SVG receives US$40 million financing from the World Bank to support volcano recovery
The Board of Executive Directors of the World Bank on November 30 approved US$40 million for the Volcanic Eruption Emergency Project in St Vincent and the Grenadines(SVG), states a release from the bank. The project is also financed by a US$2 million grant from the European Union’s Caribbean Regional Resilience Building Facility, managed by the World Bank’s Global Facility for Disaster Reduction and Recovery.
The bank noted that the April eruption of La Soufrière damaged critical services, infrastructure, and agriculture, affecting the entire population of the island of St Vincent. The eruption also resulted in significant population displacement—approximately 22,400 people were evacuated from areas close to the volcano, many remaining in shelters for months. The natural disaster compounded the effects of COVID-19, creating financing needs estimated at US$175 million, 23 percent of the country’s gross domestic product in 2021.
“The people of St Vincent and the Grenadines have endured the twin shocks of the volcanic eruption and COVID-19. The project will help the country build back better while taking into account its vulnerability to natural disasters and the growing threat of climate change,” said Lilia Burunciuc, World Bank Country Director for Caribbean Countries. “This project will support the government’s efforts to restore infrastructure, stimulate economic activity, and assist the most vulnerable in the population, particularly women. We hope that this project will be a catalyst for growth and strengthen the country’s resilience.”
The Volcanic Eruption Emergency Project will support the rapid restoration of critical infrastructure damaged by the volcanic eruptions.
It will also improve the government’s capacity to respond to future emergencies, provide temporary grants to 4,000 displaced households, and be used to implement a cash-for-work program to support the labour-intensive work of ash and debris cleaning.
In April 2021, the World Bank provided US$20 million to St Vincent and the Grenadines to address immediate needs, and the Bank allocated a further US$50 million for budget support in June 2021. The Volcanic Eruption Emergency Project financing, which is from the International Development Association (IDA), is interest-free with a maturity of 40 years, including a grace period of 10 years.