Overview:
After months of delay, the House of Delegates has finally approved a resolution allowing Palau to borrow $15 million from the Saudi Fund for Development to expand housing loans. The decision clears the way for the National Development Bank of Palau to offer more affordable financing for home construction and purchases.
By: L.N. Reklai
KOROR, Palau (Dec. 17, 2025) — After months of delay, the House of Delegates has approved a joint resolution allowing President Surangel S. Whipps Jr. to borrow $15 million from the Saudi Fund for Development, clearing the final legislative hurdle for new funding aimed at low-cost development loans.
The measure authorizes the government to channel the loan through the National Development Bank of Palau (NDBP). It specifies it will be used to expand housing loans for Palauan families and developers.
The resolution, House Joint Resolution 12-2-1, SD1, gives the president authority to enter into the loan agreement and on-lend the funds to NDBP for home construction, home purchases and related infrastructure. Lawmakers described the financing as long-term and relatively low-cost, allowing NDBP to offer more affordable housing loans.
President Whipps has publicly criticized the delay in passing the resolution, saying the loan would provide affordable capital that “helps the people” by making financing easier to access.
Debt and oversight concerns raised
During Senate discussions, several senators raised concerns about adding to Palau’s external debt, the risks tied to government guarantees, and NDBP’s existing loan exposure. Some questioned whether both the government and NDBP had strong enough systems to manage risks related to currency changes, interest rates and loan defaults.
Others asked for assurances that the loan would not push out private banks and that the benefits would reach ordinary Palauans, rather than only large developers or a small group of borrowers.
Administration, NDBP defends the loan
Administration officials and NDBP representatives told lawmakers the Saudi Fund loan comes with concessional terms, meaning it is cheaper and more flexible than commercial borrowing. They said this makes it suitable for long-term housing loans with lower monthly payments.
Officials said NDBP will continue to follow existing banking rules, internal credit policies and reporting requirements to both the Olbiil Era Kelulau and the Ministry of Finance. They also argued the loan would expand the housing finance market by serving borrowers and loan terms that private banks have been reluctant to offer, rather than competing with them.
Final vote clears the way forward
In the House, members echoed some of the fiscal and governance concerns raised in the Senate but ultimately agreed that Palau’s housing needs and the favorable loan terms justified moving forward.
After debate, the House voted to adopt the Senate-amended version of the resolution, completing legislative approval.
With the resolution now passed, President Whipps is authorized to finalize the loan agreement with the Saudi Fund for Development and direct the $15 million to NDBP — a move the administration says will finally turn long-awaited low-cost financing into new homes and housing projects for Palauan families.