Government and the Inter-American Development Bank (IDB) have signed two loan agreements which will allow for the modernization of the public service and increasing investment in renewable energy capacity and efficiency.
Prime Minister Mia Amor Mottley and President of the IDB, Luis Alberto Moreno, signed the agreements on Thursday evening, at the Hilton Barbados Resort, shortly before the official opening of the IX Annual Consultation of Caribbean Governors meeting.
The US $40 million loan will contribute to the digital transformation of public administration and improve the quality of public and private services.
The Sustainable Energy Investment Program (Smart Fund II) is a US $30 million loan, which will allow the country to reduce its dependence on imported fossil fuels by increasing the investment in renewable energy capacity and efficiency.
Ms. Mottley stressed the importance of the two loans, saying they were not about adding debt to the country, but triggering growth. “The modernization of the public service is an absolute essential action …. We need to be able to modernize our public service and access to all of the services ….
“This US $40 million loan for the modernization of the public service will require policy changes, but it also leverages technology and the digital economy in a major way. We believe that the ability to save time and money in accessing services will reduce the cost of operations for businesses and the costs for individual citizens, and hence it will increase the disposable income of individual citizens and increase potentially the profitability of our country,” she explained.
With respect to the second loan, she underscored its importance, reminding those present, including some Cabinet colleagues, that Government had set a bold target to be fossil fuel free by a specific period.
She said it was important for Government to find opportunities to assist Barbadians in participating in the ownership of some of these renewable energy projects, even if it was through innovative financial instruments.
“We are fortunate that there are a few entities that are already speaking to us that are looking at … unit trust type arrangements that will allow for a multiplicity of persons to participate on a diversified ownership structure, and we believe that is important,” she stated.
The Prime Minister reiterated that the two loans were of tremendous importance to Barbados and its people.
President Moreno lauded Ms. Mottley and her team for the work they have done so far in turning around the economy. He explained that the purpose of the two loans was to provide more growth to the economy of Barbados.
He said the IDB’s support for the country had increased significantly. “We have done so out of the conviction that you are on the right path,” he stated. He pointed out that during the first year, Barbados’ debt to GDP ratio had already fallen significantly.