The World Bank Group has approved a $30 million loan for Barbados to enhance its disaster risk management capabilities. The financial support, in the form of a Disaster Risk Management Development Policy Loan, includes a Catastrophe Deferred Drawdown Option (Cat DDO), providing a rapid-access line of credit when emergencies like hurricanes or health crises occur.
Hurricane Beryl's proximity to Barbados in 2024 highlighted the island's vulnerability to natural disasters. The hurricane caused considerable damages, impacting sectors like fisheries and tourism. The Cat DDO aims to provide financial resilience by allowing the government to respond swiftly to emergencies without impacting other priorities. The project will focus on reforms to improve financial resilience and strengthen physical planning.
This new initiative complements the Barbados Beryl Emergency Response and Recovery Project and aims to offer an integrated response approach. Lilia Burunciuc, World Bank Division Director for the Caribbean, noted the importance of the Cat DDO option to build resilience for small states like Barbados against severe shocks.
Barbados will join other Caribbean countries in using Cat DDOs to bolster financial buffers against rising disaster risks. The European Union, through the EU Resilient Caribbean Program managed by the Global Facility for Disaster Reduction and Recovery, will continue to provide financial support for necessary policy reforms.