Prime Minister and Minister of Finance, Dr. Godwin Friday, successfully piloted the Loan Authorization Disaster Risk Management Development Policy Program Act 2026 through Parliament, securing a $20 million US loan from the OPEC Fund for International Development (OFID). The Prime Minister characterized the agreement as a vital step in enhancing the nation’s physical and community resilience against climate risks while maintaining fiscal transparency.
During the debate, Prime Minister Friday highlighted the “very generous” terms of the facility. The loan carries a low interest rate of 1.25% with a maturity period of 21 years, including a five-year grace period. Under these terms, the government will not begin repayments until May 15, 2031. Friday contrasted this with other financing options, noting that a recent Caribbean Development Bank loan carried a significantly higher interest rate of 5%.
The Prime Minister explained that the funds were originally negotiated by the previous administration to finance an acute care hospital at Arnos Vale. However, after the previous government sought alternative financing from the Export-Import Bank of Taiwan, the current administration moved to repurpose the OFID funds for budget support related to disaster risk management.
The loan was formally signed by Prime Minister Friday and the President of the OPEC Fund, Dr. Abdul Hamed al Khalifa, during a meeting at the World Bank and IMF in Washington in April 2024. While the government had initially hoped to negotiate for $30 million, the fund set the limit at $20 million to match a similar World Bank “Catastrophe Deferred Drawing Option” (CAT DDO) facility.
To access the funds, the government committed to several “prior actions” aimed at strengthening the country’s regulatory framework for disaster management. These include:
- Strengthening climate-resilient land development through new environmental impact assessment and subdivision regulations.
- Formalizing public consultations for the social and environmental impacts of development projects.
- Approving a National Comprehensive Disaster Management Policy to guide risk management frameworks.
Addressing the nation’s 113% debt-to-GDP ratio, Friday emphasized that the loan meets strict criteria for “responsible” governance. He argued that the country must utilize concessional arrangements to build a productive foundation without “blowing up the debt” to levels that worry international institutions.
“We cannot just govern by intentions. We also have to govern with good sound practice,” Friday told the House, describing fiscal rules not as conveniences but as “real guardrails”. He assured the public that the funds would be utilized effectively for their intended purposes, asserting that his administration has “nothing to hide” in its dealings with development partners.
The bill, consisting of seven clauses and the loan agreement as a substantive component, passed the committee stage without amendment.
