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Vanuatu Delays A$500 Million Pact With Australia Over Funding Flexibility Concerns

The pause comes as Pacific leaders in Honiara move to launch a region-run climate resilience fund.

Overview

  • Prime Minister Anthony Albanese confirmed the Nakamal Agreement would not be signed during his Port Vila visit, though he and Prime Minister Jotham Napat reported good progress.
  • Napat said ministers want wording changes because they fear the pact could limit access to third‑country infrastructure finance, with concerns explicitly touching on Chinese funding.
  • The agreement envisions around A$500 million over a decade for climate resilience, security and development, positioning Australia as Vanuatu’s principal security and development partner.
  • The delay coincides with a tightly controlled Pacific Islands Forum in the Solomon Islands after the host barred most dialogue partners, as Australia and China showcase rival influence including Australia’s gift of 61 vehicles and Chinese donations of additional fleets.
  • Australia continues to court regional consensus with a pending defence treaty in Papua New Guinea and support for the Pacific Resilience Facility and an Ocean of Peace declaration expected to be endorsed by leaders.