The Vanuatu government plans to clear the remaining VUV871 million vatu (USD7.3 million) debt that Air Vanuatu (NF, Port Vila) owes to the Vanuatu National Provident Fund (VNPF) by December 2027.
Deputy Prime Minister and Finance Minister Johnny Koanapo said the government had signed a deed of guarantee to formalise the repayment plan, the Vanuatu Daily Post newspaper reported.
Air Vanuatu originally borrowed VUV1 billion (USD8.4 million) in two tranches from the national social security system. The outstanding balance reached VUV1.1 billion (USD9.4 million) by May 2024. The debt accumulated after the airline defaulted during the COVID-19 pandemic while accruing 6.75% interest per annum, alongside a 2% penalty rate.
As reported by ch-aviation, the government previously committed to a 90-day settlement window after the parties signed a guarantee agreement on October 24, 2025. The state made an initial VUV250 million (USD2.1 million) payment toward the principal and accrued penalties at that time. It now targets a December 2027 deadline to settle the balance.
The VNPF recorded a VUV127 million (USD1.1 million) impairment provision against the loan in its 2024 annual report after Air Vanuatu entered liquidation.
According to the newspaper, the first VUV340 million (USD2.8 million) tranche was disbursed in 2009, with the remaining VUV660 million (USD5.5 million) following in 2013.
