WASHINGTON, October 29, 2015- The World Bank Board of Directors approved today a US$ 15 million Development Policy Credit and Loan (DPC/DPL) with Grenada which aims to create sustainable conditions for private investment, improve public resource management, strengthen the banking sector and boost resilience against natural disasters.
As a small and middle income island economy, Grenada was hit hard by the 2008 global financial crisis. Real GDP contracted by more than 8 percent between 2009 and 2012, while fiscal deficit more than doubled as a share of GDP. Grenada’s economic recovery accelerated in 2014, driven by the strong performance of tourism and agriculture.
This financing builds on the reforms supported under the first DPC/DPL in a series of three and is aligned with the Government’s national development strategy which aims to accelerate economic growth, restore fiscal and debt sustainability, strengthening financial stability and improve social development indicators.
“Grenada’s ambitious fiscal consolidation efforts are showing positive results,” said Sophie Sirtaine, Country Director for the Caribbean. “With this financing, Grenada is expected to address critical bottlenecks to help promote inclusive growth and shared prosperity in the country”.
The main results to be achieved through this DPC/DPL series include:
- An improved investment climate by establishing a new regulatory framework for the tourism sector, strengthening linkages between agriculture and tourism, reducing cost and time for customs procedures and a new policy for Public Private Partnerships;
- A modernized public sector through strengthening public procurement systems and improving the targeting of social safety net programs for the poor and vulnerable while restoring fiscal and debt sustainability;
- Enhanced resilience against natural disasters through the establishment of the national building code, guidelines and the Physical Planning and Development Control Bill; and
- Strengthened banking sector resilience through better regulation and supervision.
This is part of a multi-donor engagement with technical and financial from the International Monetary Fund’s 36 month Extended Credit Facility, the World Bank and the Caribbean Development Bank.
This includes a credit from the International Development Association (IDA) of USD 10 million with a final maturity of 40 years and 10 years grace period, as well as a USD 5 million loan from the International Bank for Reconstruction and Development (IBRD) with a final maturity of 29.5 years, with 10 years grace period.