The World Bank Group has launched a new Small States Strategy during a high-level delegation visit to the Pacific, signaling a major push to strengthen economies, create jobs, and open procurement opportunities across some of the world's most vulnerable island nations. Announced on March 9, 2026, the initiative covers 49 small states worldwide and is backed by a $2.7 billion active portfolio of 75 projects across 11 Pacific Island countries alone. For contractors, consultants, and suppliers, the Pacific is quietly becoming one of the most opportunity-rich regions in international development.
What Was Announced
A senior World Bank Group delegation — led by Felipe Jaramillo, Vice President for East Asia and the Pacific; Sarvesh Suri, IFC Regional Vice President for Asia and the Pacific; and Gallina Vincelette, Vice President for Operations Policy and Country Services — visited Fiji, Papua New Guinea, Australia, and New Zealand to introduce the strategy and announce a series of concrete initiatives.
The new Small States Strategy addresses the structural vulnerabilities of small island economies — limited domestic markets, high exposure to climate shocks, narrow export bases, and constrained fiscal space — through three pillars: job creation, resilience building, and private sector-led growth. These are not abstract goals: the delegation signed agreements, launched projects, and announced procurement reforms during the visit.
The strategy arrives at a critical moment. The Pacific region's economic growth has slowed from 5.5% in 2023 to 3.8% in 2024, with medium-term projections hovering at just 2% — roughly one percentage point below pre-pandemic levels. At the same time, the World Bank estimates that 1.2 billion young people in developing countries will reach working age over the next 10 to 15 years, but only 400 million jobs are expected to be created. In small island states, this employment gap is even more acute.
The Pacific Portfolio: 75 Projects Across 11 Nations
The World Bank Group currently maintains 75 active projects across its 11 Pacific Island member countries — the Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, Palau, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu — with total commitments of $2.7 billion through a combination of World Bank financing, trust funds, and co-financing arrangements.
These 11 nations span 2.3 million people spread across 15% of Earth's surface, making them among the most logistically challenging places to deliver development projects. That geographic reality translates directly into procurement demand: remote island infrastructure requires specialized contractors, maritime logistics expertise, climate-resilient engineering solutions, and localized consulting services.
Priority sectors for the portfolio include:
- Climate-resilient transport — the Pacific Climate Resilient Transport Program funds road and bridge upgrades across multiple countries
- Health systems — strengthening primary and secondary healthcare services, especially for rural and remote populations
- Financial connectivity — safeguarding correspondent banking relationships that keep Pacific economies connected to global markets
- Energy transformation — renewable energy development and grid modernization
- Tourism infrastructure — airport upgrades and road construction to support tourism-driven growth
Papua New Guinea: AgriConnect and One Million Jobs
One of the most significant announcements during the visit was the launch of AgriConnect in Papua New Guinea — a World Bank initiative co-financed by IFAD (the International Fund for Agricultural Development) and the Asian Infrastructure Investment Bank (AIIB). Launched on March 3 in Goroka, this marks the first AgriConnect collaboration between the World Bank and IFAD in the Asia-Pacific region.
AgriConnect directly supports PNG's ambitious target of creating one million rural jobs by 2033, as outlined in the National Agriculture Sector Plan (NASP) 2024-2033 launched by Prime Minister James Marape. The program aims to transform PNG's subsistence farming into commercial agriculture by addressing four key barriers to private sector investment:
- Digital agriculture technologies to connect farmers with service providers and buyers
- Improved aggregation models linking smallholder farmers with agribusinesses
- De-risking financial instruments to encourage private investment in rural areas
- Policy and regulatory reforms to reduce the cost of doing business
For procurement professionals, AgriConnect will generate opportunities across several contract types:
- Technology consulting — design and deployment of digital agriculture platforms
- Agricultural supplies — seeds, fertilizers, equipment, and storage systems
- Infrastructure works — rural roads, cold chains, processing facilities, and market infrastructure
- Financial advisory — designing de-risking instruments and agricultural finance products
The co-financing arrangement with IFAD and AIIB means procurement for the PNG Agriculture Commercialization and Diversification Phase 2 (PACD-2) project will follow multilateral procurement guidelines, opening opportunities for international firms alongside local contractors.
IFC Partners with BRED Bank for Fiji SME Financing
On the private sector front, IFC announced a partnership with BRED Bank (Fiji) to expand lending to small and medium enterprises across Fiji's outer islands and remote communities. The deal, signed on February 27, provides an unfunded risk-sharing facility of FJD 13.5 million (approximately $6 million) under IFC's Small Loan Guarantee Program, enabling BRED Bank to build a loan portfolio of up to FJD 27 million ($12 million) targeting underserved rural SMEs.
Backed by the IDA Private Sector Window — a facility designed to catalyze investment in the world's poorest and most fragile countries — the partnership targets labor-intensive sectors including:
- Agriculture — farming inputs, equipment, and value chain businesses
- Fisheries — commercial fishing operations and processing
- Small-scale tourism — guesthouses, tour operators, and hospitality services
IFC's Regional Vice President Sarvesh Suri stated the initiative aims to "help close Fiji's financing gap and support vibrant businesses to create more jobs." For suppliers and service providers, this means Fiji's SME sector will have significantly more purchasing power in the coming years, creating downstream demand for goods and services.
Fiji's Energy Transformation and Tourism Infrastructure
The delegation also signed a Grant Facility for Project Preparation agreement to support Fiji's energy transformation — a critical step toward moving from fossil fuel dependency to renewables. While specific dollar amounts for this facility were not disclosed, it positions Fiji for larger infrastructure investments in solar, wind, and grid modernization that will require specialized engineering, equipment supply, and construction contracts.
Meanwhile, Fiji's tourism sector is already seeing substantial World Bank investment through the Na Vualiku Project in Vanua Levu, the country's second-largest island. Key components include:
- Labasa Airport runway strengthening — a $18.6 million upgrade currently underway (the airport is temporarily closed from February 16 to March 27, 2026, for pavement works)
- Savusavu Airport upgrades — planned improvements to accommodate ATR-72 regional aircraft
- Labasa-Savusavu road upgrade — currently in a 12-month design and supervision phase
- Benefits expected for over 60,000 residents of the Northern Division
These tourism infrastructure projects create direct procurement opportunities in civil works, engineering consulting, construction materials supply, and project management.
Procurement Reforms Open Doors for International Firms
Perhaps the most directly actionable announcement for procurement professionals was the delegation's engagement with business leaders and government counterparts in New Zealand and Australia on new procurement reforms.
These reforms aim to expand competition on World Bank-financed projects while enhancing local labor participation — a balance that creates openings for both international firms and Pacific-based businesses. The World Bank's Pacific Procurement team has developed templates and guidance, with support from Australia's Department of Foreign Affairs and Trade (DFAT) and New Zealand's Ministry of Foreign Affairs and Trade (MFAT), to help Pacific countries navigate procurement processes.
For international contractors, this means:
- Clearer procurement pathways for bidding on World Bank-financed projects across 11 Pacific nations
- Standardized templates reducing the administrative burden of working in multiple small jurisdictions
- Local content requirements that create partnership opportunities with Pacific-based firms
- Enhanced transparency in how contracts are awarded and managed
Countries and Regions to Watch
The immediate procurement impact is concentrated in several Pacific nations:
- Fiji — tourism infrastructure, energy transformation, SME financing expansion, airport and road construction
- Papua New Guinea — AgriConnect agricultural transformation, digital technology deployment, rural infrastructure
- Solomon Islands — part of the broader World Bank Pacific portfolio with active infrastructure projects
- Vanuatu — climate resilience projects and transport infrastructure
- Tonga — the Sustainable Economic Corridors and Urban Resilience project proposed under the ADB-World Bank partnership initiative
- Samoa — health system strengthening and climate adaptation
Beyond the Pacific, the Small States Strategy covers 49 countries across four regions: 14 in Africa (including Mauritius, Cabo Verde, and Seychelles), 13 in the Caribbean (including Jamaica, Trinidad and Tobago, and Barbados), 12 in the Pacific, and 10 in Europe and Asia. Contractors working in any of these markets can expect increased World Bank engagement and project activity.
What This Means for Contractors
The World Bank's Pacific push creates a clear set of opportunities for firms positioned to work in challenging island environments:
- Civil engineering firms should monitor World Bank procurement notices for airport upgrades, road construction, and climate-resilient infrastructure across the Pacific
- Agricultural technology providers should explore the PNG AgriConnect pipeline, which will need digital platforms, precision farming tools, and agri-logistics solutions
- Financial and management consultants will find demand in SME capacity building, energy sector reform advisory, and procurement process design
- Construction materials suppliers should note that remote island locations create premium demand for pre-fabricated structures, renewable energy components, and marine transport-compatible building materials
- Environmental and climate consultants are particularly well-positioned given the Pacific's extreme vulnerability to sea-level rise, cyclones, and coral reef degradation
Firms with experience in IDA-eligible countries and fragile and conflict-affected situations may have competitive advantages, as several Pacific nations fall into these categories and benefit from concessional IDA financing.
Looking Ahead
The World Bank's next major Pacific milestone is the Small States Forum, where the strategy's implementation will be reviewed alongside financing commitments from donor governments. Fiji's chairmanship of the forum ensures Pacific voices will shape how resources are allocated.
With $2.7 billion already committed and fresh procurement reforms taking effect, the Pacific Islands are no longer a niche market for international development contractors. The World Bank's Small States Strategy signals that these nations will receive sustained, increasing attention from the world's largest development institution. Firms that establish a presence now — through partnerships with local businesses, registration on World Bank procurement platforms, and familiarity with Pacific logistics — will be best positioned to capture these opportunities.
---
Find Related Tenders on BidsFactory: