House approves $100 million Loan Facility for Disaster Emergencies

 NASSAU, The Bahamas – A Resolution to approve the Contingent Loan for Natural Disaster Emergencies in the amount of $100 million was passed in the House of Assembly on Wednesday, January 30, 2019.

Revised Statute Law of The Bahamas 2000 provides for The Bahamas to enter into an agreement with the Inter-American Development Bank to borrow funds for the purpose of financing or promoting economic and social development in the country.  The bank has agreed to grant the government financing of up to $100 million for the purpose of funding the Natural Disaster Emergencies Programme.

It was one of two Resolutions tabled in the House by Prime Minister, the Most Hon. Dr. Hubert Minnis.

The other Resolution passed was for the government to borrow $30 million from the Inter-American Development Bank for the Government’s Digital Transformation to Strengthen Competitiveness Project.

During his contribution, the Prime Minister noted that The Bahamas has been plagued with three consecutive major hurricanes: Joaquin in 2015, Matthew in 2016 and Irma in 2017.

“All Bahamians are, unfortunately, too keenly aware that one of the effects of the global warming phenomenon is the increase in the frequency and strength of tropical hurricanes or cyclones around the world,” the Prime Minister said.

He pointed out that in The Bahamas, this is not a matter of theory; but has been a reality over the last two decades.

“The hurricanes over this time period have cost countries hundreds of millions of dollars in damage to private and public assets, and in lost economic opportunity,” he added.

“As Prime Minister, one of my responsibilities is to ensure that the country does as much as we can to be as prepared as possible to respond to natural disasters and thus minimize the potential loss of lives, and that we are able to recover as quickly as possible to get our communities and the economy back on track as soon as possible following these catastrophic events,” he said.

According to the Prime Minister a key part of any readiness plan is to have access to resources as quickly as possible, to speed up the response and recovery efforts.

“Thus I am pleased to support this $100 million contingent loan facility.   It is a line of credit that is on standby in the event the country is hit by a hurricane and needs additional funds to respond and to recover,” the Prime Minister said, adding that it is hoped that the country would never have use for the facility.

“By design and by our own government policy, this is not monies that can be accessed to do anything other than to respond to natural disasters.  Any prudent government would do what we are doing – that is to have the ability to access funding if and when needed,” the Prime Minister said.

The loan facility will complement the proposed disaster relief fund, which will be set up from the proceeds of extinguished dormant accounts, as was announced by the Prime Minister in the House of Assembly weeks ago. The Government will bring legislation to this effect and the fund will be seeded with an estimated $41 million at its inception.

The Prime Minister also said that his administration took the decision to sign up, once again, for the Caribbean Risk Insurance Facility — the regional insurance fund — to provide coverage for public infrastructure in the event of catastrophic damage.

 “And finally, we have agreed to this IDB credit line facility to provide ready access [to] up to $100 million in borrowed funds,” he said.

Taken together, these will ensure that there is an ample source of cash readily available to the government so that it can respond quickly, he said.

“The government is, then, better positioned to save lives, and secure property.   Once the event has passed, this will mean that the government can more readily mobilize the contractors and vendors to get the country back to a state of normalcy,” the Prime Minister said.

By Lindsay Thompson