Washington, D.C. April 10, 2025 - The World Bank Group's Board of Executive Directors approved today new financing for Barbados that will help the country quickly access financial resources in case of an emergency, so it can respond faster and support its people.
The $30 million Disaster Risk Management Development Policy Loan will help Barbados build stronger systems to manage natural disasters and health emergencies. It includes a Catastrophe Deferred Drawdown Option (Cat DDO) - an innovative World Bank financing instrument - that will provide a fast-access line of credit to support a timely and effective response once an emergency is declared.
This project arrives at a critical time for Barbados. Despite its strong economic recovery, the country remains highly vulnerable to natural hazards. In 2024, Hurricane Beryl passed within 150 kilometers of the island, causing damage estimated at 1.4 percent of GDP and severely affecting the fisheries and tourism sectors. Rising sea levels and stronger hurricanes are predicted to intensify risks in the years ahead. Public health emergencies, such as the COVID-19 pandemic, have also shown the importance of having reliable, flexible funding to respond rapidly and protect essential 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. To access the Cat DDO, Barbados will implement a set of key reforms focused on two core areas: enhancing financial resilience and strengthening physical planning and livelihoods. This will involve introducing policies to improve disaster risk financing, developing scalable social protection mechanisms, enacting legislation to support sustainable fisheries, strengthening coastal and marine management, and storm water management.
This initiative complements the recently approved Barbados Beryl Emergency Response and Recovery Project, that supports the rehabilitation of the fisheries sector, Bridgetown Port, and critical infrastructure damaged by Hurricane Beryl. Together, these operations form an integrated approach to resilience and disaster preparedness in Barbados.
"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, World Bank Division Director for the Caribbean.
Barbados joins other Caribbean countries that are using Cat DDOs to build financial buffers and institutional capacity to handle increasing disaster risk, including Saint Vincent and the Grenadines, Jamaica, Grenada, Dominica, and Saint Lucia.
Financial support for technical assistance for necessary policy reforms was and will continue to be provided by the European Union through the EU Resilient Caribbean Program, managed by the Global Facility for Disaster Reduction and Recovery.
Learn more about our work in the Caribbean:
Website: www.worldbank.org/caribbean
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