KINGSTON, Jamaica, Wednesday November 7, 2018 – The next time a natural disaster strikes, Jamaica will be better prepared. That’s because a US$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,” the IDB said.
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 per cent of its GDP.
The IDB notes that 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 IDB financing is funded from the Bank’s Ordinary Capital, has a maturity period of 25 years and a grace period of 5.5 years. The executing agency will be Jamaica’s Ministry of Finance and the Public Service.