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Palau's COFA Trust Fund at $197,419,325

As of 31 December 2016, Palau’s total investment under the COFA (Compact of Free Association) Trust Fund is valued at $197,419,325.

According to the quarterly report to President Tommy E. Remengesau Jr, the fund grew at 7.74 percent last year. Since the trust fund inception in 1994 with an initial investment of $66 million, the fund has averaged 7.18 percent annual growth reaching its current investment value.

In his letter to President Remengesau on 20 January, Regis Emesiochel, chairman of the COFA Trust Fund board said that a complete and comprehensive report will be provided by consultant Raymond James & Associates with expert commentary on capital markets and performance assessment of the asset managers for each asset class following receipt of the full report.


In 1994, the United States and the Republic of Palau established a Compact of Free Association ending 49 years of direct American administration under the auspices of the U.N. Trusteeship Council.

The Compact Agreement established the trust fund which is intended to provide Palau $15 million in annual payments from 2010 to 2044, when the U.S. direct economic assistance is gradually zeroed-out.

A revised Compact Agreement signed by both countries in Honolulu, Hawaii in 2010 does not change the fundamental provisions of the original Compact; however, it does gradually reduce the financial support provided by the U.S. and extends the life of the direct economic assistance to 2024.


The U.S. Congress Government Accounting Office estimates that Palau received a total of $852 million between 1995 and 2009 - the first 15 years of the Compact.

Under the Compact, citizens of Palau are granted uninhibited access to reside and work in the United States and its territories, and eligibility to volunteer for service in the U.S. Armed Forces. In return, the agreement allows the United States to operate armed forces in Palau, to demand land for operating bases, and excludes the militaries of other countries without U.S. permission.

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