May 28, 2021
The Bahamas will boost resilient and inclusive growth to promote business continuity and competitiveness of Micro, Small and Medium Enterprises (MSMEs) as well as their Blue Economy environmental resiliency, with a US$140m loan approved by the Inter-American Development Bank (IDB).
This is the second operation under the modality of Programmatic Policy-Based Loan (PBP). The first operation was approved in August 2020.
This program supports the mandate and vision of the Bahamas Economic Recovery Committee of providing for a resilient, dynamic, inclusive, and sustainable economy and promotes private sector-led growth under a stronger comprehensive environmental framework. As such, the government is prioritizing reforms geared at promoting competitiveness and improvement of the business climate, under a framework of environmental sustainability and resilience. This includes a medium-term strategy of further improving the business climate and supporting economic diversification aligned with the recommendations of the Economic Recovery Committee report (ERC) .
The ERC — comprised of private stakeholders and public agencies — addressed the challenges presented by the COVID-19 pandemic and provided recommendations for boosting economic recovery, including actions for improving business climate and economic diversification.
The Bahamas National Development Plan: Vision 2040, sets economic diversification as a priority goal for resilient growth, including the sustainable development of new sectors (including the Blue Economy), increased employment for young people in blue jobs and greater protection of coastal and maritime ecosystems. The Blue Economy is defined as the simultaneous promotion of economic growth, environmental sustainability, and strengthening of oceans ecosystems by maximizing the value of marine resources.
The present operation gives continuity with the ambitious set of reforms included in the first operation, proving support to their implementation, with technical support from the IDB. This operation will enhance the policy measures to improve the business climate for all private agents and for MSMEs, with a focus on post-COVID recovery; and supports further modernization of the institutional and legal framework for better environmental resiliency.
The IDB loan of US$140m has a repayment term of 20 years, a grace period of five and a half years and an interest rate based on LIBOR.