Country receives US$115 million from CDB

THE Barbados economy has received a much needed injection of US$115 million from the Caribbean Development Bank (CDB).

CDB’s Board of Directors has approved US$75 million to support the Barbados Economic Recovery and Transformation  (BERT) plan, and an additional US$40.4 million to expand and rehabilitate the Grantley Adams Interntaional Airport (GAIA).

Yesterday morning around 11 a.m., Prime Minister Mia Amor Mottley and CDB’s President Dr William Warren Smith signed the agreements for the loans at the Bank’s headquarters.

The US$75 million, which is a policy-based loan, will support Government’s programme which includes revenue, administration and collection, expenditure and debt management, public financial management, and broad-based growth and social development. 

Meanwhile, the US$40.4 million is going towards upgrading the infrastructure and services at GAIA, including the Airport’s Pavement and Rehabilitation and Expansion Project; to support improved quality of infrastructure at GAIA; improve the institutional capacity of GAIA Inc; and reduce energy consumption from pavement lighting at the airport.

Prime Minister Mottley told the Board of Directors of the CDB and members of the media who witnessed the signing, that she is now satisfied that the country is on a trajectory that would allow the economy to be successful over the course of the medium term for the benefit of the people of Barbados. 

However, she reminded that the country will not recover just by hope, but through taking steps such as the partnership with the CDB and with the International Monetary Fund (IMF).

“We said from the very beginning that the importance of the Economic Recovery and Transformation Plan was to be able to allow us to give confidence to those entities, especially in the context of a programme that led to debt restructuring and a failure on the part of the country to now be able to access international capital markets for the next few years.

Hence, we would need to work with the international financial institutions and countries on a bilateral basis, in order to be able to seek and receive the funding necessary to both stabilise and transform Barbados,” Prime Minister Mottley noted.

Dr. Smith said the policy-based loan represents CDB’s commitment to helping Barbados restore economic stability and achieve sustained growth. He said underpinned by considerable analytical and technical work and stakeholder consultation, it lays the foundation for scaled-up support from the CDB to Barbados over the medium to long term.

“We commend the Government of Barbados for the notable progress it has made to urgently adjust the country’s macroeconomic situation, and acknowledge the strong commitment to restoring fiscal stability, which it has demonstrated,” Smith said.

The policy-based loan to the Government of Barbados was designed to align with national priorities, and developed in close consultation with the country’s Social Partnership, its ministries, departments and agencies. In addition, it reflects ongoing collaboration between the IMF, the Inter-American Development Bank, the World Bank, and the CDB, with respect to Barbados’ macroeconomic situation.

The US$75 million loan is the first of a series of four programmatic interventions proposed over the next four years. This intervention will assist the Government with the implementation of the BERT plan, focusing on immediate fiscal consolidation and stabilisation policies, social sector reforms, and competitiveness and growth-enhancing reforms for economic and social development, resilience building and sustainability.

In August, CDB’s Board of Directors approved a grant of US$400 000 to help the Government of Barbados further develop its economic reform programme, setting in motion the Bank’s plan to support the country’s return to sustained economic growth.

Mottley said the significant works at GAIA should begin next year, noting the loan from the CDB that would be going towards that project, has saved the country “almost another 30 million dollars that we were on track to spend”.

“When we came in, this was not financing that we found for this project. Indeed, the financing that was there would have been almost doubled in interest cost to the country and my Government stopped it immediately, asked the CDB to review yet again a project that had been paused for some time, and almost abandoned. The CDB in less than four months could pick it back up, review it, analyse it and get to the Board, is once again another reason for gratitude. We thank you on behalf of the people of Barbados. When we talk about boosting capital works, this is the kind of activity that we need, and at the same time, we will ensure that Grantley Adams International Airport will continue to maintain high standards with respect to its core mandate, which is to allow planes to travel safely into Barbados and to leave safely out of Barbados,” Prime Minister Mottley said.