TARAWA, December 17, 2025- Kiribati is set to strengthen public finances, improve delivery of essential services, and boost climate resilience through a new package of reforms supported by the World Bank. The program will help deliver more transparent budgeting, fairer and more efficient taxes, stronger state-owned enterprises, cleaner communities, and safer homes designed for a changing climate.
A central focus of the reforms under the Kiribati Second Resilient Growth Development Policy Operation with a Catastrophe Deferred Drawdown Option (Cat DDO) is modernizing Kiribati's legislative framework to strengthen public finances. A new Public Financial Management Bill will reduce the time taken to publish audited government accounts from almost two years to just six months, improving transparency and public trust. Tax reforms will ensure Value Added Tax (VAT) is applied fairly to imports and remove VAT from essential menstrual health products to reduce costs for women and girls.
State-owned enterprises will be strengthened through clearer operational and management rules and more consistent financial reporting. Government ministries will transition to prepaid electricity meters to prevent overdue bills, stabilizing the Public Utilities Board's cashflows which will help to maintain reliable power and water services.
To address pollution and waste in South Tarawa, a new program will introduce incentives to scrap and recycle cars. This will help clear abandoned vehicles from the lagoon and beaches while creating opportunities for local waste recovery jobs. Updated building standards will require elevated foundations and cyclone-resistant designs for new homes, paired with streamlined permits and training for local builders.
"We are proud to support Kiribati's ambitious reforms to strengthen public finances to build more resilient communities, and increase transparency," said Stefano Mocci, World Bank Country Manager for the South Pacific. "These collective efforts will improve service delivery and resilience, with real benefits for communities across South Tarawa and beyond."
The reforms aim to raise tax revenue, increase waste collection coverage in South Tarawa from 44 percent to 80 percent, and ensure that at least 80 percent of new buildings meet climate resilient construction standards by 2028.
These efforts are supported through USD 15 million in International Development Association (IDA) grant financing, worth approximately 5 percent of Kiribati's 2025 GDP. This grant includes USD 10 million for immediate budget support and USD 5 million through a Catastrophe Deferred Drawdown Option (Cat DDO) for contingent financing to accelerate disaster response. The initiative aligns with the Government of Kiribati's 20 Year Vision (KV20) and the Kiribati Development Plan 2024 to 2027.
