Jamaica secures US$6.7 billion recovery package

Ja­maica will re­ceive up to US$6.7 bil­lion over three years from five in­ter­na­tion­al fi­nan­cial in­sti­tu­tions to sup­port re­cov­ery and re­con­struc­tion af­ter Hur­ri­cane Melis­sa. The pack­age was con­firmed af­ter a re­quest from Prime Min­is­ter An­drew Hol­ness and will in­volve CAF – De­vel­op­ment Bank of Latin Amer­i­ca and the Caribbean, the Caribbean De­vel­op­ment Bank, the In­ter-Amer­i­can De­vel­op­ment Bank Group, the In­ter­na­tion­al Mon­e­tary Fund, and the World Bank Group.

The sup­port will com­bine emer­gency fi­nanc­ing, sov­er­eign loans, grant fund­ing and pri­vate sec­tor in­vest­ment. Prime Min­is­ter Hol­ness is ex­pect­ed to hold a call with rep­re­sen­ta­tives from the in­sti­tu­tions to dis­cuss im­ple­men­ta­tion.

Ja­maica ac­cessed US$662 mil­lion through its dis­as­ter risk fi­nanc­ing frame­work. This in­clud­ed US$37 mil­lion from the Gov­ern­ment’s Con­tin­gency Fund and Na­tion­al Nat­ur­al Dis­as­ter Re­serve Fund, US$91 mil­lion from the Caribbean Cat­a­stro­phe Risk In­sur­ance Fa­cil­i­ty, US$150 mil­lion from the World Bank Group cat­a­stro­phe bond, US$300 mil­lion from the IDB con­tin­gent cred­it fa­cil­i­ty, and US$42 mil­lion un­der the World Bank Group Cat­a­stro­phe De­ferred Draw­down Op­tion, which can ex­pand to US$84 mil­lion.

The Gov­ern­ment has es­ti­mat­ed dam­ages at US$8.8 bil­lion. Re­cov­ery plan­ning is un­der­way with CAF, CDB, IDB Group, IMF and WBG work­ing with the Gov­ern­ment of Ja­maica and oth­er part­ners.

A por­tion of the three-year pack­age will take the form of new sov­er­eign fi­nanc­ing of up to US$3.6 bil­lion. CAF has in­di­cat­ed up to US$1 bil­lion for Gov­ern­ment pri­or­i­ty ar­eas. CDB will make up to US$200 mil­lion avail­able for Gov­ern­ment pri­or­i­ty ar­eas, in­clud­ing na­tion­al and com­mu­ni­ty in­fra­struc­ture and small busi­ness sup­port. IDB will pro­vide up to US$1 bil­lion in sov­er­eign fi­nanc­ing.

IMF has re­ceived a re­quest from Ja­maica for ac­cess un­der the nat­ur­al dis­as­ter win­dow of the Rapid Fi­nanc­ing In­stru­ment, which could sup­ply up to US$415 mil­lion. World Bank Group fi­nanc­ing could to­tal up to US$1 bil­lion through bud­get sup­port, guar­an­tees and in­vest­ment projects.

Tech­ni­cal as­sis­tance and pol­i­cy ad­vi­so­ry ser­vices fund­ed by grants will ac­com­pa­ny the fi­nanc­ing. So far, US$12 mil­lion in grants has been mo­bilised from the IDB, WBG and CAF.

Pri­vate sec­tor in­vest­ment will al­so form part of the over­all pack­age. IDB In­vest, IFC and MI­GA are work­ing to mo­bilise an es­ti­mat­ed US$2.4 bil­lion in pri­vate cap­i­tal, di­vid­ed even­ly be­tween the IDB Group and WBG.

The in­sti­tu­tions state that part­ner­ship and co­or­di­nat­ed fi­nanc­ing will guide Ja­maica’s re­cov­ery and fu­ture re­silience.