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The proposed knowledge and support technical assistance (TA) will support Pacific island countries to objectively analyze the costs and benefits of available urban investment options, to plan, design and prioritize investments, assess technical suitability, economic, financial and social viability, capacity and institutional issues, address environmental and social safeguards and, identify measures to strengthen project implementation capacity of urban investment projects. At the same time, the countries need to develop institutional, policy and human resource capacity to effectively plan and manage urban investments, so that social and economic benefits are maximized. ADB continues to receive requests from Pacific DMCs to assist in addressing challenges they face. The proposed knowledge and support TA will serve as a facility to support Pacific DMCs in making informed and strategic decisions on urban investments by supporting necessary activities such as capacity development, training, knowledge sharing and dissemination, technical advice, peer reviews etc.

The proposed TA will support the Pacific Approach 2016-2020 strategic priority of enabling value creation by promoting livable and economically vibrant urban areas , supporting projects that will help governments with long-term urban planning to ensure that services can be sustained, and encourage private sector and civil society organization (CSO) involvement in the provision of urban infrastructure and services. The proposed TA will also support the Pacific Approach to provide (i) stronger, better, faster project delivery through expanded use of regional approaches and faster delivery mechanisms, and (ii) improved generation and sharing of knowledge.

The Pacific region is rapidly urbanizing as a result of internal migration and natural population increase, with 44% of the Pacific's population, excluding Papua New Guinea, now living in urban areas. In the region's smallest countries, such as the Cook Islands, at least three out of every four residents are already urban dwellers. And larger Pacific developing member countries (DMCs) that are still predominantly rural, such as Solomon Islands, have the highest urbanization rates, recognizing the growing interest to invest in urban infrastructure.

Urban growth in Pacific DMCs has been largely unplanned, resulting in inadequate basic urban infrastructure services such as water supply, sanitation, flood control, and urban transport; a shortage of affordable serviced land and housing. Squatter settlements are proliferating, natural resources are becoming overexploited, and increasing numbers of citizens are vulnerable to flooding and natural disasters. Reversing the deterioration in living conditions in the Pacific region's growing towns and cities is essential if they are to become livable and economically vibrant environments.

In the most rapidly urbanizing Pacific DMCs, the bulk of urban growth is taking place in unserviced informal settlements, particularly in peri-urban areas, often located on customary land, outside of town boundaries. In tourism-dependent economies such as Palau, the lack of adequate urban environmental infrastructure to manage growing volumes of solid and liquid wastes is contributing to the degradation of the surrounding natural environment, which has the potential to undermine tourism growth. In small, low-lying atoll countries such as the Marshall Islands, urbanization is increasing the exposure of people and critical urban assets to climate change risks.

The limited capacity to plan, prepare, manage, and coordinate urban investments; inadequate revenue streams to finance and maintain such investments; and poor accountability for the quality of urban service delivery all contribute to the challenge of promoting more sustainable urban development in Pacific DMCs. Many Pacific DMCs lack the strategies needed to sustainably plan and manage urban development in their cities and towns. Where strategies and plans for the urban sector do exist, preparation and implementation is often constrained by the lack of capacity and resources to undertake thorough investment preparatory work.

Recent ADB urban-related investments and TAs in the Pacific helped prepare sector analysis, reviewed urban policy and conducted project preparatory related assessments. The demand-driven approach and close consultations with host governments led to successful delivery of these outputs. ADB continues to receive requests from Pacific DMCs to assist in in project preparatory work and addressing urban challenges, providing implementation support, technical advice, capacity development and assisting in knowledge production.