Washington, D.C., April 10, 2025 - The World Bank Group's Board of Executive Directors has approved new financing to help St. Vincent and the Grenadines quickly access financial resources in case of an emergency, so it can respond faster and support its people.
The US$20 million Disaster Risk Management Development Policy Financing will help St. Vincent and the Grenadines manage disaster risk while also supporting comprehensive policy reforms to enhance national preparedness and resilience. 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. It builds on previous initiatives, including the Second Fiscal Reform and Resilience Development Policy Credit with a Cat DDO, which provided critical financing in the aftermath of the La Soufrière volcanic eruption in 2021.
While St. Vincent and the Grenadines has made important progress in recent years, significant vulnerabilities remain. More frequent and intense storms, shifting rainfall patterns, and worsening coastal erosion are placing growing strain on infrastructure, ecosystems, and livelihoods. Prolonged droughts are affecting water security and agriculture, and the combination of steep terrain and unregulated development increases the likelihood of landslides and flash flooding. These compounding pressures threaten public safety, disrupt essential services, and reveal gaps in disaster preparedness and long-term planning. This was also demonstrated by the impact of Hurricane Beryl, the most powerful hurricane to impact the country since 1875, which made a landfall on July 1, 2024, causing estimated economic damage of US$230.6 million (22 percent of 2023 GDP).
Through the Cat DDO, St Vincent and the Grenadines will have access to US$20 million in emergency financing that can be rapidly deployed in the event of a disaster. To access this funding the government has introduced a series of reforms aimed at strengthening disaster preparedness. These include the modernization of regulations governing land use and environmental assessments; the adoption of a national disaster management policy that empowers communities, especially the most vulnerable; the updating of school safety protocols to ensure resilient educational infrastructure; enhanced coordination mechanisms for implementing climate commitments; and the creation of a dedicated budget classifier to improve tracking and transparency of disaster-related and climate 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."
St. Vincent and the Grenadines joins a growing group of Caribbean nations-including Barbados, Grenada, Dominica, Jamaica and Saint Lucia-that are leveraging Cat DDOs to build financial buffers and strengthen institutional capacity in the face of rising disaster risk. This initiative forms part of a broader regional effort to enhance financial resilience through the World Bank's Crisis Preparedness and Response Toolkit.
The project is financed through the International Development Association, the arm of the World Bank Group which supports low-income countries and small island economies. IDA's grants and low-interest financing helps countries invest in their futures, improve lives, and create safer, more prosperous communities around the world. Technical assistance support was provided for the policy reforms with financial support from the European Union through the EU Resilient Caribbean Program and the Canada-Caribbean Resilience Facility, both managed by the Global Facility for Disaster Reduction and Recovery.
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Website: www.worldbank.org/caribbean
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