The Caribbean Development Bank has approved a US$5.6 million loan to assist the Government of Anguilla, a British territory, in meeting its fiscal obligations after the destruction caused by Hurricane Irma in 2017.
The funds will allow the Government to focus on its recovery priorities, without having to divert resources to meet financing needs.
“Hurricane Irma resulted in a major economic setback for the island of Anguilla. The Government is now facing a financing gap, having had to meet increased spending needs, while at the same time facing a loss of revenue from a missed tourism season. This loan will provide a needed liquidity buffer for post-Irma rehabilitation during 2018, allowing focus to be placed on the critical social and economic needs of the country,” said Dr Justin Ram, Director of Economics at CDB.
The loan is repayable over a period of 13 years, inclusive of a grace period of three years. Hurricane Irma caused approximately US$507 million in damage on Anguilla, including to much of the island’s physical infrastructure, air and sea ports. In addition, the tourism industry—the main driver of growth in the country—suffered significant losses. These factors are expected to have a major negative impact on Anguilla’s revenues during 2018.
Irma’s impact further deepened socioeconomic challenges in Anguilla as the Government worked toward recovery from a near decade-long fallout of the financial crisis, which threatened the island’s economic security due to contractions in the two main economic sectors—tourism and financial services.
In December 2017, CDB approved a loan of US$5 million to assist in the restoration of electricity on Anguilla, and in the immediate aftermath of Hurricane Irma, the Bank provided an Emergency Relief Grant of US$200,000 to the Government.
Since 2000, CDB has provided US$4.3 million in support for three disaster management projects in Anguilla.
This is contrast to a $100 million grant promised by Britain to it’s sovrerign territory, but so far withheld, for lack of balanced budget to suit to UK Foreign Office.