The South Coast Sewage Treatment Plant is in line for major upgrades as the government secures much-needed funding through a ‘debt for climate swap’ supported by the European Union.
The deal, announced following talks between EU Commissioner for International Partnerships Jutta Urpilainen and Prime Minister Mia Mottley in Paris at the Paris Peace Forum, is in line with the Global Gateway investment agenda presented at the EU-CELAC Summit in July.
Urpilainen said: “Small Island Developing States, like Barbados, are paying the highest price for their exposure to natural hazards. Barbados is taking a crucial step towards a greener, more sustainable future, and we are proud to be part of this transformation. With the Global Gateway investment agenda, we are following up on July’s EU-CELAC Summit commitments to deliver the digital, green and fair transitions with our Caribbean partners. This initiative aligns with our priorities and shows how international partnerships can drive positive change.”
Prime Minister Mottley said new levels of partnership are needed to overcome the many challenges posed by the climate crisis.
“The support from the EU under Global Gateway underlines how such partnership can accelerate critical investments and support vulnerable populations at a crucial time in our history. This innovative financing structure, a world’s first for resilient infrastructure, can provide a new avenue to allow climate-vulnerable states to accelerate critical investment in adaptation in a manner that does not jeopardise public debt dynamics,” she underscored.
The announced partnership will allow the government to issue approximately €276 million ($295 million) equivalent of debt, structured as a Sustainability Linked Bond (SLB) or a Sustainability Linked Loan (SLL). This issuance would be backed by a €280 million ($300 million) guarantee. The European Union would provide, through the European Investment Bank (EIB) a €140 million ($150 million) guarantee while the Inter-American Development Bank (IDB) will make available another guarantee of the same amount.
Voicing his support for the initiative, President of the Inter-American Development Bank, Ilan Goldfajn said: “To make a difference in addressing climate change at the scale we need and enhance resilience, innovative financial mechanisms like this debt-for-climate swap in Barbados are critical.” (BT)
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