US, Micronesia forge stronger ties with $3.5b infrastructure deal

In a significant development for the Federated States of Micronesia (FSM), a landmark infrastructure agreement worth US$3.5 billion (NZ$6.2b) has been established, signalling a new era in the United States-FSM relations.

This initiative, centred in Yap, is expected to attract over US$2b (NZ$3.5b) in future investments, strengthening US military capabilities while fostering local development.

In a recent meeting in Guam, FSM President Wesley Simina and US Secretary of Defence Pete Hegseth highlighted their renewed commitment to defence cooperation under the Compact of Free Association (COFA).

COFA consists of treaties between the US and FSM, the Marshall Islands, and Palau.

The partnership helps bolster US military readiness in the Indo-Pacific region. It also provides financial assistance and the right to work in the US for citizens of these three Pacific nations.

“The leadership and values of Yap State are guiding this process,” Simina says. “The Four Pillars [environment, safety, maintenance and social aspects] ensure that this cooperation is not only strategic, but also deeply rooted in local values and long-term benefit for our communities.”

During the meeting, Simina outlined several key national priorities to Hegseth, including:

• Extension of the 333 Program to strengthen law enforcement and maritime security;

• Reinstatement of Civil Action Team (CAT) Camps to boost local infrastructure;

• Support for FSM veterans, including a framework to improve healthcare access;

• Addressing environmental concerns, particularly the removal of WWII-era oil in Chuuk Lagoon;

• Infrastructure priorities, such as maritime safety upgrades in Pohnpei and Kosrae.

President Wesley Simina and Secretary Pete Hegseth meet for bilateral discussions. Photo/FSM President Office

Simina also reaffirmed the FSM’s strong support for continued US military cooperation, including the work of the US Navy Seabees, the upcoming Pacific Partnership 2025, and Koa Moana 2025 deployments.

“As we enter this new chapter, we remain steadfast in our commitment to a free and open Indo-Pacific, and to a partnership with the United States grounded in mutual trust, shared values, and a vision of peace and progress for our Blue Pacific Continent,” the FSM leader says.

Last year, New Zealand’s Deputy Prime Minister and Foreign Affairs Minister, Vaovasamanaia Winston Peters, led the country’s first delegation to the FSM.

Wesley Simina and Winston Peters in the FSM during the NZ deputy prime minister's visit. Photo/PMN News/Ala Vailala

During this historic visit, Peters held the first bilateral meeting between a New Zealand Deputy Prime Minister and the FSM President in Pohnpei.

Peters also announced an investment of NZ$4.4 million to support UNICEF-led projects aimed at improving early childhood development outcomes across the North Pacific.

Watch PMN News political reporter Ala Vailala's update on Winston Peters' Micronesia trip.