The Asian Development Bank has granted Vanuatu a $US500,000 grant to support relief from the Manaro volcanic eruption on Ambae.
The volcano has been erupting in phases since last year but has ramped up since March, prompting mass evacuations to neighbouring islands.
Asian Development Bank Pacific Director General Carmela Locsin said the new funds would go towards emergency shelter, medical kits, food, drinking water and other relief.
The bank said up to $US150,000 of the grant could be used for emergency and humanitarian costs incurred in the wake of the disaster.
In December last year, the bank provided a $US200,000 grant to Vanuatu which was used to fund repatriation Ambae residents after their evacuation in September.
Last week the bank announced it would scale up its Pacific presence with new country offices in seven countries and upgrades for four existing missions.