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The World Bank expects remittance flows to register a robust 7.3 per cent growth in 2021. (File photo)

World Bank’s US$25-M loan to boost Grenada’s COVID-19 response and recovery

The World Bank expects remittance flows to register a robust 7.3 per cent growth in 2021. (File photo)

The World Bank announced yesterday that it has designed a loan programme that will support the Grenada’s efforts to respond to the COVID-19 crisis in the short term and enhance long-term sustainability and resilience.

A view of St George’s, the capital of Grenada. (Photo: Britannica)

In a release the bank said that its board of directors approved US$25 million in quick-disbursing financing for the Grenada COVID-19 Crisis Response and Fiscal Management Development Policy Credit.

In recent years, the Government of Grenada has made significant progress on economic reforms and fiscal consolidation. The COVID-19 crisis, however, has had a disproportionate socio-economic impact on highly tourism-dependent small island economies, including Grenada,” the release quotes Tahseen Sayed, World Bank Country Director for the Caribbean. 

World Bank Country Director for the Caribbean Tahseen Sayed (File photo)

“This operation aims to help Grenada weather the current crisis, support livelihoods and enhance resilience,” she further explained.

Although the number of COVID-19 cases has been relatively low, the economic contraction has been severe: gross domestic product, according to the World Bank, will contract by 12 per cent come year-end 2020.

“This operation aims to help Grenada weather the current crisis, support livelihoods and enhance resilience,”

— Tahseen Sayed, country director — Caribbean, World Bank

To this end, the World Bank credit facility seeks to help the Government to strengthen the country’s health systems and protect livelihoods through financial assistance to the tourism sector, the agriculture sector, and small businesses. In addition, the programme will support the country’s medium-  and long-term structural reforms to improve fiscal management and debt transparency, enhance climate resilience, and strengthen public accountability.

The agriculture sector is one of several in Grenada that will benefit from the US$25-million World Bank-approved loan programme. (Photo: NOW Grenada)

“This operation builds on Grenada’s strong collaboration with the World Bank on strengthening resilience to disasters, building the Blue Economy, and further enhancing fiscal sustainability,” the institution outlined.

The financing, which is from the International Development Association (IDA), is an interest-free arrangement with a maturity of 40 years, including a grace period of 10 years.