WASHINGTON, United States (CMC) — Three Caribbean Community (Caricom) countries are to benefit from assistance from the World Bank for disaster risk management projects.

The Washington-based financial institution said that the US$70 million Disaster Risk Management Development Policy Financing project will assist St Lucia, Barbados and St Vincent and the Grenadines.

According to the World Bank, the US$20 million project for St Lucia will help the country quickly access financial resources in case of an emergency, so it can respond faster and support its people.

“The high costs of recovery and reconstruction following a natural disaster strains public finances, contributes to increased debt and limits countries’ ability to invest in development and higher living standards,” said Lilia Burunciuc, World Bank division director for the Caribbean.

“This project helps St Lucia address these challenges by advancing key reforms and providing rapid access to financing in the event of a disaster. It also reduces the need for costly emergency borrowing and enables faster, more fiscally responsible recovery, benefiting all St Lucians,” she added.

The project will enhance St Lucia’s capacity to prepare for and respond to natural hazards and health-related crises. 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 milestone comes as St Lucia continues to confront growing risks. Located in the hurricane belt, the island is increasingly vulnerable to extreme weather events, including hurricanes, floods, landslides, and droughts—many of which are intensifying,” the World Bank said.

It noted the estimated annual losses from hurricanes alone amount to nearly US$9.5 million in damage to the island’s building stock, representing approximately 0.4 per cent of its 2023 gross domestic product (GDP).

“With nearly half of the population in St Lucia living within five kilometres of the coastline, the risk to people and property is rising. These hazards not only strain government finances but also jeopardise key economic sectors such as tourism and agriculture, while disproportionately affecting the most vulnerable.”

The World Bank said that in response to these escalating risks, the Cat DDO offers St Lucia immediate liquidity in times of disaster. It said to access this contingent line of credit, St Lucia has completed a targeted set of policy reforms structured around two main pillars — strengthening physical and data infrastructure for climate and disaster risk management, and improving the country’s financial readiness to respond to future shocks.

As part of the first pillar, the government took steps to update and implement physical planning regulations that promote safer land development and will ensure that new infrastructure and urban expansion are guided by risk-informed standards.

The second pillar focuses on increasing St Lucia’s fiscal resilience.

The government has adopted Public Asset Management regulations for public inventory to evaluate and monitor the condition and vulnerability of public infrastructure. At the same time, a new Disaster Risk Financing Strategy was adopted, outlining financial instruments and policies that can be used to better manage the economic fallout of disasters.

The World Bank said that these reforms will complement national efforts already underway to strengthen resilience through better planning, regulation and financial preparedness.

St Lucia joins other Caribbean nations that are using Cat DDOs to build financial buffers and institutional capacity to handle increasing disaster risk, including St Vincent and the Grenadines, Grenada, Jamaica, Dominica, and Barbados.

In the case of Barbados, the US$30 million Disaster Risk Management Development Policy Loan will help Barbados build stronger systems to manage natural disasters and health emergencies.

The World Bank said that this project arrives at a critical time for Barbados, noting that despite its strong economic recovery, the country remains highly vulnerable to natural hazards.

In 2024, Hurricane Beryl passed within 150 kilometres of the island, causing damage estimated at 1.4 per cent 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.

“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 Burunciuc.

The initiative complements the recently approved Barbados Beryl Emergency Response and Recovery Project, which 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.

The World Bank’s assistance to St Vincent and the Grenadines amounts to US$20 million supporting comprehensive policy reforms to enhance national preparedness and resilience. It includes the Cat DDO and 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.

The bank said that 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 landfall on July 1, 2024, causing estimated economic damage of US$230.6 million, 22 per cent of its 2023 GDP.”

“This programme reflects St Vincent and the Grenadines’ strong commitment to proactive disaster risk management and resilience building,” said Burunciuc.

“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,” she added.

The projects are financed by the International Development Association (IDA), the arm of the World Bank Group which supports low-income countries and small island economies. IDA’s grants and low-interest financing help countries invest in their futures, improve lives and create safer, more prosperous communities around the world.

Technical assistance was provided for the policy reforms with financial support from the European Union (EU) through the EU Resilient Caribbean Programme and the Canada-Caribbean Resilience Facility, both managed by the Global Facility for Disaster Reduction and Recovery and the Caribbean Strengthening Fiscal Risk Management Trust Fund.

Contributing countries include the United Kingdom, Germany, France, Japan, Canada, Netherlands, European Commission, Norway, Australia and the United States.