July
2024, that includes;
Result indicator 2.1 - the adoption and implementation of the land subdivision regulations. The
Debt unit will continue to assist and make follow up with the State Law Office and MoLNR.
Otherwise, please consider this email as confirmation that we have no additional comments on
the report at this time.
Once again, thank you for your valuable contributions and the excellent work you do.
Kind regards
John
From: Tevi Obed
Sent: Friday, May 3, 2024 12:25 PM
To: Tony Amos Sewen <tasewen@vanuatu.gov.vu>; John Robert Simelum <jsimelum@vanuatu.gov.vu>
Cc: Victoria Magdalinski <vmagdalinski@vanuatu.gov.vu>; Dimitri Buletare <dbuletare@vanuatu.gov.vu>;
Angella Faith Montfaucon <amontfaucon@worldbank.org>; Armando Guzman
<aguzman3@worldbank.org>; Georgina McArthur <gmcarthur@worldbank.org>; Gordon Willie
<gwillie@vanuatu.gov.vu>; Abraham Nasak <anasak@vanuatu.gov.vu>; pkorisa@vanuatu.gov.vu; Vica
Rosario Bogaerts <vbogaerts@worldbank.org>; Miguel Payawal Ferido <mferido@worldbank.org>; Laisa
Duri Boedoro <lboedoro@worldbank.org>; Margaret Christina Daniel <mdaniel2@worldbank.org>;
Leisande Otto <lotto@worldbank.org>; Darren Fatu <dfatu@vanuatu.gov.vu>
Page 31 of 34
The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option (CAT-DDO)
(P168749)
Subject: Re: Vanuatu First Cat DDO Operation: Implementation Completion and Results Report (ICR)_
for MFEM's feedback
Dear ADG Tony and John,
We are pleased to share the draft implementation completion and results report (ICR) for the 1st Cat
DDO Operation for your feedback. You can either insert your comments in Annex 3 (page 31) or send
it via email. Appreciate it if we can receive it by next week Friday May 10th so we can finalize the
Report.
Many thanks again for the collaborative effort and look forward to the completion of the land
subdivision regulations which is the only outstanding results target under this Operation.
Tenkiu tumas.
Tevi and team.
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option (CAT-DDO)
(P168749)
ANNEX 4. SUPPORTING DOCUMENTS
Australian Humanitarian Partnership. (2021, December 6). Vanuatu-Disaster Risk Reduction and Tropical
Cyclone Simulation Exercise, Canal Fanafo, Santo [Video]. Retrieved May 3, 2024, from YouTube:
htps://www.youtube.com/watch?v=3I3gP10_x7o&t=207s
Bonte-Grapen�n, M. (2024). A comparative Analysis of Post Disaster Needs Assessments. Unpublished
Report.
Government holds Na�onal Subdivision Planning and Resilient Setlement Workshop. (2021, June 25).
Daily Post Digital. Retrieved May 3, 2024, from htps://www.dailypost.vu/news/government-
holds-na�onal-subdivision-planning-and-resilient-setlement-workshop/ar�cle_adede342-d53a-
11eb-a2fd-4f80cc66d74c.html
Government of Vanuatu. (2019). National Land Subdivision Policy. Ministry of Lands and Natural
Resources. Retrieved May 3, 2024, from htps://mol.gov.vu/images/docs/Land-
policy/Vanuatu_Subdivision_Policy_English_April__2019.pdf
Government of Vanuatu. (2020). Tsunami Drill Report Luganville Santo December 2020. Unpublished
Report, Port Villa.
Government of Vanuatu. (2021). Subdivision Planning and Resilient Settlments Workshop. Ministry of
Lands and Natural Resources , Port Vila.
Government of Vanuatu. (2022, July 26). Debt Bulletin. Retrieved May 3, 2024, from Department of
Finance and Treasury: htps://do�.gov.vu/index.php/treasury/debt
Government of Vanuatu. (2024). Guidelines for Lodging and Approvals of Applications to Subdivide .
Memorandum Circular, Ministry of Lands and Natural Resources, Land Management Planning
Commitee .
PREPARED Interna�onal. (2021). Emergeny Preparedness and Response Capacity Assessment of Vanuatu.
Unpublished Report, Port Vila.
PREPARED Interna�onal. (2022). Vanuatu: Emergency Preparedness and Response Investment
Opportunities Report . Unpublished Report, 58.
Roberts, A. (2022, February 12). PDCCC and CDCCC responsible for TC Dovi impact assessment. Daily
Post Digital. Retrieved May 3, 2024, from htps://www.dailypost.vu/news/pdccc-and-cdccc-
responsible-for-tc-dovi-impact-assessment/ar�cle_91ae4534-d91e-5ec0-8e9d-
e06d6f9f6ca2.html
Tsunami evacua�on preparedness drill in Luganville. (2020, December 2019). Daily Post Digital.
Retrieved May 3, 2024, from htps://www.dailypost.vu/news/tsunami-evacua�on-preparedness-
drill-in-luganville/ar�cle_eece0f4e-4319-11eb-afda-47f154d3c832.html
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The World Bank
Vanuatu Disaster Risk Management Development Policy Grant with a Catastrophe-Deferred Drawdown Option (CAT-DDO)
(P168749)
WorldData.info. (2022, April ). Cyclones in Vanuatu. Retrieved 2024 3, May, from WorldData.info:
htps://www.worlddata.info/oceania/vanuatu/cyclones.php
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