Marshall Islands gears for $160m rebuild of two hospitals

The Marshall Islands government is gearing to spend US$160 million for new hospitals at Majuro and Ebeye, the two cities in this western Pacific nation.

Marshall Islands Finance Minister David Paul said funding is now secured, with the plan to spend $100m for Majuro hospital and $60m for Ebeye's new facilities. Majuro has a population of about 20,000 and Ebeye about 9000.

Although some earlier estimates suggested the cost could run as high as $200m or more for both facilities, Paul said the $160m has been endorsed by government as the cap for the two projects combined.

"For $100 million we're not going to get a coconut hut," Paul said in an interview last week.

Majuro hospital's first phase - a new surgical ward - was completed in 2019. But while funding for other phases was available at the time, the hospital plan became mired in bureaucratic red tape, preventing further construction.

The Asian Development Bank (ADB) will be a major player in the hospital redevelopment plan for the Marshall Islands.

For Majuro hospital, ADB will provide a $50m concessional low-interest loan and $10m in grants, while the $40m balance will be funded by carry-over funding from the second Compact of Free Association's funding package, which ended in 2023 but with leftover infrastructure funds that can still be used, Paul said.

Meanwhile, for Ebeye, an ADB grant of $27m will be combined with $33m from the Kwajalein Development Fund that is capitalised by US funding in the Compact to support the project.

The ADB is beginning a preliminary assessment for Ebeye hospital, while a design firm was hired earlier for Majuro hospital and has already started work, Paul said.

"ADB will manage both projects," Paul said. "The money is there."

He pointed out that the $50m concessional loan from ADB for Majuro hospital comes with a 10-year grace period during which only annual interest of $300,000 per year is repaid.

A 30-year payback period for the overall loan will follow the grace period with about $1.7m per year in debt payments to ADB.

"It's manageable," Paul said.