US$9 million in financing will help protect essential services and keep fiscal and resilience reforms on track
MAJURO, June 5, 2026 – The World Bank has approved an additional US$9 million in financing to help the Republic of the Marshall Islands respond to sharply higher energy costs that are placing pressure on families, businesses, public services, and the national budget.
The assistance provides immediate budget support through an existing Marshall Islands Development Policy Operation. The original US$21 million operation was approved in July 2024 to support stronger fiscal management and disaster and climate resilience. This additional financing brings total World Bank support under the operation to US$30 million, while a further US$12 million in contingent financing remains available in the event of an eligible catastrophe.
“This support comes at an important time for Marshall Islands as we work to protect our people from rising costs and maintain essential services,” said Marshall Islands Minister of Finance, David Paul. “We are committed to managing this crisis responsibly while continuing our work toward stronger public finances, greater energy security, and long-term resilience.”
Marshall Islands is one of the world’s most fuel-import-dependent economies. With a heavy reliance on imported energy, food, and essential goods, the country has been hit by disruptions in global energy markets. Fuel costs have tripled, the fuel import bill has increased by around US$40 million, equivalent to 11.5 percent of GDP, and growth in FY26 is now expected to slow from a pre-crisis baseline of 4.1 percent to 2.0 percent. Inflation is projected to reach 8.6 percent this fiscal year.
Higher fuel costs are being felt across the economy. Fishing activity, the country’s largest source of export earnings and government revenue, is expected to decline. Families are facing higher prices for electricity, food, and transport, with outer-island communities particularly exposed because they depend on sea freight for essential supplies.
“This crisis is placing real pressure on families, services, and the national budget,” said Omar Lyasse, World Bank Resident Representative for the North Pacific. “This support gives the Government critical breathing room while continuing the reforms needed to build a stronger, more resilient economy.”
The Government declared a State of Economic Emergency on March 26, 2026, and has taken steps to cushion households, stabilize essential services, and contain fiscal pressures. The World Bank’s additional financing will help support this response while preserving progress on reforms to strengthen public financial management, disaster preparedness, and climate resilience.
The World Bank is also supporting Marshall Islands’ longer-term energy transition through the Renewable Energy Generation and Access Increase Project, which aims to reduce the country’s dependence on imported diesel.
Preparation of the World Bank’s supplemental financing was supported by the Africa Caribbean Pacific-European Union Disaster Risk Management Programme, managed by the Global Facility for Disaster Reduction and Recovery.
