US announces $450M in COFA grants for Palau, FSM and Marshall Islands
By Pacific Island Times News Staff
Palau, the Federated States of Micronesia, and the Marshall Islands will receive more than $450 million in economic assistance under the Compact of Free Association, which establishes new agreements to strengthen security ties between the United States and the freely associated states.
The U.S. Department of the Interior announced the fresh grants following the annual meetings it hosted in September with the Joint Economic Management Committee and the Joint Economic Management and Financial Accountability Committee.
Known as JEMCO and JEMFAC, these committees are established under the compact agreements, approve annual funding allocations and oversee the effective use of compact funds.
“The efforts and focus of this year’s meetings reflect the Trump-Vance administration’s commitment to strengthening national security, protecting American interests, countering malign influence in the Pacific and ensuring American taxpayer dollars are used in a fiscally responsible manner,” said William W. Hague, assistant secretary for Insular, International and Ocean Affairs, U.S. Department of the Interior.
The COFA Amendment Act of 2023, which renewed the treaties with individual island nations, provides $7.1 billion in U.S. economic assistance and federal programs to the freely associated states over 20 years, in exchange for exclusive U.S. defense rights.
Officials said the September discussions focused on strengthening development planning, aligning annual operating budgets with long-term priorities and establishing measurable performance indicators to track progress.
“The freely associated states, while independent, sovereign countries, are uniquely interwoven with the United States through a shared history, ongoing partnership and a common vision for a free and open Indo-Pacific,” Hague said.
“The participation of senior officials from the United States and these Pacific nations underscores our shared commitment to cooperative planning, transparency and responsible management of these funds,” he added.
Fiscal year 2027 funding allocations include:
Palau: More than $41 million to support health care, education, infrastructure projects, the Infrastructure Maintenance Fund and the Fiscal Consolidation Fund.
Federated States of Micronesia: $140 million to support health, education, infrastructure, environmental programs, private-sector development and capacity building.
The Marshall Islands: More than $171 million to support payments to Kwajalein landowners, health care, education, environmental programs, capacity building, the U.S. Supplemental Health Fund and improved financial reporting and accountability.
Compact health and education grants fund nearly all annual operating costs for education and health care services in the Federated States of Micronesia and provide significant support for those services in the Marshall Islands and Palau.
Infrastructure grants support the construction of schools, hospitals, water and wastewater systems and other projects that promote economic development.
The Marshall Islands will also receive $100 million as the final U.S. contribution to its Compact Trust Fund.
The trust fund was renewed under COFA Amendments Act of 2023 to support the nation's long-term fiscal self-reliance.
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On Oct. 2, FSM President Wesley W. Simina signed an executive order “Implementing on a Temporary and Transition Basis Interim Subrecipient Monitoring and Compact Fund Accounting Measures.”
The order implements temporary measures for Compact fund accounting and subrecipient monitoring, to be implemented by the Department of Finance and Administration.
These measures are intended to ensure continued compliance with Compact requirements, strengthen financial accountability and oversight, and prevent disruptions to Compact-funded programs pending legislative action.
These interim measures are particularly important in safeguarding Compact assistance that supports essential public services throughout the FSM, especially in the health and education sectors.
Compact funding supports the salaries of teachers, healthcare professionals, and other public servants, as well as the procurement of medicines, vaccines, medical supplies, and educational programs.
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