The region’s development bank loaned nearly $139 million to its member countries in 2013, a rebound from 2012 when a weak economy limited it to lending only $85 million.
In 2011, the Caribbean Development Bank approved $167 million in loans, but that number was halved in 2012, with the bank citing concerns that weak economies in some member countries meant they wouldn’t repay their loans.
But according to the CDB’s annual report, which was issued last Thursday at the bank’s annual meeting in Georgetown, Guyana, “modest” improvements in the region’s economy put member countries and the bank on a “more solid footing.”
That meant that the bank had more room to lend out funds in order to meet its goals of reducing poverty, furthering economic growth, strengthening infrastructure, and helping in natural disaster recovery, which kept it busy in 2013.
“The end-of-year trough system and torrential rainfall which caused loss of life and significant damage to property in Dominica, St. Lucia and St. Vincent and the Grenadines were painful reminders of this region’s extreme vulnerability to natural hazard events,” the bank wrote in its annual report. “For its part, the bank has been seeking to channel its assistance into areas that facilitate an effective response to such challenges.”
Credit upgrade
The increase in the regional economy’s health was a main factor that rating agency Standard and Poor’s used in mid-May when it upgraded the outlook on the CDB’s debt from “negative” to “stable.”
“We welcome the revision in our outlook to stable and are satisfied that the measures we have taken have been successful in contributing to the improvement in outlook,” CDB President Dr. Warren Smith said. “We have strengthened our risk management structures and monitoring; further improved capital adequacy; and continued with good liquidity planning.”
To further its development goals, the bank extends low-interest loans to 19 countries and territories in the region, including the Virgin Islands.
The VI last borrowed from the bank in 2011 when government was granted a $15.67 million loan to help the territory recover from infrastructure damage caused by torrential rains in 2010. Those funds are being used to finance a series of road, drainage and other infrastructure projects, which are currently ongoing.
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