ADB, Australia Strengthen Pacific Partnership on Infrastructure and Growth

The Asian Development Bank (ADB) and the Government of Australia have reaffirmed their shared commitment to advancing sustainable infrastructure, private sector development, and inclusive growth in the Pacific region.

During a meeting between ADB President Masato Kanda and Australian Prime Minister Anthony Albanese, the two leaders praised the long-standing partnership between ADB and Australia and discussed how to further align their development strategies to meet the Pacific’s evolving needs.

Focus on Quality Infrastructure

Kanda emphasized that high-quality, resilient infrastructure is key to connecting Pacific communities, enabling trade, and building long-term economic opportunities.

“ADB and Australia share a commitment to quality infrastructure that connects communities, builds resilience, and creates lasting economic opportunities for Pacific nations,” said Kanda. “We look forward to continuing our work together, supporting private sector development across the region, for growth that transforms the lives of the poor and most vulnerable.”

ADB currently has $3.5 billion in active Pacific projects, many of which are co-financed with Australia and other partners. These projects span transport, energy, water supply, and climate resilience.

Australia’s Role in the Asian Development Fund

Kanda also recognized Australia as a strategic partner in ADB’s operations, highlighting its substantial role in the Asian Development Fund (ADF). With a $328 million contribution to ADF 14, Australia is one of the largest donors, helping finance vital projects in small island developing states and other vulnerable economies across the Pacific.

Procurement Reforms to Boost Quality Outcomes

The meeting also reviewed ADB’s ongoing procurement reforms, designed to ensure that contracts deliver better long-term outcomes. ADB has mandated the use of merit point criteria in evaluating bids—prioritizing technical strength, experience, and capacity to deliver rather than focusing solely on price.

Since 2020, 80% of large-value contracts in 13 Pacific countries have adopted this approach, leading to:

• More competition among contractors.

• Higher-quality delivery of infrastructure projects.

• Increased participation of local workers and businesses.

These reforms are aligned with the Pacific Quality Infrastructure Principles, which stress sustainability, resilience, and inclusivity in project design and delivery.

Strengthening the Private Sector

Beyond infrastructure, the leaders highlighted the critical role of private sector development in generating sustainable growth and employment.

ADB and Australia’s flagship initiative, the Private Sector Development Initiative (PSDI), has been at the forefront of this effort. Since its launch, PSDI has supported reforms to improve the business environment, foster entrepreneurship, and promote inclusive business models across the Pacific.

• Australia has contributed $26.4 million (75% of total funding) to the current Phase 4 of PSDI (2020–2026).

• Between 2021 and 2024, Australia also provided $428.5 million for nonsovereign project cofinancing and $63.1 million for the Trade and Supply Chain Finance Program.

These interventions have helped Pacific economies modernize business laws, strengthen access to finance, and encourage women’s entrepreneurship.

Looking Ahead

The meeting between Kanda and Albanese reaffirmed the importance of long-term, coordinated partnerships to ensure the Pacific’s resilience in the face of climate change, economic shocks, and global market volatility.

With Australia’s leadership and ADB’s financial and technical expertise, the two partners aim to position the Pacific as a region of inclusive, sustainable growth—where investments in infrastructure and private enterprise are matched by progress in social protection, gender equality, and climate resilience.