The Senate passed a joint resolution to approve the $20 million loan between Palau and Asian Development Bank for Palau’s Disaster Resilience Program. The joint resolution is expected to pass the House today.
President Surangel Whipps Jr. in his statement this March to the press regarding the
loan said that having this funding available will help Palau to address disaster response
quickly and also to recover quickly.
In his letter to OEK requesting ratification of the loan agreement, the President said, “The new loan agreement will provide us with a source of contingent financing for immediate disaster response and early recovery…By proactively planning ahead, we will continue to be well prepared for both the impacts of the pandemic and other potential short-term post-disaster financing needs.”
In 2018, Palau was able to secure a $15million dollar Disaster Resilience Program loan
in anticipation of handling severe natural disasters and their impacts. Palau had just
experienced two super typhoons back to back in 2012 and 2013, Typhoon Bopha and
Typhoon Haiyan, highlighting the need for funding for such emergencies. One of the conditions of the loan was that it cannot be drawn down unless a National Emergency is declared.
When COVID-19 hit in 2020, and with a need for the funding to mitigate the impact of
the pandemic on people’s livelihoods, the language was modified to include world-wide
health emergencies. The $15 million was drawn down last year to help fund financial
shortfalls due to COVID impact.
In December, Palau and Asian Development Bank signed a new loan agreement of $20
million to replenish the Disaster Resilience Program.
The loan will have a 20-year term, with a 3-year grace period and repayments based on
“disbursement-linked amortization schedule.” The interest rate is based on LIBOR plus
.5 percent. There’s no annual maintenance charge and no maturity premium payable to

Leave a comment

Your email address will not be published. Required fields are marked *