Business

Government of Barbados announced at the Summit for a New Global Financing Pact

The Government of Barbados forms a coalition of multilateral banks and organizations to develop resilient infrastructure and to drive new social and nature capital investments, building on its Resilience and Sustainability Facility at the IMF.

The Government of Barbados announced at the Summit for a New Global Financing Pact in Paris an integrated package of innovative initiatives to accelerate its transition to net zero, boost resilience, enfranchise workers, and draw in private sector investment while prudently managing public debt levels. These initiatives build on the ongoing climate policy reforms, supported by the Resilience and Sustainability Facility with the International Monetary Fund, which are expected to play a catalytic role in mobilizing private and public sector financing for climate projects.

This package of initiatives reflects unprecedented cooperation and a new “system approach” between the Government, its Resilience and Sustainability Facility (RSF) at the International Monetary Fund (IMF) and Barbados’ long-standing financing partners; Inter-American Development Bank (IDB), World Bank Group (WBG), Development Bank of Latin America and the Caribbean (CAF), European Investment Bank (EIB), and Green Climate Fund (GCF).

Barbados is highly vulnerable to the impacts of climate change, and it needs to invest heavily to protect its citizens from hurricanes, flooding and droughts, and to preserve its natural capital. It is committed to achieving sustainable public debt levels, meaning that the government has limited borrowing capacity for public investments. To meet these challenges, it has identified four complementary approaches together with its financing partners.

A New Blue Green Bank

In a first of its kind, the Government of Barbados has decided to use US$10 million from the fiscal space created by the RSF as capital for a new Blue Green Bank.

This capital will support five times that lending amount. It will pave the way for other partners, including GCF, CAF and IDB, to support the Blue Green Bank through technical support or capitalization, with GCF proposing to its Board in July to become a co-founding partner in the bank.

Once established, The Blue Green Bank will help finance over US$250 million of green investments in affordable homes, hurricane-resilient roofs, the electrification of public and private transport, and other Paris-aligned investments.

More Resilient Infrastructure Through New Low-Cost, Long-Term Loan Instruments from Development Finance Institutions

Low-cost and long-term financing instruments from the EIB, CAF, IDB, GCF and RSF will support Government investment in resilient water and waste treatment infrastructure, flood and coastal protection and support its efforts to transform state owned enterprises and enfranchise workers.

The EIB has made available US$18 million of grants from the European Union (EU) to support climate-resilient water, sanitation, and clean ocean projects across the Caribbean to back a US$165 million loan facility.

The GCF will offer up to US$1.5 million in grants per project for end-to-end project preparations, innovation, and transformational impact, and to prepare investment proposals for further GCF funding.

Better and More Affordable PPPs

Barbados’ multilateral financing partners will strengthen project preparation support to attract private investment in Private Public Partnerships (PPP) to build more resilient infrastructure. The IDB will support and help develop the Government’s capacity and expertise in PPPs.

The World Bank Group’s Multilateral Investment Guarantee Agency has made available investment guarantees to help reduce the cost of private sector financing.

The World Bank Group’s International Finance Corporation will support Barbados in developing the first large-scale onshore wind project in the country and enhance the resilience of the grid.

Developing New Non-Debt Investments in Nature and Social Capital

The Government of Barbados is working with its development partners to build on the success of the 2022 Blue Bond with IDB and The Nature Conservancy, which released approximately US$50 million of new financial resources for marine conservation. Particular focus is on a new generation of instruments to support investments in nature and social capital.

Together, these initiatives will help Barbados meet its resilience objectives and protect its citizens, whilst helping transform the economy and protect its pristine natural environment.

Quotes

Prime Minister Mia Mottley of Barbados commented, “Alongside new capital, innovative instruments, partnerships and new ways of working together are critical if we are to overcome the challenges posed by climate, pandemics and debt. These new, integrated, initiatives announced today are embodiment of what can come out of new cooperative ways of working together.”
Kristalina Georgieva, Managing Director of the International Monetary Fund, said, “We welcome Barbados’ initiatives to catalyze private climate finance, and the related push to bring together multiple partners in pursuit of a common goal. The Fund is fully committed to supporting our members’ efforts to meet their climate goals—including through the Resilience and Sustainability Facility – and we look forward to our continued partnership with Barbados as the government takes steps to green the economy.”
Ilan Goldfajn, President, Inter-American Development Bank Group, said, “The IDB has long been one of Barbados’ closest and most committed development partners. We are delighted to take advantage of this opportunity to collaborate with the IMF and other partners to build on our successful recent blue bond issuance, and promising experiences across the region with project preparation and structuring to help catalyze new and larger volumes of private financing for resilient climate smart investment. These and other innovative financing and support mechanisms will be crucial to help Barbados meet the challenges of a rapidly changing climate.”
Sergio Díaz-Granados, Executive President of CAF asserted that as a home-grown development bank owned by the countries Latin America and the Caribbean, CAF understands the myriad challenges faced by small islands, like Barbados, as a result of the effects of climate change. “CAF is committed to doing its part in channelling increased resources and is very pleased to join forces with other development partners to mobilize dedicated financing that will help to strengthen the resilience of our member countries.”
Werner Hoyer, President of the European Investment Bank, commented that, “We have no time to lose to support countries like Barbados that are already facing the devastating consequences of climate change. Following Prime Minister Mia Amor Mottley’s call to action, we are delivering swift and targeted support. We will start offering extended loan tenors to lower and middle-income countries, and are seeking to provide natural disaster risk clauses in our loans to ensure the most vulnerable communities can recover and rebuild following a crisis. As the EU Climate Bank, alongside our Team Europe partners, the EIB is constantly working to increase the impact of its climate lending and support for vulnerable countries like Barbados.”
Henry Gonzalez, Executive Director ad interim of the Green Climate Fund stated, “The Blue Green Bank will transform the financing landscape in Barbados and catalyse new finance for sustainable climate investments. GCF has provided technical and financial support in developing the concept, and our Board will consider making a substantial investment in the new Bank at its meeting next month.” (PR/GIS)
Makhtar Diop, IFC Managing Director, said, “Barbados is redoubling efforts to bolster its climate resilience and become a low-carbon leader. IFC will continue to work closely with the country and collaborate with other multilateral institutions to accelerate the flow of private capital in support of Barbados’ ambitions.”

Business

2024 Summer Internship Program at BNOCL Group of Companies

The Barbados National Oil Company Ltd and Barbados National Terminal Company has closed the curtain on the 2024 internship program.

The program, which ran from May until August, offered opportunities for talented and motivated students to gain hands-on experience in a dynamic work environment.

The internship program is designed to provide students with valuable exposure to various departments and projects within the BNOCL & BNTCL Group of companies. Interns had the opportunity to work alongside experienced professionals, learn new skills, and contribute to the company’s success.

This program made sure to promote a healthy experience for our interns as they grasped concepts of the world of work; “There was never a day where something new wasn’t learnt” said Makayrea, who was attached to the Communication Section. While return IT Intern Deavione stated “My experience has given me insight to the hands-on aspect of technology that UWI teaches me about in theory and also an understanding of how workplace environments are structured”.

The BNOCL Group is dedicated to creating a supportive and inclusive work environment, especially for those persons new to the world of work. (PR)

Business

Central Bank of Barbados Stands by its Economic Reviews

In response to a letter published in the Saturday Sun on August 17 questioning the Central Bank of Barbados’ economic report and analysis, the Bank reiterates its unwavering commitment to accuracy, transparency, and public trust – values that have been at the core of our institution throughout its 50- plus-year history. The Bank recognises the critical role that accurate, transparent, and objective economic reporting plays in maintaining public confidence, and takes considerable care to ensure that the information we publish is both reliable and reflective of current economic realities.

The economic data, including statistics on economic growth, nominal GDP, inflation, and unemployment, are produced following best practices. While the Barbados Statistical Service (BSS) is responsible for producing much of this data, we rigorously interrogate their submissions to ensure thoroughness and reliability. Our reports are grounded in robust statistical frameworks, supported by rigorous analysis, and are frequently reviewed by international partners such as the International Monetary Fund (IMF) to ensure accuracy.

The 2023 GDP estimates, produced by the BSS and reported by the Central Bank, have been reviewed and validated by an IMF technical assistance mission. This external review provides additional assurance of the validity of our data, which we stand by confidently.

Specific concerns were raised about our estimates of tourism earnings and their contribution to GDP. To clarify, the estimated performance of tourism earnings in the first half of 2024 is comparable to that of the first half of 2007, a period when Barbados also hosted a major international cricket event. In both instances, we observed a significant increase in the ratio of tourism earnings to gross domestic product – rising from 15.9 percent in 2023 to 20.9 percent in 2024. This is consistent with the increase observed from 22.7 percent to 27.5 percent between 2006 and 2007.

Tourism estimates for the first half of 2024 are supported by several key indicators:

Long-stay arrivals increased by 17.9 percent over the first half of 2023 (source: Barbados Statistical Service).
Hotel room rates rose by an average of 10 percent, with the second quarter showing a particularly strong increase of 13.3 percent over the second quarter of 2023 (source: Smith Travel Report).
Cruise arrivals recorded a 17.9 percent increase, with cruise calls rebounding significantly in the second quarter of 2024 (source: Barbados Statistical Service).
Food prices experienced a general increase of 5.3 percent, indicating that visitors paid more for food, contributing to higher tourism spending.
These data points collectively underpin our estimate of a 4.5 percent economic growth rate for the first half of 2024. We remain confident in our assessment, which reflects a strong recovery in the tourism sector post-COVID, driving economic expansion across other sectors.
We acknowledge the concerns raised by some Barbadians regarding the perceived disconnect between the economic reports and the actual conditions they experience. It is important to understand that while the economy may be growing, it can take time for the benefits of this growth to be felt by every member of society – a phenomenon observed globally, including in advanced economies like the United States. This is why we have consistently emphasised in our economic reviews the need for increased investments to achieve sustainable and inclusive economic growth that will improve the lives and livelihoods of all Barbadians.
We welcome public discourse on our economic reviews and are committed to engaging with stakeholders to address any genuine concerns. If discrepancies exist between our reported data and independent analyses, we invite dialogue to assess and verify these numbers. Our primary objective is to provide the most accurate and comprehensive picture of Barbados’ economic performance, even as we acknowledge the inherent challenges in producing projections in a dynamic and uncertain global environment.
We assure all Barbadians that there is no intent to manipulate or distort economic data. We will continue to refine our models and methodologies, ensuring that the Central Bank remains a trusted source of clear and accurate economic information.
Once again, we thank you for your concerns and look forward to opportunities to strengthen our processes and our relationship with the public. (PR)

Business

Work Progressing On Unlocking The Grid

Barbados has made significant headway in its quest to have its first procurement project for battery energy storage systems.

Minister of Energy and Business, Senator Lisa Cummins, said tremendous work had been undertaken to get the team to this point. During a recent press conference, at the end of her Ministry’s three-day Procurement Design Workshop with key partners, she stated that the entire pipeline had been contemplated for the introduction of battery energy storage systems.

Senator Cummins stated: “Based on the work that they (consortium of experts in storage systems) have already done, we can now identify where across the country we need to deploy battery energy storage systems in order to relieve congestion….

“The work is under way, and we’re closer now than we’ve ever been before to getting the first battery energy storage system.”

She explained that by deploying battery energy storage systems in the country, it would allow Government to treat to the broad issues on the grid, to create that stability and unlock, in this very first tranche of procurement, the first batch of persons whose licenses are awaiting connections to the grid.

Senator Cummins continued: “This is only the first batch of procurement. The expectation is that we will have subsequent procurement rounds, and we want to invite Barbadians to participate.”

Co-founder and Chief Operations Officer of RELP, Mauro Soares, explained that the technical work was ongoing. He said they had been collecting information and building a model for grid characterisation which would allow the team to set the strategy going forward and to maximise the value of battery energy storage systems to the grid.

Mr. Soares continued: “So, hopefully in a few weeks, … the Ministry will be publishing some documentation that will have lots of details on what will be procured; where; what technologies will be available; questions for the market to address; [and there will be] the possibility of commenting on those documents.

“And that will give lots of information for investors, local developers to work around their projects and do their homework, to be ready to go for competitive bid submission. Hopefully, before the end of the year, we’ll have final documents and early next year we might have bid submission happen. And soon after that, all the projects will be financed and constructed so that we can solve this issue as soon as possible.” The three-day Procurement Design Workshop allowed the Ministry of Energy and Business and key partners to discuss and make critical decisions with regard to procuring battery energy storage systems. The cohorts included RELP, Global Energy Alliance for People and Planet, the Inter-American Development Bank, Deloitte, the National Renewable Energy Laboratory, and the International Finance Corporation. (PR/GIS)