U.S. expands Pacific Islands support with $150 million funding package

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U.S. expands Pacific Islands support

Highlights

The U.S. Department of State announced more than $150 million in support for Pacific Islands countries, with funds targeting infrastructure, energy security, and private sector-driven growth.
Major allocations include a planned $60 million Regional Energy Security Initiative and port, airport, and hospital feasibility upgrades across Tonga, Palau, the Cook Islands, and the Marshall Islands.
U.S. initiatives will expand digital investment through feasibility studies and technical assistance, $17 million for combating illegal fishing, and strengthened regional security, commercial, and regulatory efforts through 2027.

Funding package targets infrastructure and energy

As reported by U.S. Department of State, citing Deputy Secretary Christopher Landau, on September 1 more than $150 million in support for Pacific Islands countries was unveiled at the Pacific Islands Forum Partners Dialogue in Palau, including new projects tied to infrastructure, energy security and private sector-led growth.

The package includes a planned $60 million Regional Energy Security Initiative to help Pacific Island countries respond to the global energy crisis through expanded fuel storage and stronger grid stability. In Tonga, the U.S. Trade and Development Agency, with State Department funding, is backing a feasibility study to upgrade port facilities, fuel storage, pipeline infrastructure and regulatory practices aimed at improving fuel supply reliability.

Washington is also backing a range of transport and public infrastructure projects. In Palau, the U.S., Australia, Japan, New Zealand, the Republic of Korea and Taiwan are supporting development and operation of a new hospital, subject to a feasibility study. In the Cook Islands, the State Department says it intends to upgrade Omoka Port on Penrhyn atoll in partnership with New Zealand and the Cook Islands, building on a critical minerals framework signed in February 2026.

In the Marshall Islands, USTDA has approved technical assistance for modernization of the ports at Majuro and Ebeye, with a focus on freight capacity, port efficiency and supply chain reliability. It has also approved assistance for modernization of Amata Kabua International Airport, with planned improvements to airfield and terminal facilities over a 20-year horizon.

Digital investment and security cooperation deepen regional reach

Alongside physical infrastructure, the U.S. is expanding digital and commercial initiatives across the Pacific. Washington intends to support a second Pacific Investment Summit in early 2027 after the inaugural Honolulu event in February 2026 generated business deals across sectors including infrastructure, critical minerals, energy, tourism, food security, financial services and the digital economy.

For Tonga, USTDA is supporting a feasibility study to modernize the national data center and network, while the Marshall Islands is set to receive technical assistance for nationwide mobile network modernization. The State Department also plans to broaden its Cloud Global Pacific Program beyond Tonga and Palau to help more Pacific governments adopt resilient cloud-based technologies and strengthen cybersecurity and digital service continuity.

The digital push is paired with regulatory and commercial efforts. The Bureau of Cyberspace and Digital Policy has funded programs coordinated by the Commerce Department's Commercial Law Development Program to strengthen ICT regulation and licensing frameworks, while a U.S.-Pacific Islands digital conference generated 32 matchmaking sessions between U.S. technology companies and Pacific governments.

Security cooperation is also widening. The U.S. and Palau will co-chair the inaugural U.S.-Pacific Islands Conference of Police Ministers, focused on maritime security, drug trafficking, cybercrime and illicit finance, while the State Department plans to provide $17 million to counter illegal, unreported and unregulated fishing.

Additional measures include support for seabed mapping and mineral-related technical work, as well as an Environmental Protection Agency drinking water sampling project in Palau with Taiwan. The Peace Corps has also signed a letter of intent to establish a North Pacific program with the Federated States of Micronesia, the Marshall Islands and Palau, after completing the re-opening of Peace Corps/Palau in July 2026.

Our earlier coverage of the growing political backlash against large U.S. data centre projects explained how community opposition is increasingly tied to concerns over electricity costs and local disruption, putting a significant pipeline of AI-related infrastructure at risk of delays or cancellations. The report also noted that tensions in energy markets can amplify these pressures, as higher fuel and power costs raise the political and financial stakes around electricity-hungry buildouts.

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