Almost $142 million will enter the stream of hurricane relief funds for Grand Bahama and Abaco from the Caribbean Catastrophe Risk Insurance Facility (CCRIF SPC), the Inter-American Development Bank’s (IDB) contingent line of credit and the government’s own contingency funding.
CCRIF SPC announced on Friday that it will pay The Bahamas US$10,936,103, after deadly Hurricane Dorian devastated Abaco and Grand Bahama one week ago, while the IDB also announced on Friday that the contingent line of credit government secured from it earlier this year is now available for the hurricane relief effort.
Deputy Prime Minister and Minister of Finance Peter Turnquest told Guardian Business yesterday that $1 million is available from the government’s own relief fund and $30 million is available from the dormant account fund that was approved this year.
“Outside of this, we will see what is required and request parliamentary approval once assessments are done,” Turnquest said.
A report from Karen Clark & Company contended Dorian’s damage costs could reach $7 billion. The company explained that this cost includes “building, contents and business interruption exposures for commercial, residential and industrial properties”. The estimate did not include infrastructure or auto losses.
CCRIF SPC’s press statement on the release of funds explained that 50 percent of the almost $11 million payout was provided to the government on Friday and the remaining 50 percent will be paid within 14 days.
“The Bahamas has three tropical cyclone policies with CCRIF, each one covering a section or zone of the archipelago – North West, South East and Central,” CCRIF SPC stated.
“It is the tropical cyclone policy for the North West Zone – which includes the Abaco Islands and Grand Bahama – that was triggered. Dorian made landfall on September 1, and battered the Abaco Islands and Grand Bahama, in the north of the archipelago, for two days.”
CCRIF SPC’s Chief Executive Officer Isaac Anthony explained in the statement that the facility will continue to support The Bahamas through its corporate social responsibility or technical assistance (TA) program.
“Over the years CCRIF has provided resources from its TA program to governments to support specific projects after a natural disaster,” the statement noted.
“In fact, The Bahamas was the recipient in 2012 of a TA grant of US$85,000 following the passage of Hurricane Sandy for the construction of a new sea wall at Sandyport Beach. The CCRIF board and management will decide on possible TA support to The Bahamas in collaboration with the government in the coming weeks.”
Anthony added: “Member governments are appreciative of this rapid infusion of quick liquidity through CCRIF payouts from its parametric insurance policies, which they are able to use to address immediate priorities and to support the most vulnerable in their population.
“CCRIF, through the parametric insurance products that it provides, is an example of a disaster risk financing tool that is most applicable for high impact, low-frequency events; and the instrument is designed to allow member governments to reduce their budget volatility and to provide some amount of financial resources for emergency relief such as restoring critical infrastructure and providing assistance to the affected population, thereby assisting to reduce post-disaster resource deficits.”
The IDB said in its statement that its contingency funding comes on top of an initial emergency donation of $200,000.
“The loan disbursement is subject to eligibility requirements including sustained wind speeds, accumulated precipitations and impacted populations,” the IDB statement pointed out.
“All the requirements were met by the devastation Hurricane Dorian caused in the Abaco and Grand Bahama regions, in the northern Bahamas.
“The bank’s assistance will support government efforts to provide the required relief to the affected populations. Hurricane Dorian has caused unprecedented loss of life to the country, damage to public infrastructure and private property on several islands. It has left tens of thousands of residents in urgent need of food, water, shelter, medicine and other necessities.”
According to the IDB statement, “The contingency loan has a repayment term of 25 years, a 5.5-year grace period and an interest rate based on LIBOR (London Interbank Offered Rate)”.