Overview:
The Asian Development Bank is putting the Pacific at the center of its next five-year strategy, with President Masato Kanda promising more Pacific-led development, greater use of grants and concessional financing, and stronger investment in climate resilience, renewable energy and regional connectivity.
By: L.N. Reklai
KOROR, Palau (Sept. 3, 2026)— The Pacific is not the edge of Asia and the Pacific for the Asian Development Bank but “at the center” of how the institution sees the region’s future, ADB President Masato Kanda said as he outlined a more Pacific-led approach to development financing.
Speaking on the sidelines of the 55th Pacific Islands Forum Leaders Meeting in Palau, Kanda said his decision to make the Pacific the setting for his first media interview since his re-election was deliberate.
He said his re-election should be viewed not simply as an endorsement of his first term, but as an instruction for the next five years.
“The Pacific is not the edge of our region for Asia and the Pacific, but it is at the center of how ADB thinks about the future,” Kanda said.
Kanda said the Pacific and Asia are connected when it comes to risks but remain less connected when it comes to economic opportunity. Global conflicts can quickly increase fuel, food and freight costs for island countries, while climate change, geographic isolation and high infrastructure costs add to their vulnerabilities.
ADB’s next phase will focus on improving those connections, including energy, digital infrastructure, ports, interconnectors, exchange points and common rules.
He cited the TamTam cable project in Vanuatu, which provides a second internet route so that a single cable break does not isolate the country.
ADB has committed $70 billion to the Pan-Asia power grid and Asia-Pacific digital highway, Kanda said. The bank has also amended its charter to unlock 50% more financing without requiring new capital and aims to increase private investment fourfold to $13 billion annually by 2030.
For the Pacific, Kanda said ADB is strengthening its presence and developing a new regional strategy based on priorities identified by Pacific governments.
That includes upgrading ADB’s North Pacific office, opening a new office in Micronesia and establishing a private-sector hub in Palau. The bank is also supporting renewable energy transitions and fiscal reforms.
Kanda emphasized that the approach will not impose a single development model on Pacific countries.
“We are setting out a new Pacific approach, regional strategy shaped by what you have asked of us,” he said. “Not we are imposing, but you told us what to do.”
The strategy will feature long-term programs tailored to individual countries, with more decisions made closer to communities and greater emphasis on listening to national priorities.
Kanda said ADB currently has $3.7 billion in projects underway in the Pacific, making it the region’s largest multilateral development partner. Much of the financing is provided through grants, he said, reflecting the need to avoid adding to the debt burdens of vulnerable island economies.
Through the Asian Development Fund, ADB can provide substantial grant financing. For lending, Kanda said the bank offers particularly generous terms for Pacific countries, including loans at 1% interest with 40-year repayment periods and a 10-year grace period.
For higher-income Pacific countries or those with little appetite for additional borrowing, ADB can instead provide technical assistance and policy advice, he said.
Climate resilience remains a major focus. Kanda acknowledged the Pacific’s exposure to cyclones, sea-level rise and coastal erosion, as well as the high cost of building infrastructure in small and remote economies.
ADB is developing a regional programmatic approach to climate action that combines resilient infrastructure financing, institutional strengthening and regional cooperation.
The initiative also seeks to streamline Pacific access to Green Climate Fund resources by reducing the number of applications and lowering transaction costs.
Kanda said the measure reflects ADB’s emphasis on Pacific-led development rather than simply increasing its lending.
“The most fundamental issue for development” is achieving tangible results on the ground and improving people’s lives, he said.
ADB assesses projects before approval based on expected economic, social and gender impacts, including who will benefit and how social risks will be managed.
Kanda acknowledged that projects do not always meet their original objectives. Construction delays, changes in government priorities, personnel changes, COVID-19 and global economic shocks can affect implementation.
ADB’s response, he said, must be to work closely with governments and remain “vigilant, flexible and agile” enough to adjust when circumstances change.
Kanda said the bank’s goal is ultimately a more connected and resilient Pacific, with ADB serving as a “steadfast anchor” as island countries pursue their own development priorities.