The Bahamas gets IDB funds to build financial resilience against natural disasters

WASHINGTON, Jun 29, CMC – The Bahamas will strengthen its natural disaster risk financing plan and build resilience of its public finances against the impacts of climate change with a US$100 million contingent loan from the Inter-American Development Bank (IDB).

The Washington-based financial institution said the financing is aimed at “structuring a stable and efficient ex-ante financial coverage that will allow the Bahamas to pay for any extraordinary public expenses in a timely manner that could arise from emergencies caused by severe or catastrophic natural disasters.

“The operation will pave the way for the country to alleviate the impact that a severe or catastrophic natural disaster could have on its finances, by increasing the availability, stability, and efficiency of contingent financing to address emergencies.”

Moreover, it said the operation seeks to enhance the country’s comprehensive disaster risk management by fostering improvements in five main policy areas.

These policy areas are: Disaster risk management governance; risk identification; risk reduction; preparation for emergency and response; and financial protection and risk transfer.

The IDB noted that the Bahamas is highly exposed to natural hazards, particularly hurricanes, stating that, in the past 50 years, 18 hurricanes have hit the territory.

“Given the increasing intensity and frequency of extreme weather events associated with the impacts of climate change, in the last three years alone, three major hurricanes have made passage through the country and inflicted substantial damage,” the IDB said.

“By providing ex-ante financing, the IDB is helping The Bahamas broaden and deepen its financial strategy to address and recover from natural disasters, supporting the government’s immediate response capacity and protecting its fiscal balance,” the statement said. (Via CMC)