The deadly storm ripped through the island on Thursday and Friday, destroying homes, tearing down trees and disrupting telecommunications and electrical supplies.
A New Zealand air force surveillance flight found "moderate to severe damage in an area about 25 miles across," on the southwest of the island of Ambrym and smaller islands nearby, New Zealand's Foreign Ministry reported.
"The crew has reported that thatched roofs have been torn from houses. Debris and litter are extensive, and trees are either stripped bare or uprooted," Ministry officials stated. Damage to other islands was "fairly minor".
Telecommunications and electricity supplies were still disrupted in some parts of the archipelago as well.
The Vanuatu Red Cross has begun a major relief program, as the full impact of Cyclone Ivy becomes clear.
Interim Chief Executive, David Neal, said the Red Cross had been active on the main island of Efate since the storm hit.
Volunteers are now distributing 400 family kits from existing disaster preparedness stocks to the island of Paama, where a reported 90 percent of the population is affected.
Each kit contains a range of non-food items, such as tarpaulins, water tablets, water containers, kitchen utensils and hygiene kits.
The head of the International Federation's delegation in the Pacific, Leon Prop, says the need for support will continue over coming weeks.
"Our immediate priority will be to provide a further 2,000 family kits to cover housing and shelter needs for affected people, with the support of the donor community," he said.
The Red Cross operation is being supported by the governments of Australia, France and New Zealand. The New Zealand Red Cross has also donated $10,000 for relief items and is sending an experienced relief worker to Vanuatu, while the International Federation is sending staff from Papua New Guinea and Fiji to assist.
Vanuatu, a nation of 200,000 people, lies 1,400 miles northeast of Sydney, Australia.
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