IDB approves US$60 million conditional credit line for Bahamas sustainable development projects

IDB approves US$60 million conditional credit line for Bahamas sustainable development projects

NASSAU, BAHAMAS — The Inter-American Development Bank (IDB) has approved a US$60 million Conditional Credit Line for investment projects that aim to foster sustainable development in the Bahamas.

The initiative seeks to jump-start micro, small, and medium-sized enterprises (MSMEs) within the country’s blue economy, which, as per IDB estimates, accounts for 21.5 percent of the nation’s GDP.

This line of credit, named the Local Sustainable Development in the Blue Economy Program, encompasses an initial individual loan amounting to US$30 million. According to IDB estimates, the blue economy presently constitutes approximately 21.5 percent of the Bahamas’ GDP, potentially rising to 50 percent when factoring in indirect impacts. This sector holds significant potential for further expansion, particularly within the Family Islands or the Out Islands, encompassing the 700 islands excluding New Providence Island and Grand Bahama Island, where the capital, Nassau, is situated.

Claudia Stevenson, an IDB specialist at the Competitiveness, Technology, and Innovation Division, said, “The Local Sustainable Development in the Blue Economy Program will empower Bahamian MSMEs operating within the blue economy. It aims to facilitate sustainable tourism, bolster research in agriculture and marine sciences, and fortify marine protected areas within the Family Islands region.”

This program aims to help around 120 small and medium enterprises (MSMEs) on the Family Islands by offering them financial support and technical guidance. The program also plans to provide 160 scholarships for science degrees and 120 scholarships for specialized training to those interested in becoming tour guides. Additionally, the program will improve public institutions, such as the Bahamas Agriculture and Marine Science Institute and the Bahamas National Trust. Furthermore, the program seeks to protect the marine environment, which will benefit the wider population, especially the approximately 25,000 people who live in the Andros and Abaco regions.

Structured around three primary components, the program’s first component will stimulate growth among MSMEs operating in the blue economy, aiding in their expansion and efficiency through the adoption of innovations and technology. It will also facilitate the growth of sustainable tourism-related enterprises.

The second component will focus on cultivating specialized human capital for the blue economy in collaboration with the Bahamas Agriculture and Marine Science Institute. This segment will also encourage the generation of scientific knowledge and its integration into industry practices.

Lastly, the third component will bolster the sustainability of the blue economy by financing the execution and enhancement of management plans for existing marine protected areas. This component also encompasses initiatives to raise community awareness, upscale coral and mangrove restoration efforts, and collect data for marine species monitoring, among other endeavors.

The Conditional Credit Line for Investment Projects and the initial individual loan have received approval from the IDB’s Board of Executive Directors. The credit line comprises two individual and sequential loans spanning a decade. The first loan of US$30 million boasts a 25-year repayment term, a 5.5-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR).