Australia and Vanuatu have finalized a ten-year strategic partnership through the Nakamal Agreement, valued at A$500 million (approximately US$326.5 million). This significant accord aims to enhance economic and security cooperation, focusing on infrastructure development, economic growth, and climate resilience initiatives.
The finalization of the agreement follows a magnitude 7.3 earthquake that struck near Port Vila in December 2024, causing substantial damage and loss of life. Vanuatu's Prime Minister, Jotham Napat, described the agreement as a mutually beneficial "win-win" situation, anticipating benefits in trade, security collaboration, and labor mobility programs. Australian Deputy Prime Minister, Richard Marles, highlighted the shared security landscape and mutual commitments, referring to a "shared destiny" between the two nations. The Nakamal Agreement will also serve as a framework for recovery and reconstruction efforts post-earthquake. The seismic event on December 17, 2024, resulted in at least 14 fatalities and 265 injuries, with widespread damage to infrastructure. Australia has committed approximately A$110 million to support Vanuatu's climate resilience and reconstruction efforts. The earthquake's economic impact was estimated by the USGS to be between 1–10% of Vanuatu's GDP, affecting an estimated 116,000 people. The formal signing of the Nakamal Agreement is anticipated in September 2025, pending internal ratification processes. The agreement is projected to facilitate approximately $50 million in annual support to Vanuatu, fostering increased cooperation and mutual prosperity. This initiative aligns with Australia's broader Pacific strategy, emphasizing sustainable, climate-resilient infrastructure and economic reform.