Barbados has secured a US$30 million loan from the World Bank aimed at strengthening the nation’s disaster response systems and boosting resilience against natural and public health emergencies.
The financing comes through the Disaster Risk Management Development Policy Loan, which includes the Catastrophe Deferred Drawdown Option (Cat DDO)—a rapid-access credit line that allows the government to quickly access funds in the event of an emergency.
This mechanism ensures Barbados can mobilize resources immediately after a crisis, avoiding the typical delays associated with traditional funding channels.
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According to the World Bank, the loan comes at a pivotal moment. While Barbados has shown signs of strong economic recovery, it remains significantly exposed to natural disasters. In 2024, Hurricane Beryl skirted the island, causing damages equivalent to 1.4% of its GDP and severely impacting its vital tourism and fisheries sectors. With climate change accelerating sea-level rise and increasing the severity of storms, the risks to the country are mounting. The COVID-19 pandemic further underscored the need for flexible financing to safeguard critical services.
“The Cat DDO will provide Barbados with a vital financial buffer, allowing the government to respond swiftly to emergencies without diverting resources from other priorities or compromising long-term development goals,” the World Bank stated following the loan’s approval by its Board of Executive Directors.
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To access the funds, Barbados will implement key reforms centered around two pillars: enhancing financial resilience and improving physical planning and livelihoods. These reforms will involve disaster risk financing measures, scalable social protection systems, legislation for sustainable fisheries, and enhanced management of coastal, marine, and stormwater resources.
“Barbados, like many small states, is working to build resilience amidst severe and growing shocks. The Catastrophe Drawdown Option will strengthen the country’s ability to respond swiftly when disasters strike and protect its people and communities,” said Lilia Burunciuc, the World Bank’s Division Director for the Caribbean.
This initiative builds on the recently approved Barbados Beryl Emergency Response and Recovery Project, which supports rehabilitation of critical infrastructure, including Bridgetown Port and the fisheries sector, damaged by Hurricane Beryl.
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Barbados now joins several other Caribbean nations—such as Jamaica, Dominica, Saint Lucia, Grenada, and St. Vincent and the Grenadines—that are using Cat DDOs to bolster financial readiness and institutional capacity to handle rising disaster risks.
The European Union, through the EU Resilient Caribbean Programme and in collaboration with the Global Facility for Disaster Reduction and Recovery, has provided and will continue to provide technical assistance to support the necessary policy reforms.
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