NUKU'ALOFA, May 16 2025 - Tongans will benefit from stronger public finances, increased energy efficiency, and enhanced disaster preparedness under a new phase of World Bank support aimed at strengthening fiscal sustainability and resilience to climate shocks and natural disasters.
The operation, approved by the Bank's Board of Executive Directors, will support key government reforms to improve public finances and ensure early warning systems and emergency assistance reach those most at risk from natural hazards and climate shocks.
Tonga faces some of the highest levels of disaster risk globally, with events like the eruption of Hunga Tonga-Hunga Ha'apai and frequent cyclones disrupting lives, livelihoods, and infrastructure. High fuel costs and a narrow tax base further strain public finances and household budgets. The Tonga Second Fiscal, Disaster, and Climate Resilience Development Policy Operation will help address these challenges by strengthening government systems and supporting investments that deliver direct benefits for communities.
The program includes reforms to reduce inefficient tax exemptions and introduce energy efficiency standards to enhance household purchasing power and reduce reliance on costly imported diesel. It also supports improvements to debt transparency and enhances early warning systems through legislation enabling disaster alerts via mobile phones, even in remote outer islands.
"This support from the World Bank will help Tonga to manage shocks more effectively and build a stronger foundation for sustainable growth," said Hon. Dr. 'Aisake Eke, Prime Minister of Tonga and Minister for Finance. "The reforms within the package will improve revenue mobilization, energy efficiency, and disaster preparedness, so that our communities are better protected, and our economy is more resilient."
New rules for nationwide disaster alerts via mobile phones will help save lives by giving people, including women, children, and those in remote communities, more time to prepare and evacuate. Improved debt reporting and revenue systems will also enable the government to invest more efficiently in essential services like health, education, and infrastructure.
The reforms supported under this operation are expected to benefit the entire population of Tonga by ensuring more reliable access to services, greater protection from climate and disaster risks, and a more stable economic environment.
"Tonga continues to show leadership in putting long-term resilience and fiscal discipline at the heart of its development path," said Stefano Mocci, World Bank Country Manager for the South Pacific. "These reforms will deliver real benefits for people, especially the most vulnerable, and help ensure Tonga is better prepared for the future."
This operation is financed through a US$12 million grant from the International Development Association (IDA), the World Bank's fund for the world's most in-need countries.
