Vanuatu is vulnerable to the impacts of climate change, including rising temperatures and sea levels, unpredictable rainfall and intensifying cyclones. The country is one of the most disaster-prone in the world and experienced several major natural disasters in 2023. Vanuatu aims to transition to close to 100 per cent of its electricity generation from renewables by 2030 as part of its Nationally Determined Contribution (NDC). In its NDC, Vanuatu also aims to have 20 per cent biodiesel blending in diesel by 2030. 

In 2023, MDF identified the following opportunities to mitigate climate change and increase climate resilience, and hopes to commence new interventions in these markets in 2024: 

• Sandalwood and cocoa: There are opportunities to improve extension advice to farmers to support more effective adaptation to climate change.

• Renewable energy: There are opportunities to increase access to finance or more efficient payment systems that enable uptake of solar products, including rooftop solar PV systems, particularly on outer islands.

• Inter-island shipping: High diesel costs prevent operators from expanding services or lowering freight rates. MDF is negotiating a partnership with one operator to develop coconut biodiesel to lower costs and avoid using fossil fuel.