Koror, Palau – Palau’s government debt reached $191.6 million in 2023, equivalent to 60% of the country’s gross domestic product (GDP). This figure combines both national government debt and debt held by state-owned enterprises (SOEs).
- National Government Debt: The national government owed $129.1 million in 2023. A significant portion of this debt ($90 million) is attributed to loans obtained for COVID-19 recovery efforts, including loans from the Asian Development Bank’s Rehabilitation and Reconstruction Program for Small Economies (RISES).
- State-Owned Enterprise Debt: SOEs such as the Palau Public Utilities Corporation (PPUC), Palau National Communications Corporation (PNCC), Belau Submarine Cable Corporation (BSCC), and Palau National Development Bank (NDBP) collectively held $78.7 million in debt in 2023. This amount includes:
- $23 million for submarine cable loans
- $22 million for the Koror-Airai Sewer Project (KASP) co-financed by PPUC
- $13 million for PNCC’s Rural Utilities Sector (RUS) loan
- $3.8 million each for housing and agriculture loans from NDBP
Debt Reduction Efforts:
A World Bank report indicates that Palau’s public debt is currently at 60% of GDP. The Compact Review Agreement between Palau and the United States allocates $10 million over the next five years specifically for debt servicing. This initiative aims to reduce the debt to $141 million, approaching the pre-pandemic level of $140 million recorded in 2020.