The New Zealand aid agency NZAID is to help with the construction of two key roads in Vanuatu.
The New Zealand High Commissioner Jeff Langley says it fits with the agency's aim to provide access to economic opportunity for people in rural communities.
He says they are two of the first infrastructure projects planned by the United States' Millennium Challenge Corporation, which had found it could not fully fund them.
Mr Langley says it will include the completion of the ring road on the main island of Efate, a project already underway, while New Zealand will have greater involvement on the road up the east coast of Santo from the country's second largest town, Luganville.
He says along with the road builders, New Zealand company, Downer EDI, they have concluded that a metal road is the most suitable.
"We've been talking to them about what sort of road, given the traffic volumes and the kind of long-term maintenance requirements are going to make the most sense in Santo. And the conclusion seems to be that an unsealed road, provided it's done to the right standard with the neccessary road engineering and particular attention paid to drainage, which is one of the major downfalls in roading in tropical countries where you do get incredible deluges of water."