Since March, the Marshall Islands has been current with its monthly loan payments to ADB and has cleared off all outstanding loan payments, a fact that has been favorably noted at the bank’s Manila headquarters, said ADB Marshall Islands desk officer Kyoshi Nakamitsu.
“The Marshall Islands cleared its past due dating to 2005 and is paying every month,” he said Friday. “This has normalized relations between the Marshall Islands and ADB.”
The Marshall Islands owes more than $60 million to ADB for loans received in the 1990s and early 2000s, and is paying about $4 million this year — more than 10 percent of the country’s locally generated revenues.
As a result of the government’s action to keep current on loan payments, “ADB is considering mobilizing a large chunk of funding for the Marshall Islands,” Nakamitsu said. ADB has funded only a few technical assistance programs to the Marshall Islands in recent years, but no loans or grants have been on the table until this recent improvement in relations.
A $3 million grant has been approved in principle by ADB and is awaiting final sign off by top officials at the Manila-based bank, said Nakamitsu.
The grant aims to support improvements for the government’s power utility company, including the purchase and installation of pre-paid meters for customers to reduce debt owed to the utility — now over $5 million — and an experiment with bio-diesel fuel using a coconut oil mix to determine its feasibility.
The ADB is also keen to assist public service reform, but Nakamitsu cautioned that the ADB has no intention of driving reforms in the government here.
“The ownership of this has to be under the Marshall Islands government,” he said. “It must be home grown. If the government agrees to a plan and brings it to ADB, the bank will be happy to support it.”
