THE NEXT TIME A NATURAL DISASTER STRIKES, JAMAICA WILL BE BETTER PREPARED
A $285 million contingent loan from the Inter-American Development Bank (IDB) will bolster the nation’s response efforts and help protect its public purse.
The IDB financing allows Jamaica to pay for any extraordinary public expenses that could arise from emergencies caused by natural disasters. The loan is intended to buffer the financial shock of a disaster on the Jamaica’s fiscal balance. Thereby, increasing the nation’s financial stability and efficiency as well as its disaster preparedness and response.
With a population of more than 2.7 million Jamaica ranks 19th in the world for its exposure to natural disasters, which include hurricanes, earthquakes and droughts. Between 1988 and 2012, eleven named storms made landfall in Jamaica. It’s estimated that hurricane Gilbert cost Jamaica 28% of its GDP.
As the effects of climate change intensify, Jamaica can expect extreme weather events to become more frequent and more intense, resulting in greater impacts on the environment, economy and population. Moody’s financial rating service lists Jamaica as among the four most vulnerable small island countries when it comes to the credit implications of climate change.
The contingent financing is funded from the IDB’s Ordinary Capital, has a maturity period of 25 years, a grace period of 5.5 years, and an interest rate based on LIBOR. The executing agency will be Jamaica’s Ministry of Finance and the Public Service (MOFPS).
About the IDB
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.