St. Vincent and the Grenadines has secured $20 million in financial support from the World Bank Group to enhance its disaster resilience capabilities. The funding, approved by the World Bank Group’s Board of Executive Directors, aims to provide St. Vincent and the Grenadines with quick financial access during emergencies.
The $20 million funding is delivered through the Disaster Risk Management Development Policy Financing. It includes a Catastrophe Deferred Drawdown Option (Cat DDO), which offers a fast-access credit line to enable a timely response when emergencies arise. The initiative builds upon previous fiscal interventions such as the Second Fiscal Reform and Resilience Development Policy Credit, which proved critical after the La Soufrière volcanic eruption in 2021.
St. Vincent and the Grenadines, despite recent progress, faces significant risks from natural hazards, such as intensified storms, shifting rainfall patterns, and coastal erosion. These factors stress infrastructure, ecosystems, and local livelihoods. For instance, Hurricane Beryl's impact on July 1, 2024, caused extensive economic damage, amounting to 22 percent of the nation's 2023 GDP.
The Cat DDO provides St. Vincent and the Grenadines access to emergency financing contingent upon the government implementing disaster preparedness reforms. These reforms include updating land use regulations, adopting a national disaster management policy, enhancing school safety protocols, and improving coordination for climate commitments. There is also a focus on ensuring financial transparency by creating a budget classification for disaster-related finance.
“This program reflects St. Vincent and the Grenadines’ strong commitment to proactive disaster risk management and resilience building,” said Lilia Burunciuc, World Bank Division Director for the Caribbean. “By combining timely financing with strategic policy reforms, the Catastrophe Drawdown Option is helping the country better protect its people, economy, and future from the growing threat of natural hazards.”
The initiative aligns St. Vincent and the Grenadines with other Caribbean nations, including Barbados, Grenada, Dominica, Jamaica, and Saint Lucia. These countries are strengthening institutional capacity and financial resilience with the support of Cat DDOs. The funding is supported by the International Development Association, the World Bank’s division for assisting low-income countries and small island economies. Additionally, technical and financial assistance was provided by the European Union and the Canada-Caribbean Resilience Facility through the Global Facility for Disaster Reduction and Recovery.