Deputy Prime Minister and Minister of Finance Peter Turnquest tabled a special loan proposal in the House of Assembly yesterday, aimed at strengthening the government’s strategy on disaster preparedness.
The government worked with the Inter-American Development Bank (IDB) to structure a five-year, $100 million IDB contingent line of credit to secure access to emergency financing in the immediate aftermath of a natural disaster.
Resources from the facility are only to be used for damage in the aftermath of a severe hurricane, and can be accessed within seven days after the passage of a hurricane.
Importantly, there are no costs associated with the facility unless and until the government draws down on the loan following a natural disaster, the ministry said. That means no interest applies unless and until funds are used.
“This is important because it provides the government access to a substantial sum of money to immediately address critical needs in the aftermath of a hurricane or other natural disaster. However, it has no budgetary implications unless we have need for the money,” Turnquest said.
Resources from the loan facility can only be used for the procurement of goods and services deemed eligible for the execution of restorative/temporary work and to assist in the provision of basic necessities to persons in the affected areas. While the facility spans a period of five years, the government can request an extension for the existence of the facility.
“The threat of catastrophic natural disasters and increasing severity of hurricanes has the capacity to bankrupt nations.” Turnquest said.
“This is why the government has developed a multi-pronged and diversified strategy for disaster preparedness. The combination of this $100 million line of credit, the insurance coverage under the Caribbean Risk Insurance Facility and the planned establishment of the disaster relief fund recently foreshadowed by the prime minister – are all placing the country in the best possible position to respond quickly to the ever present threat of hurricanes and other natural disasters.”