China funds VT54.9B road project in Ambae and Tanna

August 26, 2025 9:52 pm | Posted in Business News | Share now TwitterFacebook

By Nicholas Mwai.

A major infrastructure development is underway for Ambae and Tanna, with China financing a 39.5-kilometre road project valued at approximately VT54.9 billion (RMB 3.3 billion).

The project follows the signing of a Government Concessional Loan Agreement last December between Johnny Koanapo, Minister of Finance and Economic Management of Vanuatu, and Wang Kang, Vice President of the Export-Import Bank of China.

A concessional loan is a type of funding provided by governments or international institutions on more favourable terms than standard commercial loans.

These loans typically carry lower interest rates, longer repayment periods, and more flexible conditions, reducing the financial burden on borrowing countries.

In this case, the concessional loan enables Vanuatu to undertake large-scale infrastructure works while avoiding the immediate pressures of commercial lending.

Phase III of the Tanna project was formally launched with a groundbreaking two weeks ago. The project is part of the concessional loan from the Export-Import Bank of China, with the Ministry of Infrastructure and Public Utilities (MIPU) serving as the project employer.

Speaking at the ceremony, Minister of Infrastructure, Xavier Emmanuel Harry, confirmed that the loan agreement was signed during the Finance Minister’s visit to China last year. “The money for this project is around VT3.25 billion,” Minister Harry said, noting the level of investment in rehabilitating Tanna’s road network.

The signed contract, valued at RMB 3.3 billion, officially commenced on 25 December 2024, with a construction period of 50 months.

The project will cover 23.989 kilometres of road on Tanna and 15.536 kilometres on Ambae, including excavation, filling, paving, and culvert construction.

Once completed, the upgraded road network is expected to improve connectivity, support economic development, and strengthen access to essential services across both islands.